Are your sales growing? Where are the new sales coming from? No matter what business you are in, there are only four sources of new business.
Only Four Sources Of New Business!?
Why are there only four sources of ways to grow your sales? Think about it and look at the chart with this blog. You can add new customers to buy your current product line or sell more of those products to existing customers. If your existing customers have needs for products other than what you currently sell perhaps you can add new products to your offering. By adding new products the possibility exists for adding new markets with needs different from current customers. See, only four sources of new business for your company or sales territory.
New Products and New Customers
This is the most challenging way to grow business. It’s a difficult enough task to convince a new prospect to trust you even when you are selling a proven product. Convincing a prospect to take a chance with an unknown company and unproven product is not impossible but more difficult than other options.
I worked for a company in the 1980’s when metal recycling was taking off. We made thermal processing equipment to heat various materials to high temperatures. The company had never sold equipment for metals recycling but had technology that could work. By redesigning some of the current machines to process scrap aluminum beverage cans, oily brass turnings and steel mill scale we were able to take these new products to markets never served before. Creating a source of new business.
Existing Products for Existing Customers
Perhaps this is the easiest way to increase sales. These customers are already buying your products and have a good relationship with your company. Maybe they also buy the same product from a competitor. So there is an opportunity to add value to your offering and take a greater share of the business. A great opportunity is when a company expands. As their production increases the raw material or components needed to meet the new capacity grow creating a source of new business.
Early in my career I sold for a materials handling company. One of the products we sold was an airline baggage cart. We benefitted when an airline customer expanded the number of gates it served and needed more carts to handle the luggage.
New Products to Existing Customers
Existing customers are ones you have a mutually beneficial long-term relationship with. You have gained their trust and respect so selling them additional products is a source of new business. The new products can be something brand new (think cell phones a few years ago). Or a product new to your company.
Companies selling products made by others, commonly called distributers or manufacturers representatives, often grow sales this way. They take on other product lines complementing what they currently sell. The plan is then to sell those lines to companies they have a relationship with. I worked for a fire protection company selling fire suppression systems for remote telephone equipment sites. When “smart” fire alarm systems were invented, we picked up those products to sell to our telephone company customers.
Existing Products to New Customers
Finding other companies matching the demographics of your best customers is another source of new business. If your best customers like what you do and you have capacity to serve others like them then pursuing business with other companies in the target market is a way to grow sales.
A metal fabrication company I sold for had a great reputation for quality and service in fabricating and delivering architectural metal work. We sold these products to construction companies for their projects. As our capacity increased we sought more construction companies to sell to. Plus we were referred to other locations of our best customers. Selling to branches and divisions of your best customer is another source of new business.
Why Bother Finding A Source of New Business?
In life the unexpected happens! Your best customer goes out of business. The loyal buyer retires. The economy tanks. No matter how much business great salespeople have they are continually looking for a source of new business. They network, prospect, and ask for referrals. Salespeople listen to the needs of their customers and bring that information back to management to consider new products and services. They look for new business in all four sources.
What you can do right now
Take a look at the business plan for your company or sales territory. Which of the four sources of new business should you pursue? Make a plan of how to increase sales from that source.
Don Crawford & Lois Carter Crawford