When it comes to sales you always hear that it is less expensive to sell to your existing clients than to obtain new ones. As easy as that sounds, you need insight into your clients’ behaviors to uncover opportunities for repeat business.
Your accounting data is a great source of customer information. Look deeper into the data, past the financial statements, to see how the numbers reveal unique and valuable sales information.
Don’t Save the Best for Last
Your best customers are the ones who should be treated like VIPs. To get a good handle on your “top” customers use your accounting data to run a report on all your customers and sort by the amount they spent with your company in 2016, and another report for 2017. Compare the two reports. How many of your customers changed position? Do you have a few new names on the top?
Your best customers should be the ones you know the best. Consider what you can do for them to keep them on the top, or to bring back customers who may have slipped off the list.
Find the Patterns in Your Accounting Data
Buying cycles and spending trends become very clear when you run reports on a weekly, or monthly basis, and compare them over time. Retail stores report their revenue and profits compared to last month, or the same time last year. This is a great practice to adopt regardless of your industry.
Sales reports uncover trends and cycles, but only if you are looking for them. Even if your company’s sales are stable, take a look at the details – which customer, what product or service, and when are they buying? Leverage your accounting data by categorizing your customers, the easiest category is “industry.” Filter and/or sort your reports so that you create industry-specific snapshots of your market. By understanding the granular data that makes up your sales figures you can target your marketing appropriately. Market to your customers when they typically buy and you should sell more.
Timing Is Everything
In addition to identifying your top customers and their industry cycles and trends, take a look at the last time your top customers made a purchase. Just because they once produced a high amount of revenue does not mean they have spent any money with you lately. A report that includes the date of their last payment can be very eye-opening.
Look for customers who are “bucking the trends” by NOT buying when you expect them to. This should be a red flag that you need to reach out to them. Re-build that customer relationship and start the call with specifics, “We haven’t heard from you in four months…” You get the picture.
Some Offers Can Be Refused
Review your company’s products or services; are they still viable in today’s market? Run a report of your items with sales figures in reverse order so you can focus on your worst selling products or services.
This is important information, it’s the flip-side of your customers’ buying cycles and trends. If you are not identifying how your customers are changing then there’s a good chance you are not modifying your production, sales projections, or marketing either.
Changes need to be identified early and often to allow you to capitalize on them. When your customers stop needing what you are selling, then you have to be able to sell them something else. Be ready to strategize to stay in the black.
The Most Bang for Your Accounting Data Buck
Are your best selling products and services also your most profitable? Just because the revenues are high does not mean the profit is too. Be sure you are also tracking the costs.
If you are simply reselling items then calculating the cost is easy. However, if you have other expenses such as design, multiple parts, labor, handling, and shipping, calculating the cost is more complex. Service providers typically have the hardest time as their cost is their time, and too many service providers do not value their time appropriately. Identify where you are REALLY making money so that you can focus additional sales efforts to those products or services to see your profits rise quickly.
Conversely, you may consider increasing your prices on other top selling products and services if their profitability is too low to sustain your business. If people are still buying these items, then there is a perceived value in the marketplace and your pricing should reflect that.
Put Your Mouth Where Your Money Is
Here’s a bit of a twist, take a look at your payables. Contact the vendors you have been working with for a few years to explore how they can do to help you sell more. Consider co-marketing or negotiate a special deal that you can pass along to your customers. Don’t limit your thinking to just products, your vendors may offer services you can bundle with your own to create a “value-add” for your customers. And ask them for leads. Vendors should be a good source of referrals for your business.
The Data Chick
Originally published in NY Enterprise Report