Your Next Sale is Just Under Your Nose - How to Maximize Your Customer's Lifetime Value

If I told you that 80% of your sales likely come from 20% of your customers, would you believe it? The truth is that this is probably the case for the majority of businesses and salespeople. It means that it is highly likely that your next sale will come from someone who has previously done business with you.

Back in 1906, Vilfredo Pareto, an Italian economist, found out that 80% of Italy's wealth was owned by only 20% of its people. And one day, while examining his garden, he noticed that 20% of his pea pods accounted for 80% of his pea crop harvest that year. This got him thinking about the relationship between these two percentages, and soon after, the "Pareto Principle," also known as the 80/20 rule, was established. This principle can also be applied towards business and provides many insights on how businesses should be run. Instead of putting all your energy into seeking new business, it would be wiser to spend a fair amount of your time following up and servicing customers who have already given you business. After all, you've already successfully built a relationship with that customer and gained their trust, which is usually the hardest hurdle to overcome. Upselling to existing customers should come naturally so long as you are proactive in your follow-ups and offer them top-notch customer service.

Let's assume that around one-fifth of your existing customers are waiting for you to offer them something that would meet their needs. Hence, if you are not following up with them, you're actually passing up 80% of potential businesses that are considered lower-hanging fruits. Obviously, if you had provided a poor customer experience from the start, your chances of closure may not be high. However, if you've always carried out your sales activities or business with integrity, your customers would naturally want to buy from you again if the product or service is what they want.

I am certain that you have invested heavily to close the first deal with all your customers, such as planning, marketing, relationship building, and follow-up. Now, it's the time to develop their "lifetime value." There are many things you can do to show appreciation to your customers and make sure that they remember you. I have provided some examples below.

1. Sending a card or gift to your customers during special occasions, such as birthdays or Christmas.

2. If your customer holds an event or gathering and you're on the invite list, make sure that you find time to attend and show your support unless you really have other urgent matters to attend to at that time. Even so, ensure that you communicate to your customer the reason why you can't make it, and try to arrange another time to catch up with them.

3. If your business involves yearly renewals, don't just let the service auto-renew without saying or doing anything. Take the opportunity to touch base with your customer to update them on the renewal and express your appreciation for their support.

4. Put your money where your mouth is and show your customers that you value them. This can be done by taking them out for a nice meal or giving them a gift or discount on their purchase. Instead of treating such gestures as an expense, treat them as an investment that will potentially help you generate future revenues.

5. Always touch base with your customers. Many salespeople make the mistake of selling a product and service to a customer and then disappearing from the radar until they want to make the next sale. Don't be one of them. Instead, reach out to your customers often to inquire about how they are, and more importantly, how the product or service that they bought from you is performing, and find out if they have any other needs. You can also distribute regular newsletters to your customer base via e-mail to keep you on the top of their mind.

6. Providing your customers with exemplary customer service is the best way to ensure that they will remain loyal. Not only that, if you go above and beyond and they are satisfied with your service, they will become your advocate, and you'll start getting referrals from them.

7. Last but not least, always operate with integrity and offer your customers products/services that are suitable for them and would meet their needs. Never sell anything to your customers just for the sake of making more money. At the end of the day, if your customer likes you and the product or service they bought, there's no doubt that they will buy from you again.

Remember, the number one rule for succeeding in sales is to always strive to meet the needs of your existing and prospective customers. By doing that, your chances of getting repeated business will improve significantly, and the possibilities are endless!