No one likes to loose to competition but the reality is your customers are buying 20-50% of their products and services you could/should be offering from your competition because your business missed offering them. In effect, you are helping to keep your competitors healthy. There is a comprehensive strategy that can; generate significant gross revenue; drive strong margin incremental sales; create more value within your existing cost structure; and retain customers longer while creating a barrier for them to leave or be seduced away.
Start By Understanding Your Customer's Lifecycle
For the purpose of this article "Customer Lifecycle" will be defined as, "The products and services your client use before, after, and with your service/product. A lifecycle also includes factoring in seasonality, market trends, competition, and changes in growing, stable, or declining businesses." These factors create purchase demands your client will go to your competition for if you recognize what they need.
Another way of looking at this is, your customers are always buying products/services you are not offering. If you want to grow your business look at what they are buying from who, when, and why.
Where To Begin A Lifecycle Analysis
Following are a few points you can use to start creating a lifecycle analysis which will become a road map for your potential growth.
1) Look at what your customers are buying to run their business. Regardless of the size of your business, or how diverse your customers are, you will find that there are several common areas your customers are buying in to run their business. For example, if you are selling software, your customers are buying and using servers, PC's, other software, printers, toner, tech support, system security, redundancy systems, and so on.
2) Look at what your competitors are selling that your aren't. Depending on how specialized or broad your business is, look at the products/services your competitors offer that aren't in your portfolio. If these are high selling areas your customers (or customers you want) are buying from competition, it is likely they are buying something similar that you offer from your competition along with the other product offers you don't give them. For example, if you sold clothing, and your top competitors offered similar products, do they sell belts, accessories, under garments, or shoes in addition to clothes?
3) Think about the suppliers they buy from. Suppliers are indirect competition in some cases for "share of customer spending". If a customer needs to use your product in combination with other products to get the full use out of what they bought, there is an opportunity to offer them something extra to increase their total purchase. For example, if you sold automotive parts to garages they are also using power tools, storage trays, racks for holding products, and waste disposal to go with your products.
What's Next?
These 3 points are some of the factors that start creating a picture on how to use the business structure you have to substantially grow incremental sales with a minimum of effort. There are several overlapping analysis and strategies which take these starting points and transform them into wise, money making, and excellent competitive barriers. Look for more articles that will cover these points.
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