I wholeheartedly agree with the need to acquire new business in translation sales, but I see a lot of translation companies overlooking revenue growth opportunities within their existing client base. Relying too much on existing customers can lead to putting to many eggs into onto one (or a few) basket(s), there is a lot to be said for expanding and deepening your reach into your best, most profitable profitable or highest potential accounts.
1.More revenue more quickly at a lower cost – these statistics speak for themselves really. I have nothing more to add.
- Acquiring new customers is 6-7 times more expensive than retaining existing customers (Bain & Company)
- Repeat buyers spend 67% more on average than new customers (Bain & Company)
- You can close approximately 50% more business than new business with existing in the same amount of time (based on Accenture research that says that existing opportunities close 50% faster than new business in a 3-month period)
2. Many, many sources of revenue exist in larger accounts – Translation touches nearly every aspect of business communications. Depending on corporate structure and global footprint, nearly any department; business group, product group or business unit; subsidiary; division or partner is a potential customer. This fragmentation makes it our responsibility to uncover additional revenue opportunities. To do this we need to develop a deep understanding of our customer’s business so we know where to look for revenue opportunities and which of our services would interest them. Having been responsible for growing business with some of the largest companies in the world, I discovered a tremendous amount of untapped revenue in the obscurest of places within them. For example, buried within one product group of one company I uncovered an e-Learning project for internal employees that was worth over $200,000. In another instance an account manager and I made 10 new sales resulting from pro-actively leveraging our existing contacts within the customer. This both deepened and broadened our reach within the company and it was definitely worth our while!
3. Ring fence against the competition – I don’t need to say how competitive it is out there. My post entitled “Your Competitors are Calling Your Customers” highlights the fierce competitiveness that characterises translation sales. If you have an important customer and losing them would be dangerous for your company, then it is worth considering a growth strategy for this account. The broader and deeper your reach within an account, the more difficult it will be for a competitor to displace you. You will be important to too many people.
4. Increasing your survival rate in procurement exercises – Procurement departments and resource managers (in LSPs) are increasingly involved in the procurement of translation services. This means pricing pressures for sure, but also outright replacing you in a worst case scenario. However, if you have a very deep and broad relationship with your customer, it will be more difficult and risky for them to replace you. They will get pushback from the happy users of your services and potentially discover the law of unintended consequences of using a cheaper supplier. If you only have a tiny foothold in one department or perhaps with only a couple of different buyers, there is significantly less risk in replacing you, thereby making it easier to do so. Best to secure your position with the companies that matter the most to you in terms of profitability, potential, overall revenue or any combination of these.
5. Surviving mergers and acquisitions – all industries are experiencing these. Just as a broad and deep reach will help you survive procurement exercises, it will also help you come through a merger/acquisition unscathed (or perhaps with even more business).
Devoting a lot of time and resources to existing accounts comes with risk, so it’s important to choose targets for growth wisely. Chosen wisely, the payoff can be great: a more secure relationship, more revenue, faster revenue growth and preventing your competition or procurement from jeopardising an important source of revenue.
IMPORTANT – All of this holds true for LSP-to-LSP sales: you may have a get lots of work from one or two project managers, but the other 20 give you none. Why? Please re-read the above in this context.
To learn more about how to grow your accounts, you may want to register for my Account Growth Strategies course offered online starting in January. If you’d like more details, please get in touch firstname.lastname@example.org.