8 Ways to Boost Service Business Revenues. Part 1 of 2
8 Ways to Boost Service Business Revenues. Part 1 of 2
However, if you want to boost your service business revenues consider these ways to improve customer loyalty and generate more sales - without investing in expensive advertising campaigns.
1. Focus on improving customer retention.
You've probably heard statistics about how much extra it costs to attract new customers rather than keeping existing ones. Are they true? You bet they are! At a minimum, studies have shown that it costs 5 to 6 times more to attract new customers than it does to implement strategies to retain existing customers.
The key here is to "implement strategies" to keep your existing customers. These strategies can be in the form of either switching barriers or relationship marketing. Switching barriers can create a sense of familiarity with your business and discourage customers from trying competitors. Relationship marketing tactics increase the degree of loyalty customers have towards your business.
With many customers now being well educated in sales and marketing gimmicks, they are usually loyal to the value they receive, so look at your 'value offer' and make sure it meets the grade.
2. Understand your customers value equation.
These days customers are loyal to the concept of value, not necessarily to one brand (or business). So it's important to understand your customers value equation in order to present your services in the best possible way.
What's a value equation? It's simply the difference between the costs a customer incurs in using your service and the benefits they derive from it.
For example, costs include such things as inconvenience, time, risk, even sometimes personal pain, and of course the monetary price they pay.
Benefits include not only the obvious outcome of the service, but also personally-oriented aspects like confidence, social benefits and a feeling of special treatment.
It's important to recognise this equation may vary depending upon the type of service provided and the unique mix of client/service provider that is an essential element of service encounters.
3. Create opportunities to cross-sell.
Have you ever gone into your bank to use a teller and upon completion of the transaction had the teller suddenly ask "Can I help you with insurance today?" Like most people you probably say "No" and simply walk away.
The teller is trying to cross-sell the banks insurance services to you. But it fails. You know the teller has no understanding of your situation and is simply trying to sell you insurance.
Don't just promote your other services to every client you have. Your customers want you to understand their needs so you can recommend what will suit them. First build the relationship…then offer suggestions on how they can improve their situation by using your other services. To be successful you must develop an effective selling process.
In some cases you may find it helpful to develop alliances with complementary service providers so you can recommend their services when it is in the best interest of your client.
4. Don't concentrate on your price.
"All customers buy on price!" Work to this philosophy and you'll miss many opportunities to build your business. Price is important, as it is often a major factor in the value equation (see point 2 above). But don't assume you must always offer the lowest price. Various studies have shown the top criteria by which clients choose service providers is often competence, courtesy and understanding of the clients needs.
Also, price has been shown to be only third important in reasons for clients leaving a firm. Core service failures and service encounter failures are the main reasons for customers to defect from service firms.
5. Don't have a USP!
For many years the mantra has been to develop a single Unique Selling Proposition (USP) that will position your business in its own niche. For many service businesses this approach can be very limiting. Often the same service can be offered to numerous segments of the market, with each segment having its own reasons for using the service.
But don't abandon the USP concept. Use it to develop a meaningful position focused on the needs of each of the segments you wish to target. This may mean having a slightly different emphasis on your sales and marketing message for each of the different target audiences.
For example, I have a client in the employment services market. Her firms services can be used either in 'recruitment', 'staff development' or 'career transition' situations. Whilst the underlying benefits may be very similar, from the clients perspective they are looking for different types of results. Tailor your message to the recipient.
8 Ways to Boost Service Business Revenues Part 1 of 2 - To learn more about this author, visit Stuart Ayling's Website.
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Service-based businesses are fundamentally different to product-based businesses. Service providers experience different sales and marketing problems (or challenges), and often have more complex relationships with clients.
However, if you want to boost your service business revenues consider these ways to improve customer loyalty and generate more sales - without investing in expensive advertising campaigns.
1. Focus on improving customer retention.
You've probably heard statistics about how much extra it costs to attract new customers rather than keeping existing ones. Are they true? You bet they are! At a minimum, studies have shown that it costs 5 to 6 times more to attract new customers than it does to implement strategies to retain existing customers.
The key here is to "implement strategies" to keep your existing customers. These strategies can be in the form of either switching barriers or relationship marketing. Switching barriers can create a sense of familiarity with your business and discourage customers from trying competitors. Relationship marketing tactics increase the degree of loyalty customers have towards your business.
With many customers now being well educated in sales and marketing gimmicks, they are usually loyal to the value they receive, so look at your 'value offer' and make sure it meets the grade.
2. Understand your customers value equation.
These days customers are loyal to the concept of value, not necessarily to one brand (or business). So it's important to understand your customers value equation in order to present your services in the best possible way.
What's a value equation? It's simply the difference between the costs a customer incurs in using your service and the benefits they derive from it.
For example, costs include such things as inconvenience, time, risk, even sometimes personal pain, and of course the monetary price they pay.
Benefits include not only the obvious outcome of the service, but also personally-oriented aspects like confidence, social benefits and a feeling of special treatment.
It's important to recognise this equation may vary depending upon the type of service provided and the unique mix of client/service provider that is an essential element of service encounters.
3. Create opportunities to cross-sell.
Have you ever gone into your bank to use a teller and upon completion of the transaction had the teller suddenly ask "Can I help you with insurance today?" Like most people you probably say "No" and simply walk away.
The teller is trying to cross-sell the banks insurance services to you. But it fails. You know the teller has no understanding of your situation and is simply trying to sell you insurance.
Don't just promote your other services to every client you have. Your customers want you to understand their needs so you can recommend what will suit them. First build the relationship…then offer suggestions on how they can improve their situation by using your other services. To be successful you must develop an effective selling process.
In some cases you may find it helpful to develop alliances with complementary service providers so you can recommend their services when it is in the best interest of your client.
4. Don't concentrate on your price.
"All customers buy on price!" Work to this philosophy and you'll miss many opportunities to build your business. Price is important, as it is often a major factor in the value equation (see point 2 above). But don't assume you must always offer the lowest price. Various studies have shown the top criteria by which clients choose service providers is often competence, courtesy and understanding of the clients needs.
Also, price has been shown to be only third important in reasons for clients leaving a firm. Core service failures and service encounter failures are the main reasons for customers to defect from service firms.
5. Don't have a USP!
For many years the mantra has been to develop a single Unique Selling Proposition (USP) that will position your business in its own niche. For many service businesses this approach can be very limiting. Often the same service can be offered to numerous segments of the market, with each segment having its own reasons for using the service.
But don't abandon the USP concept. Use it to develop a meaningful position focused on the needs of each of the segments you wish to target. This may mean having a slightly different emphasis on your sales and marketing message for each of the different target audiences.
For example, I have a client in the employment services market. Her firms services can be used either in 'recruitment', 'staff development' or 'career transition' situations. Whilst the underlying benefits may be very similar, from the clients perspective they are looking for different types of results. Tailor your message to the recipient.
8 Ways to Boost Service Business Revenues Part 1 of 2 - To learn more about this author, visit Stuart Ayling's Website.
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Dave KurlanDave Kurlan is the founder and CEO of Objective Management Group, Inc., the industry leader in sales assessments and sales force evaluations, and the CEO of David Kurlan & Associates, Inc., a consulting firm specializing in sales force development. Dave has been a top rated speaker at Inc. Magazine's Conference on Growing the Company, the Sales & Marketing Management Conference and the Gazelles Sales & Marketing Summit. He has been featured on radio and TV, including World Business Review with General Norman Schwarzkopf, in Inc. Magazine, Selling Power Magazine, Sales & Marketing Management Magazine and Incentive Magazine. He is the author of Mindless Selling and Baseline Selling – How to Become a Sales Superstar by Using What You Already Know about the Game of Baseball. He created and wrote STAR, a proprietary recruiting process for hiring great salespeople, and he writes Understanding the Sales Force, a popular business Blog and is a contributing author to The Death of 20th Century Selling and 101 Great Ways to Improve Your Life, Volume 2. - Visit Dave Kurlan's Website |
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