Merchant businesses often have significant numbers of trade accounts, but the average spend and number of lines per ticket can often be very low. Raising these values is key to boosting business growth and improving your bottom line. Here, based on years of experience helping our clients, we’ve identified the key areas merchants should focus on to increase existing customer revenues.
Understand your customers
Firstly, you should establish and segment who your customers are and what they could be buying. Understanding your customers can often be more difficult than it sounds, especially when you’re dealing with customers who may be visiting the trade counter, calling orders in by phone or placing orders online.
In the brief time that your team is interacting with your customers, you may be able to see what they’re ordering, but fully understanding exactly what they actually do for their clients is often less clear.
The quickest and simplest way to establish who your customers really are is to decide how you want to group them (ie, by segment such as bricklayers, plumbers, etc) and then, with the branch team, walk through each account and put them into a customer segment based on what they know.
For each of these segments, then summarise the products that they could be buying. For bricklayers, for example, potential products would include blocks, bricks, cement ,wind-posts, ties, lintels and masonry support. So, for every customer you have grouped as a bricklayer, look at their ledger to see what they actually purchased, and then compare that with the product summary of what they could be buying based on their customer type – that way, you’ll see what products they do not currently buy from you, and can then work to encourage those additional sales of products they are buying elsewhere.
Understand, train and mentor your team
People buy from people, so understanding each member of your team, their product knowledge and how they interact with your customers is key to both growing your revenues and being able to develop your team and offer them a long-term career.
By spending time with your team, whether that’s on the trade counter or on site with your customers, you will be able to see very quickly how they interact and the product areas or sales techniques where they may benefit from additional training.
Most importantly, it will help you identify how your experience can help them grow and, with the customer in front of you, allow you to begin the training and mentoring process. This will not only help win their hearts and minds and create a more cohesive team, but may also show them a different or better way of interacting with customers, which they can use going forward.
Talk to your customers and ask what they are doing
Each and every customer is important to your business, and you rightly want to give them the very best product choice, stock and service that you can. But when you’re working in a busy trade counter or branch, there is often only time to take your customer’s order and little else.
Wherever possible, take the opportunity to talk to them, and encourage your colleagues to do the same, whether that’s on site, at the trade counter or in the yard. By better understanding the job they are working on and the challenges it is posing, you have the opportunity to help them with your own product knowledge and establish your business as a merchant that knows its products inside out.
It can also help you understand why they are choosing not to buy certain products from you, even though they are coming to you for others. In most cases, it will simply be because they ‘did not know you sold that’ or they ‘did not see you as a specialist in that field’. Talking to your customers helps them better understand what you can offer, and gives you the opportunity to ask to quote for the next job and hopefully increase your bottom line.
When talking to your customers, building a relationship and earning their trust and respect is more important than almost anything else you can do. This is achieved by doing what you say, at the price you said you would do it, and when you said you would do it. All customer-facing members of the team need to know this, and need to exemplify the best possible customer service at all times.
Record and measure what happens
Whether you use your ERP (trading system) or a specific CRM (such as sales-I or Salesforce), recording your interactions with your customers is key, not only to make sure you deliver the right order at the right time and price, but also to track your pipeline of confirmed or pending orders.
Tracking your progress in this way will allow you to monitor changes in the business day by day and share this with the team so everyone can agree where you need to focus your time.
Don’t forget nil and low spending accounts.
Focusing on active accounts (ie, those that are currently spending) will allow you to realise the biggest benefit, but can often only be 40-50% of your total customer accounts.
For the remaining, non-active accounts, whether they be nil or low spend, create a targeted marketing campaign that focuses on them and encourages them to come back to you as an active customer, looking at those who were low spending or who haven’t spent recently first.
As a merchant, looking at each of these areas will help you to realise the opportunities to grow revenue from your existing customers. What’s great is that each customer who calls, comes into the trade counter, or places an order online, is a whole new opportunity for growth.
If you would like to talk to us, informally and in confidence, to understand how we can help you and develop your business, please contact info@moorgatemanagement.com or call Chris Maityard on 07767 291379.