Growth Focus: Question – Do all your customers know every product and service that you sell? Posted on October 9, 2018
The matrix asks 4 key questions, which are essential to knowing the answer to in order to grow your business.
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When a business is faced with challenges of growing and determining where to focus its 2 key resources – time and money – sometimes they don’t know where to start or where to turn to.
The question to ask is, “what is it easier to sell?”
Is it….
An existing product, to an existing customer?
A new product to an existing customer?
An existing product to a new customer? or
A new product to a new customer?
Working through the Ansoff principle, the matrix is shown below – with a 1 being the easiest to sell and a 4 being the most difficult.
See fig 1.0 below
The reason behind it is very simple…
1) An EXISTING PRODUCT to an EXISTING CUSTOMER is the easiest for 2 reasons:
a) you know your products, they are established and are being sold already;
b) you have established relationships with existing customers who know, like and trust you.
2) The next easiest to sell is a NEW PRODUCT to and EXISTING CUSTOMER. Again, your customers know, like and trust you, so the next best thing to do is let them know all your products and services and see if they need those as well – otherwise known as a cross-sell.
3) The third easiest is an EXISTING PRODUCT to a NEW CUSTOMER. This is number 3 because the effort expended to get a new customer in terms of money and time can be up to 6 times more costly than the options in 1 and 2.
4) Finally a NEW PRODUCT to a NEW CUSTOMER. This is the hardest to sell because new relationships need to be developed and new products need to built and tested.
The moral of the principle is simple: work in quadrants 1 and 2 for as long as you can as it is cheaper to do so, and more often than not, your EXISTING customer base will not KNOW all the products you sell.
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