Question 4: Does anyone else provide these goods and services?
If “No,” go to Question 6. If “Yes,” go to Question 5.
Question 5: What must I do to increase the chance that customers will purchase these goods and services from me instead of someone else?
The comments under Question 3 above apply here as well. It might also be necessary to review Chapter 15 to analyze the competition. Once you have answered this question to your own satisfaction, you are in a position to increase promotion of your existing goods and services to your existing customers. This will involve using the approaches outlined in Chapter 17.
There are only two kinds of customers: current customers, which include previous customers, and potential customers. And there are only two basic things you can do for each of these kinds of customers. You can provide them with goods and services that you currently offer or you can provide them with new goods and services.
The best place to look for opportunities to supply more of your existing goods and services is with your existing customer base. After all, you already have relationships with these people, and they are familiar with the goods and services that you offer.
When you are ready to start something new, consider what new goods and services you can offer to your existing customers. If you don’t know what goods and services they would like from you, ask them.
When you are satisfied that your existing customers are being well served, you can begin actively looking for new customers to whom you can supply existing goods and services. This would be an appropriate time to start asking your existing customers and network of contacts for referrals.
The least effective approach to obtaining more business is to start offering new goods and services to new customers. It is not a good idea to pursue this approach unless you have exhausted all possibilities using the other three approaches.
The Basic Approaches
From a marketing perspective, there are only two basic kinds of customers. First, there are those customers who have purchased either or both of goods and services from you. For present purposes, this includes past customers who at one time purchased something from you but no longer deal with you. These customers, regardless of whether or not they currently do business with you can be called existing customers. Everyone else represents the second kind of customer in the world who has never purchased anything from you. These people, regardless of whether or not they are ever likely to purchase anything from you can be called potential customers.
Realistically, these two types of customers, existing and potential, represent the only sources of new business. There are only two ways to obtain new business from each of these two sources. You can provide more of your existing goods and services or you can provide new goods and services.
Four Basic Approaches to Obtaining New Business
| Provide More | Provide | |
| Existing Goods | New Goods | |
| and Services | and Services | |
| Existing customers | Provide more existing | Provide new services |
| goods or services to | to existing clients | |
| existing clients | ||
| Potential customers | Provide existing goods | Provide new goods or |
| or services to new clients | services to new clients | |
What’s Good and Bad About These Approaches?
Each of these approaches works for all businesses. However, some approaches are more appropriate for some businesses than others. The table on the next page outlines some of the relative advantages and disadvantages of each.
Advantages and Disadvantages of Basic Approaches to Obtaining New Business
| Approach | Advantage | Disadvantage |
| Provide more existing | Can build on existing | Limited opportunity to |
| good and services | relationships with clients | expand client base |
| to existing clients | and expertise in service | and range of goods |
| delivery. | and services. | |
| Provide new goods | Can build on existing | Limited opportunity to |
| and services to | relationships with clients | expand client base. |
| existing clients | to develop expertise in | |
| new service area. | ||
| Provide existing | Can build on existing | Limited opportunity to |
| goods and services | expertise to expand | expand range of |
| to new clients | client base. | goods and services. |
| Provide new goods | Expands client base | Very difficult to learn |
| and services to | and range of services | new goods and |
| new clients | simultaneously: Feedback | services and develop |
| will be more objective. | relationships with new | |
| clients simultaneously. | ||
The Four-Step Sure-Fire Way to Obtain More Business
The following steps detail how to use each of the approaches to identify and develop new business. This process involves synthesizing the information that has been gathered and developed throughout this book. For maximum effectiveness, follow the process one step at a time, beginning with Step 1.
Step 1: Identify Existing Customers for Existing Goods or Services
If you have just started your business, you probably don’t have existing customers. Skip this step as well as Step 2 and go to Step 3. Instead of asking existing clients for referrals, ask personal and business contacts who meet the profile of existing clients for referrals.
Once again, you will use the customer list that you prepared in Chapter 13.
Once you have identified your customers, you are ready to start the process of identifying new business opportunities. Ask yourself the following questions. Make a couple of photocopies of the form at the end of this section of questions, and use these forms to record and analyze your answers.
Question 1: Are there existing customers to whom I can provide more of the goods or services already offered?
To identify individual customers, review your customer list and ask this question about each customer. If you have had good working relationships with past customers, but these people no longer actively deal with you, consider reviving the relationship. Ideally this will allow you to resume supplying them with goods and services. On the other hand, you won’t want to renew acquaintances with customers who didn’t pay you or otherwise caused you problems. Why set yourself up for more problems?
If the answer to this question is “No,” go to Step 2.
If the answer is “Yes,” go to Questions 2 and 3.
Question 2: To which existing customers can I provide existing goods or services?
Question 3: What existing goods or services can I provide to these customers?
It might be difficult to answer these questions accurately. If you can’t answer based on your own knowledge, it might be necessary to review the material in Chapter 13 that relates to identifying who your customers are and what they need from you. Another alternative might be to survey some of your customers, using a procedure similar to the ones outlined in Chapter 16. If you choose this approach, modify the questions in the survey to reflect Questions 2 and 3.
Once you have identified existing customers to whom you can provide more goods and services, record the information on your form and answer Question 4.
Question 4: Does anyone else provide these goods and services?
If “No,” go to Question 6. If “Yes,” go to Question 5.
Question 5: What must I do to increase the chance that customers will purchase these goods and services from me instead of someone else?
The comments under Question 3 above apply here as well. It might also be necessary to review Chapter 15 to analyze the competition. Once you have answered this question to your own satisfaction, you are in a position to increase promotion of your existing goods and services to your existing customers. This will involve using the approaches outlined in Chapter 17.
Question 6: Do these clients really need and want my goods and services?
If “No,” don’t waste your resources trying to promote goods or services that your customers neither want nor need. Go to Step 2.
If “Yes,” go to Question 7.
Question 7: Are these clients willing and able to pay for these goods and services?
If “No,” don’t waste your resources. Go to Step 2.
If “Yes,” start to develop a plan to promote these goods and services to your existing customers.
| Provide More Existing Goods/Services to Existing Customers | ||||||
| How to Provide | ||||||
| These Goods and | ||||||
| Services to This | ||||||
| Customers | Goods/Services | Customer | ||||
| (Question 2) | (Question 3) | (Question 5) | ||||
____________________________________________________________________________________
____________________________________________________________________________________
____________________________________________________________________________________
____________________________________________________________________________________
____________________________________________________________________________________
____________________________________________________________________________________
Step 2: Identify Existing Customers for New Goods or Services
With this step, you focus on identifying new goods or services that you can offer to your existing customers. As with Step I, you will use the information that you gathered through analyzing your customers’ needs and wants. It is possible that one or more customers might have suggested something new for you to sell. Or you might have come up with the idea as a result of having seen another business offer goods or services that you think your existing customers might like.
The easiest way of identifying what new services to offer is to ask your existing clients what new services they would like. This can be done either through a special survey or questionnaire or by adding a specific question to existing questionnaires. Your query might be as simple as, “Are there any goods or services that I do not offer that you could use? If so, what are they?”
Once you have identified specific new services, you then develop a plan for offering these services. Whenever possible, ask selected customers for their input in the development of the service delivery plan. This will ensure that your new service offerings will meet your clients’ needs and wants. When the new services are ready to be offered, use the techniques outlined in Chapter 17 to promote your new services.
The actual process parallels the one used in Step 1. The following questions replace questions 1 through 7. The comments made above apply equally to the corresponding questions below.
Question 8: Are there existing customers to whom I can provide new goods or services?
If the answer to this question is “No,” go to Step 3.
If the answer is “Yes,” go to Questions 9 and 10.
Question 9: To which existing customers can I provide new goods or services?
Question 10: What new goods or services can I provide to these customers?
Once you have identified existing customers to whom you can provide more goods and services, record the information on your form and answer Question 11.
Question 11: Does anyone else provide these goods and services?
If “No,” go to Question 13.
If “Yes,” go to Question 12.
Question 12:
Question 13:
What must I do to increase the chance that customers will purchase these goods and services from me instead of someone else?
Do these clients really need and want these goods and services?
If “No”, go to Step 3.
If “Yes,” go to Question 14.
Question 14: Are these clients willing and able to pay for these goods and services?
If “No,” go to Step 3.
If “Yes,” start to develop a plan to promote these goods and services to your existing customers.
Step 3: Identify New Clients for Existing Goods or Services
No business—even the world’s largest—can expect to sell things to everyone in the world. All businesses narrow their potential customers to a more manageable range. Before charging off to try to sell existing goods and services, make sure that you have identified who your ideal customers are. Use the profile that you developed in Chapter 13. Assuming that you have done a thorough job of researching your market, you need not move beyond this profile: There will be plenty of potential customers who would make ideal customers for you.
Your network of contacts is the next best source of new customers. Their willingness to refer their contacts to you is an endorsement of you and your business. This fact will not be lost on potential customers. If your contacts do make referrals to you,
remember to thank them appropriately. Depending upon the size and nature of the business referred to you, this thank you could range from a simple phone call to gifts or, in some cases, referral fees. For further information about how to allow your network of contacts to help you with referrals, see Networking Is More than Doing Lunch.
Using the same process used in Steps 1 and 2 to identify potential clients, ask the following questions.
Hot Tip
The first place to start looking for new customers is within your existing customer base. If you have not asked your existing customers for referrals, now would be a good time to do so. Similarly, if you have not asked your contacts for referrals, spread the word that you are looking for new business. This is especially true for owners of new businesses who likely have more contacts than customers.
Question 15: Are there potential customers to whom I can provide goods or services already offered?
If the answer to this question is “No,” go to Step 4.
If the answer is “Yes,” go to Questions 16 and 17.
Question 16: To which potential customers can I provide existing goods or services?
Question 17: What existing goods or services can I provide to these customers?
Once you have identified existing customers to whom you can provide more goods and services, record the information in your photocopied form and answer Question 18.
Question 18: Does anyone else provide these goods and services?
If “No,” go to Question 20. If “Yes,” go to Question 19.
Question 19: What must I do to ensure that customers purchase these goods and services from me instead of from someone else?
Question 20: Do these clients really need and want these goods and services?
If “No”, go to Step 4.
If “Yes,” go to Question 21.
Entrepreneur Beware
Do not proceed with Step 4 unless you have completed all other steps. As an example, Lorne might decide that he would like to start photo-graphing prepared food for restau-rants to add to their menus. As a videographer, he might have some knowledge of the principles of still photography, but would probably know very little about photographing prepared food, a very specialized activity. Because he probably does not know or understand the restau-rant industry, Lorne will undoubtedly encounter problems establishing
and maintaining relationships with potential clients.
Question 21: Are these clients willing and able to pay for these goods and services?
If “No,” go to Step 4.
If “Yes,” start to develop a plan to promote these goods and services to potential customers.
Step 4: Identify New Clients for New Goods or Services
This fourth step combines elements of Steps 2 and 3. Keep in mind that this is the most difficult approach to obtaining new business, requiring that you market goods and services that may not yet have the kinks worked out, to clients with whom you have not yet formed a working relationship.
If, after you have considered these four steps, you are unable to identify opportunities for new business, you have two options. First you can go through the material again, this time more thoroughly, to identify opportunities that you might have missed the first time through.
Second, if you are unable to identify any opportunities to generate new business, your business might not be viable. If this is the case, you should definitely assess the future of your business. A business that is incapable of generating new business will not last.
The Least You Need to Know
Go through the process of identifying more business or new business opportunities when you are expanding.
The best place to look for new business opportunities is your existing customer base.
The next best source of new business opportunities is through referrals from customers and contacts.
The least effective source of new business is trying to provide new service to new customers.
