Every business needs more business. That's an accepted fact. The unaccepted fact is that most businesses don't use all the opportunities available that will bring them additional business. When one looks for additional business, the primary goal should center around getting "second sales.
"What are "second sales" and why are they important? Second sales are add-on sales, repeat sales and sale by referral. They are important because they are much less expensive to get than first sales. Yes, less expensive because the time and energy spent getting a first sale does not have to be made, and it is the money not spent that goes into profit (or profit that does not have to be spent).
Very few firms make a profit on first time sales. The cost associated with getting a first-time sale are far higher than the costs associated with making a second sale. Hence, second sales are profitable because the costs of getting the customer in the door and to buy are eliminated. This saving can be moved toward the "bottom line."
ADD-ONS can be when customers buy 2 or more things during the same time period. It could also relate to a situation where the customer is thinking about buying a $10.00 item but buys a $15.00 one instead; the extra $5 is an add-on.
REPEATS are the goal for any business gaining "customer loyalty." While it is often spoken of, it often is not pursued.
The opportunity to create add-ons and repeat sales is often overlooked. The opportunity everyone should be aware of is ways to sell new ideas, services and/or products to old customers; sell old ideas, services and/or products to new customers; and sell old ideas, services and/or products to old customers.
Repeat customers can be an indication that, in these customers" minds, the firm sells good quality and value, and gives good service. This, then, very often leads to referrals.
REFERRALS are profitable because the person doing the referral offsets the need to spend marketing dollars to get the customer in the door and to buy. The term "referrals" has several meanings when it comes to second sales.
The first relates to products or services a customer is considering or has purchased. When customers are proud to be associated with the product, salesperson or firm and they believe they can talk with confidence and intelligence about the product or service, they will talk about it at the first opportunity. Their telling about it may result in others coming in to see and, hopefully, buy it.
A second meaning is "word-of-mouth." This means asking people for a referral. Sometimes it can be done unobtrusively, other times it may take getting up enough nerve to come out and ask for it. In the selling business, the adage is "always ask for the sale." In the business of making second sales, the adage is "always ask for the referral."
The third source of referrals comes from the "awareness factor." The more people who know about the firm and what it sells, the better the chances are that when a discussion includes something related to what the business sells, those aware of these products or services will bring this information into the conversation.
There are many ways to segregate customers.
By Account Status: New Customers
- Current Customers
- Past Customers
By Use of Products/Services
- Current Users of a Particular Product/Service
- Researched Leads
Customers in both of these categories have many aspects of their buying situations in common -- their buying situations. Each is a candidate for second sales, sales to go with their "buying situation" of what they:
- are doing,
- planning to do, or
- would like to do
NEW CUSTOMERS: When one is talking to new customers, and to it is customary to be discussing a product or service that goes with something they are doing. That's why they come to you or allow you to do more than just into their environment.
However, these same customers have other buying situations in that there may be things to go with what is in the planning stage.
Additionally, everyone has things they would like to do should the opportunity to present itself. When you concentrate only on the current buying situation and do not try to ascertain if there are products or services to go with their other buying situations, you close the door on possible second sales.
CURRENT CUSTOMERS: They too, have the same three buying situations as new customers. So, while you are taking care of the current project, if you are listening closely, you may perceive an open door for either add-on or repeat sales.
PAST CUSTOMERS: Just because the project is over does not mean the door is closed for second sales. If while you are completing a current project your making an effort to find other things customers have in their plans or would like to do could mean that there would be no such thing as a past customer.
The other aspect of this is to get back to past customers whenever the firm has something new (idea, information, product or service) to offer. While it may not be for them, they may know of someone who could use it which could very well open the door to a new customer.
CURRENT USERS of a Particular Product/Service: The chances for getting additional business are open because they are "researched leads"(you know and maybe they know you have services they could use but you haven't come together yet) or "prospects"(you know/think they could use other products/services but they don't). By letting you in the door the first time they are, in some ways, giving you the key to their pocketbook -- repeat and add-on sales.
RESEARCHED LEADS: It is an oft-repeated saying that before contacting a prospect, research should be done on what the person or firm does or makes, where they are located, their sales/income levels, etc. But it should not stop there because no matter how much research is done, they are prospects for products or services that research doesn't expose.
PROSPECTS: Prospecting for customers has kept the advertising business healthy for years. It has been their key to vendors' pocketbooks because it takes repeated use of the media to move prospects to researched leads and researched leads to current users.
What can a firm do to open the door for second sales? It can use several different methods:
- Provide customers with a menu of possible uses of the products and services the firm has to offer. The expressions is: "If you want to sell the turkey that's in the refrigerator, you had better put turkey in all its various forms on the menu."
- Get customers to talk about what they are doing, planning to do or would like to do. In business, talking about what the firm is doing, planning to do, or cannot find someone to do is a favorite pastime.
- Always talk about the second sale while working on getting the first sale. Do not expect customers to know there is a second sale without being told.
- Offer customers some choices of involvement, price, detail, time, etc. for accomplishing the same thing. When they consider buying a product/service, many firms refrain from buying the bottom or top of the line or service, usually the choose somewhere between the two, thus leaving the door open for add-on sales.
- Ask your staff working on a project to be alert for additional products/services that can be add-ons or repeat business the firm might be able to provide. While they may not wish be responsible for making the sale, they should be held responsible for bringing back the information that will lead to a second sale.
- Ask current customers for the names of firms they believe have similar problems.
- Discuss problems customers are having with vendors as they relate to the products/services your business has to offer.
The road to getting more second sales is when through their actions and efforts everyone in the firm asks New Customers, Current Customers, Past Customers, Current Users of a Particular Product/Service, Researched Leads and Prospects: "What Do You Need Me To Be?"
Copyright © 1995, 1997, 1999, 2000, 2001, 2002 Alan J. Zell, Ambassador of Selling, Portland, OR. All rights reserved.