What was the last time you took the time to review your offerings in order to be sure you’ve charged the right price and paid a fair amount? Do you frequently check your clients and draw an assessment of what they pay and what they get? Much like most things, customers are only willing to pay for what they believe they are getting worth. So, it’s your responsibility to ensure that you’re delivering cost or value to your customers. But, how do you do this? What is the best way to determine how you price the value you provide? Although it may seem unrelated, making sure that you’ve paid for your goods or services in accordance with the value you provide is crucial and directly related to the retention of customers.
Be aware of the Margins.
Are you confident that if only you were able to have the time to sit down and get a knowledge of the margins that each of your clients generated for you and your business that you could achieve this? If not, do you need to take a seat and perform an under-the-hood calculation to determine the margins your customers provide to you? Next, you should ask yourself, “Is what you offer to them at the same time worth the price you’re charging? In most cases, you find that the cost is lower than what you believe you deserve or is in close proximity to what you are entitled to. After this is done, you can rank your customers from the highest value generator to the lowest value generator.
Slice and Dice
Once you know the gross margins of every one of your customers, examine your customers and identify customers that generate only a tiny amount of profit or none at all. Although it may be difficult, you might have to consider cutting out specific customers. Also, you might have to “fire” particular customers if they are not able to generate an acceptable amount of revenue for you. It is recommended that you consider creating a plan for dispersing your customers. This is crucial and essential since you must be able to devote all the time needed to the most profitable customers. You will probably find that you’re doing more than you should on the ones that aren’t as profitable.
Develop the Base
After you’ve figured out the most profitable and least profitable customers, review your top 20 customers that they have. Then, ask the difficult question, “Are you truly gaining everything you can with the clients you already have”? If not, take a look at your offerings in terms of products and consider your possibilities to cross-sell to your customers (especially your most loyal customers). This could be an excellent chance to go deep and make an effort needed to expand your customers and your revenue.
Retention of customers is crucial! But, as you can see in the above article, it’s sometimes essential and even more vital to decrease your customer base in order to boost your earnings rather than expand the number of customers you have. By following these three simple steps, you’ll have more trust with your top customers; you will increase your market share and mindshare for your clients and increase your profits.
Established in 2008 with the help of Matt Cotner, Retain More Customers, Inc. was founded in 2008 by Matt Cotner. It is the market leader in customer Retention Management Solutions for Small and medium-sized companies across a range of industries such as manufacturing businesses, financial services, business services, retail and. The company offers a diverse variety of products and services designed to help entrepreneurs, business owners, as well as sales managers and sales professionals to keep more of their current customers by delivering more value through the implementation of the simple-to-implement and unique five-stage customer retention Management System.