The best source of success is already with you
Ask yourself this question: How can our current customers help us unleash the latent profit in our business?
I believe this with great conviction: Almost without exception, the most lucrative source of latent profit for most companies is in their existing customer relationships.
Let's put this in the context of the tough situation the economy has put all of us in. Your customers have less money to spend, and your competitors, in their desperation, are doing everything they can to steal your business.
Now, ask yourself this question: How many of our customers are giving us all of the business they could?
If you are like most people, your answer to that question is somewhere between none and 20%. Yes, some of you may say that 50% of more of your customers are giving you all the business they could, but you'd be in the minority. Here's the bottom line; we all have significant untapped potential in our existing customer relationships.
I saw an example of this potential just this morning, while I was conducting a phone consultation with a team from a mid-size, business-to-business service company. Right at the beginning of the conversation they told me that the most important issue they face is the challenge of finding new customers in this tough economy. I asked them what percent of their existing customers are giving them all the business that is reasonably possible. Their answer: Fewer than 20% of their client relationships are fully developed. Sure, new customers would be great. But their quickest route to building their business comes from building on the relationships they already have.
We spent the next half-hour talking about their existing customer relationships, and which ones had the most potential to develop additional new business. It became clear to all of us very quickly that the biggest danger they faced was to get distracted by efforts to acquire new customers and shortchange the opportunity right in front of their face: developing existing relationships. They are now well on their way to creating and implementing a plan to mine business from current customers.
So, the first, most important thing you must do to thrive in 2009 is not to cut costs, fire people, or, heaven forbid, bury your head in the sand and wait for the recession to be over. The first, most important thing you have to do is nurture and develop your existing customer relationships.
Yes, you need new customers. But this isn't a question of "either/or," it's a case of "both/and," with existing customer relationships being the thing to attend to first, foremost, and disproportionately.
[This is part 2 of a 6 part series. Click here to read part 1. For more on the idea in today's post, you can listen to Steve Yastrow's 2009 Readiness Teleseminar, in which he presents Six Readiness Questions to help you thrive in 2009. Information related to this post starts at 17 minutes into the one-hour seminar.—CM]