Increase Profits by More Than 25% - Without a Single New Customer

Like many small to medium-sized Wholesalers, Distributors, or Manufacturers that sell physical products, you might be struggling to make a healthy profit — or maybe you’re just not making as much profit as you’d like.

Over the years, you’ve invested more and more in the business to help you grow. New premises, new equipment, and new hires have increased your overheads — and your biggest concern now is making these investments deliver results.

Like all SMEs, you’re seeking a combination of sales growth and increased profitability. Your natural response to this challenge is to look for new customers. But sales and marketing efforts to acquire new customers are expensive, and not an instant fix. So what can you do to increase your profits in the short-term, when you need growth and revenue the most?

Shift your focus to existing customers

Did you know?

It costs at least 5x more to bring in a new customer than retain an existing one.

Source: Harvard Business Review

Rather than break the bank with expensive marketing campaigns and big ad spends to land new customers, the most successful businesses in any industry focus more attention on the customers they already have.

Your existing customers are where you can really boost your profit margins — by more than 25%, according to the Harvard Business Review. How? By:

In fact, with the right knowledge and focus, most Wholesale and Distribution SMEs can improve retention, order frequency, and order value, which compound to a significant increase in customer lifetime value (CLTV).

Did you know?

Increasing customer retention (just one element of CLTV) by just 5% can increase profits by an incredible 25-95%.

Source: Harvard Business Review

Keep reading to find out how easily you can increase your profits.

Boost profits by increasing the CLTV of your current customers

It’s time to unlock the profits you’ve been dreaming of without staying up all night worrying about how to attract more new customers. The secret is increasing the lifetime value of your existing customers.

Existing customers are more profitable

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Since you already have a relationship with your existing customers, the likelihood of making a sale with them is 60-70%, compared to only 5-20% with a new customer.

Sales are faster & easier

Return on investment is virtually instant

You’ve already put in the time and money to acquire your existing customers. Any new sales have a much higher profit margin because you’ve already covered those initial sales and marketing expenses. Plus, there’s no revenue delay as there might be while onboarding new customers.

Sales are higher value

Your customers already know and trust you. That means they’re more likely to make higher value orders: existing customers spend 31% more than new customers.

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Use the wealth of sales data you have to provide an excellent and personalised service so customers stay with you for longer

Encourage frequent repeat orders and proactively chase “missing” orders

Upsell and cross-sell additional products to increase average order value

So how do you increase CLTV?

Maximising CLTV also delivers customer acquisition success

It’s time to unlock the profits you’ve been dreaming of without staying up all night worrying about how to attract more new customers. The secret is increasing the lifetime value of your existing customers.

How does that work? It’s simple. In any business you can only spend a proportion of your average lifetime value in customer acquisition costs (CAC). This is often described as your CAC-to-CLTV ratio, but that’s just a fancy way of saying that the higher your CLTV, the more you can spend acquiring a new customer without losing money.

CLTV is the ultimate predictor of wholesale and distribution success

Take two similar businesses that compete with each other:

If Company A has an average lifetime value of $18,000 and Company B has an average lifetime value of only $12,000, then Company A will be making more profit in the short term.

But if it chooses to do so, Company A can also afford to spend much more acquiring new customers, and will therefore ultimately squeeze Company B out of the market.

In the end, maximising CLTV is the secret to success, both in maximising short-term profits from existing customers and in acquiring new customers in the longer-term.

By implementing processes and systems to maximise average CLTV first, you can then afford to spend more money on acquiring new customers, allowing you to beat your competitors and grow even faster.

Why a traditional CRM is not the answer

It’s one thing to say you need to increase your CLTV. It’s another to actually achieve it. And when teams are tasked with increasing sales and better serving their customers, they often think a CRM is the solution to their problems.

But not just any CRM will do.

Prospect: The only Stock-Aware CRM focused on increasing CLTV

Traditional CRMs are good at helping you qualify and close new leads, but they’re designed for exactly that: large, one-off opportunities that could take months to close. They’re not designed to help you develop long-term relationships, generate repeat orders, or maximise CLTV.

Enter Prospect, the only Stock-Aware CRM designed specifically for Wholesalers, Distributors, and Manufacturers that take repeat orders and want to maximise CLTV and increase profits. Prospect has all the features you need to manage your orders and customers in one place and unlock the value you’ve been missing:

Prospect analyses your customers by recency (how recently they ordered), frequency (how often they order), and monetary value (how much they spend) to define categories like Champions, At Risk, and Hibernators. This industry-specific analysis means your team can jump in at the right time to turn one-time transactional customers into long-term relational customers and advocates.

Recency, Frequency, and Monetary value (RFM) analysis

Did a customer place a smaller order than usual or forget to place an order on their regular day? Did they not receive a delivery due to some kind of error or suffer another service problem? Prospect notifies your team so they can sort out any issues and prevent customer churn.

Order Management

Use the insights you gain from Prospect to effortlessly increase the order value for each customer. Identify gaps and opportunities with built-in “Magic Matrix” upselling and cross-selling capabilities.

Order value and frequency management

Customer insights

With centralised, real-time data at your fingertips, you’ll be able to identify your most profitable customers and what they have in common. Use this knowledge in your marketing and sales strategies to identify your ICP (Ideal Customer Profile), allowing you to find and retain more loyal customers and power sustainable, repeatable, and predictable growth.

Comprehensive integrations

Prospect is completely integrated with your ERP or stock and inventory management system. View customers’ purchase history, find prices, check stock levels, send quotes, and place orders – all from the same intuitive platform so you don’t have to do the same tasks twice or constantly switch between systems.

8 Signs That a Stock-Aware CRM Can Help You Increase Profits

You’re a B2B Wholesaler, Distributor, or Manufacturer selling physical products.

You manage inventory and accounting with a system like QuickBooks, Xero, Cin7, DEAR Inventory, or Unleashed.

You have a team that sometimes struggles to manage your client list of 50+ businesses.

You find it difficult to keep track of individual customers’ order history, pricing, and past communications with you.

You spend too much time switching back and forth between your CRM and your inventory management system, often repeating tasks and searches.

If someone misses a regular order with you, you might not notice until it’s too late.

You’re forced to rely on outdated spreadsheet reports and manually sending quotes via email.

You’re unsure exactly who your best and worst customers are.

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Did you answer ‘yes’ to some or all of these statements?

Prospect, the #1 Stock-Aware CRM, might be the solution you need to boost your profits. Request a free demo today and find out how we can help your business grow.