Are you struggling to retain clients and cross-sell effectively? In the world of business, new clients and existing clients are very different, and acquiring a new client requires a different approach than retaining an existing one. While new clients buy into the promise of value, existing clients are educated buyers who expect actual value. This week, we are exploring the importance of creating value for your clients, not just promising it, and how this strategy can help you retain clients and cross-sell effectively. We'll also address the common misconception that price is the primary reason for lost deals and provide insights into what really matters to clients. Keep reading to learn more!
Educated Buyers
To state the obvious, new clients are very different from existing clients, and “acquiring” a new client is very different from “retaining” an existing one.
A new client does not have experience with you
A new client is not buying actual value, they are buying into the “promise of value”, they are buying “potential value”
A new client has listened, they have researched, they have checked references, and they have weighed the pros and cons. The only thing they have not done is actually experience working with you.
In short, to acquire a new client you have to “sell” them. All of us have been new clients at one time or another, and we have all been “sold.” We have bought into what we hoped would be a long-term relationship, and often we actually do receive what we thought we bought. When we do not receive the value expected we are a more knowledgeable buyer and we go looking for a new provider; sometimes it takes an expensive mistake to learn about a provider.
But to retain, and ultimately cross-sell, an existing client, one who has experience with you and you actually have to create value. You cannot just promise value— they are now an educated buyer.
The same is true for your competitors. In markets where everyone has a supplier, everyone is an educated buyer. So either you have to wait for someone to lose a client or you must take a client from them. Either way, in most markets, for you to gain a new client someone must lose a client. Likewise, for your competitor to gain a client, you must lose one! Hence the importance of your 1:1 retention strategies.
Either they are receiving value from their current provider, or they are not. And for you to gain a new client, you have to find the buyer who is not receiving value, or you must offer greater value.
Is Price the Primary Reason for Lost Deals?
During the aftermath of a deal that falls through, sales teams typically try to decipher what went wrong. Why did they lose that deal? They usually end up copping out and declaring that they lost the deal on price. But the price is never the problem. However, price relative to what the client can get can be the problem. Is $35,000 too much to pay for a new car? How about $92,000? It depends on whether one is in the market for a Hyundai or a Mercedes, and it depends upon consumer perceptions of value.
Ultimately, you need to create value for your clients, not just promise it. This should be your main strategy for retention and cross-selling.
What do you find challenging about cross-selling? Comment down below. After that, follow us on Linkedin at “Encompass-CX” for more blog posts!