As the economy slowly emerges from the recession, many businesses realize that cost-cutting is not enough to improve profits. In the end, the top line (revenue) has to grow.
The obvious place to look for additional business is your current customers. Numerous studies have shown that keeping an existing customer costs less than finding and landing a new customer. The process to capture a new customer is much more involved than selling to an existing account.
Most successful businesses enjoy a high percentage of repeat business. This is true for business-to-business (B2B) and business-to-consumer (B2C) environments. Many B2B transactions are not just the same customers but for the same products. Industrial commodities are a common example.
Repeat customers are vital for B2C who also need a steady base of revenue. Think of all the coupons you receive from your favorite retailers.
Developing repeat business is about creating a competitive, dependable and risk-free experience with each transaction. PDQ - Price, Delivery, Quality - still drives most B2B transactions. The B2C retail sales experience frequently includes added or unique products (think clothes or food), easy return policies, and a warm, hassle-free shopping experience.
How do you know what to offer? Why not ask your customers, especially the ones that you want to return?
Most customers are not bashful about sharing their views on how to run your business. Fix the problems and reinforce the positives. And don't be afraid to experiment and reconfigure. Your market doesn't remain static, and neither should you.
Correction: Last week's column erroneously stated that "most small businesses are incorporated as subchapter 'S' entities so the owner cannot draw a salary."
In fact, owners of an "S" corporation must draw a salary. The sentence should have read, "most small businesses are incorporated as an LLC or PLLC and the owner cannot draw a salary. All profits are assumed to flow to the owner."