Most business owners when asked will say that new business is always welcome, that new customers are the key to growth and expansion, however look closely behind that philosophy for a moment and don’t assume that the first sale that any business makes to a new customer is not the most important sale.
- The first sale to a new customer is a fantastic moment for all SME’s. New revenue sources, new territories and an expansion of the firm’s client list are all reasons for celebration. However one of the dangers for SME’s as indeed for all businesses is to view this as an event in isolation. The truth is that sales have to be viewed as an ongoing fluid process where the first sale is not the most important sale rather it’s the second sale that is the most significant sale for your business.
- Anyone can get lucky, some salespeople fail to realise the difference between a good sale and a fortunate sale. Some of your customers may have been impulse buying. Some customers may simply have made a small order to make your sales team go away, others may have been mis-sold or over promised. Hence it is key for all SME’s to understand that the first sale simply adds a positive to their P+L whilst the second sale is the one that defines your R+L (relationship or loss). The first sale is a trial; the second sale is the start of a relationship.
- Customers coming back for that second purchase are vital in all businesses. Some sectors believe that a 2% increase in customer retention can be the equivalent of a 7% reduction in costs. The second purchase by its very nature is an affirmation of your product or service; it’s the root of an ongoing relationship not to mention a reduction in your cost of sale. (Statistics show that this can be up to 5 times cheaper). Second time customers become advocates of your product and as the relationship grows they allow better financial planning for the SME owner.
- There is a massive downside to not getting the second sale. Your customers are effectively telling you that they didn’t like the first sales technique, that they don’t ascribe value to your product or service or that they have sourced a better solution from one of your competitors. If customers become negative advocates of your company then huge damage has been done.
- Not every company can afford to invest in sophisticated CRM tools to manage this; hence it’s vital that sales professionals are trained in the correct selling techniques. They should be trained to view the first sale as not a commission driving, isolated event, but rather the first step in a corporate relationship between your firm and the customer. In short they must be motivated into seeing the second sale as the most important sale that they will make to their customers and must prepare accordingly .If sales people are correctly trained in offering customer delight, adding value to a customer and relationship building, then the loss of second sale syndrome will not occur and your business will grow consistently.
- Training in subtle, easily integrated, relationship building sales will pay for itself quickly if the concept of the second sale being the most important is built into your company’s sales culture.
Simon Kenny,Director,Corporate trainer,Skills4Sales
