As if running your business wasn’t hard enough before, there will always be some challenges and questions around the choices of new vs existing clients. Who should you spend the most time and money on?
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Do you want to spend time and money on getting new clients instead of pampering the existing ones?
What will pay off?
In this article we’ll have a look at some of the things you need to consider before deciding how to make a strategy on this.
*By New clients we mean clients that have never bought any of your products/ services in the past. Everyone who has ever bought anything from you, will be referred to as existing clients.
Did you know that several studies say that the costs of acquiring a new client is usually between 4-6 times more expensive than making an existing client come back for a second buy?
And not only does it cost more, but keeping old customers is usually easier to do compared to finding new ones. These are facts that you need to keep fresh in mind.
Let’s look at a couple of questions you should ask yourself:
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What is the vision for my business?
If you’ve done proper planning beforehand, you have a business-plan with some descriptions on the thoughts behind your business-concept. Have you planned to live off of a lot of clients, or just a few loyal ones? Have a look at your plans and notes from the planning stage and try to think through these. They can give you a lot of answers.
Is my day full?
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If your day is already filled with tasks, chasing new clients is not the best idea. The second you get more clients than you have time for in a day, someone will have to pay the price for that. You should be very careful with getting too many projects going – as there always should be time to do the work you have currently, properly and at the right quality.
What can I afford?
Spending time on marketing and chasing new clients will cost you. Marketing can be quite expensive, and using several hours of your time costs money too. For every hour you do something other than what you’re “supposed to do”, you lose income. Obviously you sometimes have to do other tasks than just working on the specific projects, but can you afford to go out looking for new clients if you have projects that you could work with instead?
How often can I expect customers to come back?
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One thing that will be very crucial to you, is how often you can expect existing clients to actually come back. There’s no set answer to this, you’ll just have to sit down and have a look at it. If you deliver products/services that clients only get once or rarely, like logos, websites and so on – you will most likely be in need of chasing new clients more often. If you give your clients something that they’re likely to need occasionally, like various print media, web site maintenance, certain types of photography, illustrations and more – you should focus on those tasks rather than the chasing.
You have to sit down and make yourself a client-list with the types of products they buy from you and have a look at what you can expect.
Can I sell other products that I make today – to existing clients?
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This could be a huge potential source of income for you! Do you realize that many, in fact most, of your clients are very likely to be utilizing many different services from different people? This means that they are quite likely to have projects going on that you could also assist them with. In the past I’ve earned some of my best-paying long-term clients through asking smaller clients for the chance to give them an offer on more products/services than what we originally agreed upon. It wont hurt to ask. If you have a good tone going with that client, offer them a good price for dealing with as many things for them as you could. It’s a positive thing for both parties to have less companies to deal with, and if they have good experiences with what you’ve done for them in the past – there’s a good chance you can expand your business this way!
Can I make new products/services for existing clients?
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Not only is it likely that your clients have others doing projects for them that are in your field, it’s also very likely that there are additional things you could do for your current projects with them. A few years back when I added business-cards and product photography to my business, my first ten orders came from existing clients.
Do you have any new services that you could easily add to what you do? Give it some good thought, as this could be a source of potential income along with serving your clients with an even better line.
How many clients do you lose? – and why?
You should have a look at how many of your clients seem to be coming back and how many you never hear from again. In many cases it’s easy to see why it is like this, so try to think that through. For many always chasing new clients can be harmful to the existing client base. Clients not coming back to buy from you because you’ve forgotten them is very unnecessary. Make a plan on how you can follow up your existing clients to make sure they’re taken care of in the best way possible.
Do you have good communication with current clients?
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Communication is extremely important. Make sure that your existing clients know of all your products and services. When you launch something new, they should be the first ones to know. How about giving them great deals on ordering from your new products once they’re launched?
Also make sure have a plan for contacting clients regularly to get feedback and to ask them if they have anything they’d want you to have a look at. Often, the fact that you call and ask, could be what actually brings you new projects. Many clients have possible tasks for you just sitting there but they’re too busy to get it outsourced right away. So make sure to regularly remind them that you’re there!
If you cant make enough money with your existing client-base
If you’ve had a look through all these steps and realize that it wont be possible to get the income needed, you’ll have to look at how you can fix this. This topic will be another article, just remember to have a plan with everything you do. Like I mentioned earlier, chasing new clients can be a very expensive affair and to make sure you’re not throwing money out the window you should make a good plan before you start.
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There are many theories on how to deal with the new vs existing client challenge. There are so many things to consider that before taking a final stand, you should definitely spend some time doing the required research.
I would recommend to do the best you can for your current clients before chasing any new ones. This can be wise both economically and for your reputation. And when you’re sure your current clients can be served the way you want, getting new clients could be an option.
You’re the one having to do the decisions on this. I hope this article was helpful in giving you a bit more perspective.
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