Bringing in new customers is a top priority for many companies. So is equipment dealers. Yet it is actually advisable to put more time and energy into retaining customers rather than attracting new ones.
Better chance of a sales deal with an existing customer than with a new customer
In equipment dealer sales processes, competition is often fierce. The complete picture must be right; the equipment must meet the requirements and wishes, the price must be right and the service, warranty and conditions must be satisfactory. With existing customers this is different. They are familiar with your organization, products, people and capabilities. If they are satisfied with the level of service you provide, the likelihood that they will choose your organization for a follow-up project is considerable. So as an equipment dealer, invest a lot of time in customer satisfaction and customer relations. It increases the chances of a sales deal on a new project.
Acquisition costs are much higher than retention costs
In generating new business, you put a lot of time and resources into appointments, meetings, presentations, demonstrations and negotiations to convince a company to choose you. These acquisition costs can be enormous. The many non-declarable hours that your (often important) employees put into preparation, research, travel, meetings and follow-up can be quite expensive. While the cost of customer retention is much lower. After all, the customer already knows you well and largely knows where your qualities lie. When an existing customer has a new need, coordination with you is necessary, but these retention costs are significantly lower than the acquisition costs for a prospect.
"Trust is central to equipment dealers. And trust is created by keeping appointments, keeping promises and delivering quality."
Satisfied customers bring new customers
Satisfied customers are the best possible ambassadors for your organization. Investing heavily in marketing and sales can be profitable, but a more simple and cheaper way is to pay careful attention to existing customers. Make sure they are satisfied, or better yet, enthusiastic. This leads to them recommending your organization to others. And a positive message from a colleague or competitor is seen as many times more reliable than the texts from your own marketing department.
Customer retention allows you to build customer relationships
Trust is central to equipment dealers. And trust is created by keeping appointments, keeping promises and delivering quality. By being a reliable and strong partner for your customer over the long term, you build a valuable relationship. And that is crucial as an equipment dealer. After all, it's always people who make business decisions. Your product or service can be so strong, but it is people's emotions and instincts that are the deciding factor in sales processes.
You are not faced with the choice of bringing in new business or retaining customers. Divide your time and energy well between both. And for many equipment dealers, this means putting more focus on customer retention, because it often gets less attention than acquiring new customers.
