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Your Low-Profit Customers Are Still Profitable

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30

Nov

Your Low-Profit Customers Are Still Profitable

Tue 30 Nov, 2021 Business and Organizational Purpose Ulari Nwaogazie

Having interacted with several entrepreneurs especially start-up businesses, there are always does customers that you would consider as low-profit customers because they price lower than other customers. Regardless of how you may feel these customers are of “lower value” there is still immense value you can derive from these relationships with these strategies. 

 

While They Are Yet Low Profit, Provide an Excellent Customer Service

People are still willing to pay more for a good customer service experience. For most customer interactions, customers seem to lean towards wanting and love a convenient experience. This is fast becoming a value differentiator that more and more customers consider important. By utilising technology, you can simplify processes and make the customer’s experience easier.

A convenient experience can also be achieved when you offer subscription model payments or payment plans. These create a predictable experience and create recurring revenue.

 

Re- Strategize How You Sell To Them

Rather than sell the product sell the value of the product or service. Focus on explaining and expressing how it works for the customer. If you focus on the value, the price becomes less and less important. If you do not focus on value, the only thing you can talk about is price. Value selling is a sales technique that leverages customer anticipation of enjoying the benefits of the item for a sale. With this approach, the sales conversation focuses on how the buyer’s life will be improved with the asset at hand, rather than the actual features and hard facts related to the product.

The best way to carry this out is to first identify the type of problem the customer has,  then make a list of all the benefits of your product or service and the ways it will solve your customer’s problems. In addition, you can also create irresistible premium-priced packages for your services

 

Negotiate Retainers

The reason why these low-profit customers may be pricing low could be because your fee offer is of huge volume and sounds heavy for them to pay. The point is if you are providing a valuable service, people will use the service or product more than once. There will always be a reoccurring demand for a competent professional. So, negotiating for retainers’ arrangement provides a win-win situation. You get stable cash flow; the client gets priority treatment – everybody is happy!

 

Understand What These Segments of Customers Value

Most customers, especially those whose costs are driven by what they purchase—increasingly look to purchasing to increase profits and therefore pressure suppliers to reduce prices. To persuade customers to focus on total costs rather than simply on the acquisition price, a supplier must have an accurate understanding of what its customers value and would value.

How do you define value? can you measure it? What are your products and services worth to customers? Remarkably few suppliers in business markets can answer those questions. And yet the ability to pinpoint the value of a product or service for one’s customer has never been more important.

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