Every sales organization wants to increase their revenue and profit, but they normally only choose one method to achieve that goal. That method is new clients.
Everybody loves new clients. But how do you feel about your old clients? The answer to this question is a clue as to how much new revenue you need from new clients and how much should come from your existing clients.
What About the Clients You Have Now?
Much of the time, the pressure to win new clients and grow revenue is caused by another problem: low wallet share.
It’s easier to choose a new revenue number goal, to break it up into individual quotas for the sales team, and in doing so, ignore the fact that much of that revenue goal could be made simply by growing the clients you already have.
It should be easier to grow revenue with your existing clients because you already have the contacts, because you already have a contract, and because you are already working with them.
The reason it isn’t always easy to grow wallet share is because you don’t deserve the rest of the business. If you aren’t delivering, or if you aren’t creating a high enough level of value, you aren’t going to get your dream client’s additional spend because you don’t deserve it.
The tough question for a salesperson or sales organization brave enough to ask it of themselves is this: “Are we really going to win another account only to perform like we are for the accounts we have already won? Is this the best growth strategy?”
What About Creating Enough Value to Command a Higher Price?
You can grow sales by adding new clients. You can also grow sales by selling more to your existing clients. There is one other way to grow your revenue, but most salespeople and sales organizations won’t consider it. That method is raising your prices.
Go ahead and take a minute to recover from the shock of being asked to think about raising your prices. I’ll wait.
The reason you don’t believe that you can raise your price is the same reason you don’t have a greater share of your client’s wallet: you aren’t creating enough value. The more value you create—and the higher that level of value—the more easily your clients will accept an increase in your prices. And there’s a bonus here. The more value you create for one client, the easier it is for you to apply that value creation to other clients—even new clients.
The right question to ask is this: “What could we do that would create so much value that our clients would be willing to pay us more?”
The value creation comes before your client gives you greater wallet share, and it comes before you can earn the right to command higher prices. If value creation isn’t part of your revenue growth strategy, why would you expect your next set of new clients to look any different the clients you have now?
Why do you need new clients now, really?
What increase in revenue should you expect from your existing clients as a result of wallet share increases?
What methods do you use to grow revenue?
How many of your existing clients would stay with you if you raised your prices? Of the ones that would leave you, what would be the real reason for your loss?
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Filed under: Sales 3.0