As the old song lyrics go, “Make new friends, but keep the old. One is silver, and the other gold.”
These same lyrics apply in business. Looking for new customers is important, though, finding golden nuggets to increase your revenue stream with existing customers may be easier at times. I call the process, “Mine Your Business.”
“Mine Your Business” is a simple sales strategy great for driving both margin and growth for new or upsell products. Balancing strengthening relationships with existing customers and gaining new customers is the key to success.
How can distributors leverage the “Mine Your Business” strategy?
When selling a new or upsell product, three questions always come to mind:
- What is the new or upsell product replacing?
- What are the key selling points?
- Why would my customer want to buy the new product?
Identifying customers who are already using the basic product you want to replace is an important sales strategy. Most distributors have great end user reporting capabilities down to the SKU level. With that information in hand, you are ready to make a plan to convert a percent of those customers to a new or upsell product. As an example, if you have a new LED PAR lamp you want to sell, run a report to see which existing customers purchased the basic Halogen PAR lamp. Customers that have purchased the most Halogen PAR lamps in the past would be your top targets to pursue.
A perfect time to execute this sales strategy is in preparation for an AD Field Marketing Summit (FMS). Sales training and joint sales calls can be scheduled with suppliers who have the best opportunities with new or upsell products for your targeted accounts.
You may find taking advantage of sales opportunities where end users are already buying from your business is easier. This is because they already know and trust you and your company. Find a balance to “Mine” for better margins and increased top line sales with existing customers, while at the same time continuing to target new customers.
How can suppliers leverage the “Mine Your Business” strategy?
Forward looking suppliers can take this approach with their distributor partners. Distributors that are buying basic products should work together to analyze sales reports to identify end users to upgrade, as well as sales training development needs. Identify your distributors’ top 10 or 20 customers and understand if they are selling your product line. Depending on the market segment served by your distributors, you may be able to uncover some golden nuggets of opportunity.
Both distributors and suppliers may find utilizing sales analysis reports in conjunction with the “Mine Your Business” strategy will guide businesses towards establishing growth trends. This may also help teams understand the critical metrics that will increase profitability. Success comes from understanding the many details of your business!
Bob Jordan is the VP of Business Development at AD. Prior to joining AD, Bob had a 30 plus year career with two AD supplier partners, Philips Lighting and Sylvania. His positions ranged from sales and operations to marketing and business development.