Why Renewal Business Is Better Than New Business by InsideView

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Why Renewal Business Is Better Than New Business

Sales generation is the lifeline of any business, whether it is through new customers or renewal business. A overemphasis on getting new customers can sometimes come at the expense of losing existing customers, and new customers cost more than renew customers. So what are some of the arguments in support of building out a strong relationship management strategy? Some of the benefits of business renewal include:
Increased Sales

Renewal business leads to increased sales productivity. Loyal customers tend to make more sales than new customers. One reason for this is that they feel more confident doing business with you, and the other reason is that they make numerous small purchases that add up to a good deal of business.
Reduced Marketing Expenses
You should continue gathering customer intelligence and engaging in advertisement campaigns even with an impressive renewal rate. However, the cost of these two marketing tactics is significantly lower when you have a relationship with a client than when your client has never heard of you because these are the only two marketing expenses you need to cover to win additional business from existing accounts. It's amazing how much you can save when you do not need to introduce yourself to existing clients since they are already aware of your offers.
Increased Referral Business

When you have worked with a customer for a long time, they become more loyal and trusting than they are when they first interact with your brand. As such, they are more likely to refer their associates to you when you've built a relationship of trust. This means having renewal business is also a way of getting new customers by way of referrals.

Other advantages of renewal business include:

    Improved cash flow
    Reduced transaction costs
    Reduced incidences of bad debts
    Decreased customer administration spending

So, as a B2B organization, how can you get more renewal businesses?
Have a Well Maintained Customer Database

There is no way you can keep track of your customers if you don?t understand them, and you will only understand your customers if you pay attention to them. Therefore, you need to build a database on your existing customers that includes all the relevant facts. Plan your database well, update it regularly, and refer to it when need arises.
Offer Value Instead of Just Selling

You need to upgrade your relationship management plans so that you offer much more than your services or products to your clients. People today are increasingly wary of being sold to. Therefore, you should add value to your sales pitch by offering something of value to your customers on a regular basis.

Other things you can do to generate renewal business include:

    Cultivating good relationships with first-time clients
    Delivering high-quality goods/services
    Keeping in touch with all clients
    Giving clients free gifts/offers
    Being truthful with all customers

As you can see from the above discussions, there are lots of benefits to having renewal business. However, you should not forget to cultivate new relationships since it is the first-time clients that turn into repeat customers.

Renewal Business Resources:

http://fatmargins.com/articles-2/the-hidden-benefits-of-repeat-business/

http://www.guardian.co.uk/small-business-network/2012/jun/28/repeat-business-struggle-expand

http://usefulsocialmedia.com/blog/internal-strategy/how-b2b-companies-can-build-a-truly-social-business/

http://www.pinebeltwebdesign.com/benefits-of-repeat-customers-in-the-world-of-freelancing

http://chiefmarketer.com/b2b/5-strategies-better-b2b-ecommerce