Digital Transformation

Growing profits through focusing on the customers that matter

Oracle Netsuite

|

Promoted article

This is content produced by a partner of The Drum and promoted by The Drum. To find out more, visit our media solutions page media solutions page

June 20, 2019 | 5 min read

In business as in life, growing profits are a strong indicator of your organization's performance. And while there is a tendency to think of ‘growth’ as something that happens as a result of expansion and by reaching ever higher numbers of people in more places than ever before, this is not always the case. The reality is that no matter how many people you could reach, the proportion that will convert to become a paying consumer will always be smaller than overall reach, and the number of consumers who will pay repeatedly is smaller still.

That's why for many businesses looking to grow their profit margin, it makes more sense to channel that energy into their already existing customer base. By working to develop the relationship that has already been established between the brand and the consumer, businesses have the opportunity to deepen their relationship with customers and encourage brand loyalty. Focusing their efforts on this demographic will inform businesses on the needs and wants of their target market, ultimately leading to better customer retention. This in itself encourages a higher gross profit for the business, with a minimum effort made to attract new customers.

The latest marketing news and insights straight to your inbox.

Get the best of The Drum by choosing from a series of great email briefings, whether that’s daily news, weekly recaps or deep dives into media or creativity.

Sign up
Money

7 ways to increase your company profits

These recommendations are supported by insights from Oracle’s ‘Seven Ways to Grow Your Profits’ whitepaper; “Here’s the kicker: You’re 60-70% likely to sell to an existing customer, compared to the 5-20% likelihood of selling to a new prospect.” That change in focus has a positive knock-on effect on other aspects of the business since it costs up to five times as much to attract a new customer as to retain an existing one.

Moreover, at a time in which British businesses are buoyed up with confidence, according to the National Federation of Independent Business (NFIB), growth is on everyone’s minds. But growing profits requires a more sophisticated approach than a fire-and-forget approach that reaches people indiscriminately. Instead, according to the whitepaper, the companies that truly take advantage of those high levels of business confidence will be those that focus on those repeat consumers.

Ultimately, pleasing existing customers is dependent on the ability to minimize the hassle and pain they encounter in all aspects of their working lives. As the whitepaper explains: “For upselling and cross-selling to positively impact your firm’s bottom line, your account managers should be constantly communicating with customers and teasing out their unfulfilled needs.” Oracle gives the example of using regular communication to discover when a client is launching a new department or subsidiary, one that could benefit most from offering them a ‘one stop shop’ bundle of services and products. Effectively, it’s using the insight you have into an existing company to elide the pain points that prevent them from growing their own businesses.

Developing those regular touchpoints and selling more to your existing customers as a result is one single example of how to increase your business' profit margin, outlined in the Oracle whitepaper. The six other sections set out how businesses can best invest in strategies to maximise the value of their ongoing operations, from expanding into global markets to selling through an increasing number of channels.

Digital Transformation

Content created with:

More from Digital Transformation

View all

Trending

Industry insights

View all
Add your own content +