Quick, name the most profitable segment of customers in your business.

Most business owners who answer this question will usually answer based on a demographic segmentation. For example, they might say “married women, aged 20 to 40″ or “executives of Fortune 500 firms” or “B2C businesses with over $1 million in sales”. Knowing these segments is helpful.

But if your answer was like one of those answers, you’re missing out on a slightly narrower and even more profitable segment! Repeat customers. Your existing customer list is your most profitable segment of customers. When you sell to them, it costs you less – per dollar earned – to generate that revenue. The most obvious reason is that they already know and trust you, so there is little or no marketing cost (although there might be some customer-relationship-nurturing costs); and they already trust you to deliver on your promises, so the sales cycle is shorter.

In her SmallBizTrends blog post, “Selling to Existing Customers”, she outlines 3 reasons why existing customers should be high on your list of people to make sales to. To summarize her reasons, she says that selling to existing customers “enhances the bond between you and your client”, “presents opportunities for increased business,” and “is a cost effective marketing strategy.”

Her article is great but does not go into specifics about how to do communicate with existing clients, so we’ll give you some ideas here:

When you connect with your client in person or over the phone, also connect with them on Facebook, Twitter, LinkedIn, and any other social media that you use. This will give you an easy way to gain insight into their lives and they will hear from you from time to time in a non-threatening (non-sales!) environment.

Be intentional in your communication to existing customers. Far too many businesses spend their time, money, and effort on convincing people that they are a credible organization. New prospects don’t know that and they need to hear the message… but previous customers already know that and the message is redundant to them. To your existing customers, your message should be “you know we provide value; let us provide even more value for you!”

Today’s technology gives us many advantages to segment our marketing between new and existing customers. Even something as simple as a database or as complex as a CRM system enables you to split your communication efforts so the right customer hears the right message.

Reward repeat buyers with programs that enhance loyalty and sales. This might include something like the popular “Buy 9 Get One Free” program or a membership into an insiders club which provides across-the-board discounts, invitations to insiders-only events, and more.

Your prospects will take a lot of your energy to turn them into customers. And once they’re customers, don’t give up on them! Invest time into nurturing your relationship with existing customers. You’ll increase the amount of per-client PROFIT you make, and you’ll solidify your customer base for the long-term.

photo credit: dno1967b