For fast-growth agencies, maximising your profit by expanding on your current client portfolio is crucial. This week, The Wow Company shared practical tips and insights on how to broach this in a way that increases value for you and your clients.
Everyone has, or should have, a strategy for winning new business. There will be a clear plan in place for how to generate leads, you will have targets that you need to hit etc. But what strategy do you have in place for maximising profit and resource with existing clients? If you want to see success in this area, you should take the same view with upselling as you do with winning new business.
Existing clients - by nature - clearly value what you do, so having conversations with them about developing your relationship should be relatively straightforward, and ensure that both sides feel they're gaining value from any changes.
Start by identifying who in the business should be responsible for overseeing the strategy; someone that your team will report and feed back to. It’s not a case that this person should shoulder this task alone, but they will ultimately be accountable for the process. Communication plans and knowing who to target fall into their responsibilities.
Equally, this is something that the entire team can get involved with. Listening out for clues when speaking to clients about potential new projects or other needs within the business can be a massive help to whoever becomes responsible.
So, how do you know what sort of budget to put behind targeting existing clients?
A good place to begin is by halving the budget you put behind pitching and winning new business. You’ll find that the business you win from existing clients is on par with what you’d win from new clients. Putting budget into building relationships with existing clients also adds value to your service in general. The client will rate the effort and are more likely to recommend you to others and give you more work. Below are some simple things you can do to build up trust with your current clients.
One of the most beneficial ways of developing a relationship is by educating and entertaining. This can be done by bringing clients together for events/webinars etc. to deliver something beneficial to them while also promoting your services. How many times have you potentially lost out on work because a client isn’t aware of other services you offer?
Think about five things you could do to help a client. You could even ask them yourself. Some of them might be simple, such as helping on social engagement by liking and sharing posts. Simple things like this will give your relationship an added value, and you will be remembered fondly for doing so.
Talking of value, try creating a ‘value bank.’ This is a figurative system whereby every time you do something to add value to their business, you are ‘depositing’ into the bank. You need to fill up this bank before you can make a ‘withdrawal.’ This could look something like asking for a referral/getting an introduction with someone, time to pitch some new ideas to them. If you first build up this ‘bank,’ of adding value to their business, they’ll find it harder to say no.
A simple gesture like sending a card or small gift on celebratory occasions is a good way of going above and beyond other agencies. This is the kind of thing that people are likely to shout about on their social platforms and will earn you some great brownie points. Alongside this, can you celebrate the wider successes of your client by nominating them for industry awards? People are expecting you to do a great job, so you need to do more in order to stand out and get your testimonials etc
If you have a meeting with a client where the environment is suitable, get to their offices twenty minutes early. Chat to the people within the company and try to leave a good impression with them. On the off chance that someone was to move out of the business - or if they're working in a different vertical - they may well just remember you and seek out your services elsewhere.
Once a trusting relationship has been established, you’ll be in a good position to start the process of upselling your current services. There are four key tips on how you can do this.
Begin by creating a formula to rank your current clients in order of opportunity to upsell. Think about which clients are on retainers and which are you doing a one-off project for. Then think about the different services you offer. For the purpose of this piece, let’s say you offer five different services. One-off project clients will make up the lower rankings. Long-term clients who use four/five of your services make up the top. It’s those in the middle who will be prime targets for your upselling efforts.
This is an easy exercise that can involve the whole team, and it could be interesting to hear the reasons why some people voted differently to yourself.
Think about when the best time would be to have upselling style conversations with clients, and how they would best receive it. Would they prefer a phone call, email or maybe even a face-to-face over lunch?
Don’t just limit a client’s knowledge of your services to what they have briefed. Let them know everything you do.
So many times, an agency has lost out on work purely because the client doesn’t know what else you offer. It can be as simple as saying ‘by the way, we also offer this…’ Perhaps create a newsletter to keep clients up to date with any new hires/service offerings. It might be that they’re not looking for it right away, but 6-12 months down the line when they do, you should be first on their list.
The natural answer to when someone asks how you’re getting on is ‘really good, very busy.’ This is because people associate being busy with success. However, if a client needs help with something, telling them that you’re up to your eyeballs might make them think twice about mentioning it. By all means tell them that you’re busy, but add that you have the capacity to take on more projects. Say ‘if there’s anything you’re thinking about, let’s have a chat.’
Finally, it’s time to think about the numbers to quantify your upselling strategies. Let’s start off with your service penetration score and how often you review it. This can be calculated by reviewing what services your clients are buying from you.
For example, if you have five service streams and a client is only buying one, their service penetration score would be 20%. These percentages can be a good way of knowing which clients to target and where to start. Clients with a score of 80 – 100% are perhaps not the best ones to start with, similar to those around the 20% mark. It’s the 40 – 60% ones where you should focus most of your time. These are the agencies that are using a few of your services, the work is consistent and they’re happy with the results.
Looking at gross profit margin by client will give you a great idea as to which clients you should be selling to more. Equally and more importantly is if you can be looking at gross profit margin by service level.
Think back to the five services that you sell and the penetration scores. If you can calculate your gross profit margin by service line, (see our first session on how to calculate your gross profit margin) you can work out which is the most profitable. If one client buys three services, but not your most profitable, they should be top of the list of who to target.
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If you’re wanting to maximise profit from your existing clients, here are the key takeaways from this article that you can begin to put into practice today:
- Identify someone with in the business to oversee the process
- Educate and entertain your clients with webinars and events etc
- Offer to see where you can help
- Celebrate birthdays/anniversaries etc
- Build your network and future leads
- Let your clients know about your full service offering
- Let them know that you’re available
In our next and final session, we’ll be looking at the key requirement for implementing any profit-driving strategy – getting the team on board, including how to incentivise them to grow a profit culture by nature.