I’m currently working with a company helping the owners set strategic goals. One of the most important goals they want to accomplish is related to creating a brand new product.

Currently they are an Original Equipment Manufacturer (OEM) which means they produce products which are then rebranded by their customer before their customer sells the product to the end user.

Creating a new product has plenty of risk and there are no guarantees, however, I like the idea of investing the time and money in this goal because there are many advantages that come with completing it including:

by getting in the business of creating their own products, they can take greater control over their future sales,
this product does not in any way compete with any of their OEM products avoiding any potential conflict of interest, the product is similar to what they already make so they already have processes and experience in place and
they have an existing customer that is encouraging them to make it because the existing customer is unhappy with their current supplier and promises to switch over.

After a couple weeks of assisting in prioritizing and implementing their strategic goals including the new product goal, it dawned on me that they never once discussed or considered creating a goal for their core business which currently generates about $10 million.

The very next time I met with them, I asked if they had a sales plan for their core business and they said, “No”. I asked them why and they explained that the core business is very stable and they didn’t feel the need to focus on it.

So the core business which brings in about $10 million annually is basically run on automatic with no goals or plan and the goal that they felt was of highest priority would potentially bring in about $500,000 to $1 million beginning in 2 years, assuming the investment with this new product succeeds.

It’s important to grow the business and invest in new products however I think it’s a big mistake to ignore the greatest opportunity every company has -- selling to their current customers.

Here are 5 statistics that back up the importance of focusing on selling to your current customer.

The probability of selling to a new prospect is between 5-20%, the probability of selling to an existing customer is 60-70% Source: Marketing Metrics
It is 6-7 times more expensive to acquire a new customer than it is to keep a current one. Source: White House Office of Consumer Affairs
7 in 10 Americans said they were willing to spend more with companies they believe provide excellent customer service. Source: American Express Survey, 2011
80% of your company’s future revenue will come from just 20% of your existing customers. Source: Retention Science
61% of small businesses report that more than half of their revenue comes from repeat customers, rather than new business. Source: BIAKelsey

The reason why this company doesn’t have a sales plan for their core business is because they service their customers so well and the quality of their product is so great, they have become accustomed to creating raving fans out of their current customers base who tell their friends and essentially sell for them.

This company has created an incredible amount of trust with their customer and sometimes it’s easy to ignore that. Also, sometimes sales with those current customers becomes so predictable it gets a little boring. But you know what’s exciting? A brand new product or service or investment in a new branch of the business or the purchasing of a new company. All of which carry a far greater amount of risk.

When you have current repeat customers, you have already created the most important factor - trust. You have their trust, you have created an existing relationship and you already know who the decision makers are if you want to sell them more.

You are the expert with regards to your products and services and your customers keeps coming back to you because they can rely that you are offering them everything that you have that you believe will make your customer even better than they are today.

So why aren’t you trying to extend that trust by sharing more of your products and services with them? Henry Ford famously said, “If I had asked people what they wanted, they would have said faster horses.” Henry Ford understood that his customers were not experts in mass producing automobiles and he realized it was up to him to make his customers aware of his products.

A primary reason those 5 statistics show such a large opportunity to grow your sales with your current customer base is because virtually every company fails to make their customers aware of the products and services they provide. Many of your customers are raving fans, you created the trust, they see you as the expert in the field of business you are operating so it is your obligation to inform your customers of the other products and services you provide so you can make your customer even better and probably more of a raving fan as well.

So as boring and predictable as it might be, don’t take your core revenue source or your current customer base for granted. You worked hard to build that and it’s important to continuously cultivate it. Remember those 5 statistics when considering your sales plan and your growth. It’s far easier and less risky to sell to current customers so always start there.

I hope you have a great day!