7 min to read
5 ways to increase revenue from your existing customers: D2C Brands
Simple yet actionable tips to get your customers to refer you.
Many businesses tend to overlook is the value that existing customers can drive in. Unlike new customers, you have a forged relationship with the existing customers. They like your brand and your product and that just makes it easier to sell to them. An existing customer can give you consistent profits with very little efforts if you play your cards right.
How impactful is putting effort into existing customers? Here are some stats…
- Acquiring a new customer can cost 5x times more than retaining an existing customer
- Increasing customer retention by 5% can increase profits from 25-95%
I will be going through 5 of such techniques to add to your arsenal. I will start with the very subtle ones
Upselling
Upselling is a practice widely used in many industries with the intention to get your customer pay for a relatively higher product. You can think of upselling as an opportunity to provide extra value to the customer for the product of their liking. A common practice is to show side by side comparison of the regular product/service vs all glorious high-end product, which might get the customer to FOMO.
This is what your favorite airline does when you book flights! Let’s say you’re going to fly 5 hours and you plan to choose economy which just gets you a seat allocated by an algorithm with one cabin luggage, whereas the website says that you can upgrade to economy plus which will cost you another Rs 2500. Now the economy plus has options for seats with extra legroom or window to choose from, 2 cabin luggage and complimentary snacks. Upselling make these extra perks feel a necessity rather than add-ons. I have definitely been tempted to get the extra leg space :P.
Let’s try to upsell smaller prodcuts like Shirts!
| Quality | Feature Set | Product Features | Price |
|---|---|---|---|
| Basic | Minimum set of needs | Shirt with fixed sizes and solid colors | Rs 700 |
| High-End | High end give them that one very important feature | Shirt with a breathable material and is crease proof | Rs 1000 |
If your customer pauses to read this, you already 70% done.
Cross Selling
Have you ever wondered why Apple customers always end up buying more that they initially plan? Well, that’s the beauty of cross selling, and Apple have mastered the art of it.
What exactly is cross selling?
Cross selling simply put is to complementary offer services or products to satisfy the needs that are unfulfilled the original item.
When I think of my personal experience with Apple to buy an iPad. This how my journey looks like while checking out the iPad. I select the color of my iPad, memory for my iPad and wait what! I can also get Apple Pencil and Smart Keyboard for a bundle at 20% off. Well played Apple, I did end up with the bundle :)
Hmm, but you are not Apple and you don’t necessarily sell consumer tech. It still is easily transferable. We can try it with something as coffee. What can you possibly cross-sell with it!?
Things I can cross sell by selling coffee
- Flavor syrups
- Non-Dairy Milk/Barsita Milk
- Special Coffee Mug
- French Press/Pour Over Apparatus
- Cookies/Pasteries
Well the list can go on, but the power of cross selling is evident.
Upselling and Cross Selling are techniques you can use when the consumer is buying or checking out. I will now dive into steps where you can be more proactive ways to generate revenue.
Referral Marketing
Customers are you brand ambassadors and there is nothing better than you own customers marketing your products. With the rise of social media, the word of mouth has global voice and a substantial impact. You start by incentivizing your customers (let’s say give them a discount coupon) for every purchase through the referral and give the customer a small discount for using the link. Not only you get new high-quality leads generated by trusted customers but also compel the existing customer to use the discount coupon to buy your products.
Tesla have had one of the most successful referral marketing campaign. Automobile industry in one of the most difficult to get into, with high upfront capital and the loyalty of customer for exsiting brands. Tesla offered $1000 for every referral a user made, with special rewards at each milestone like an interior upgrade or special products unavailable to public (it makes you feel special). Even if we take the lowest rewards of $1000 per referral with a base cost of $32,000 of the cheapest model it is a 16x ROI!
Referral marketing is known to generate high ROI and high quality leads
Loyalty Program
Reach 150 stars and get a free coffee! If you are a coffee enthusiast, you know what’s going on. This is the Starbucks rewards app! Starbucks maybe a global brand but to me one of the best things is you get the same consistently good coffee anywhere go and Starbucks have made sure to leverage this. Starbucks provides rewards (stars) to any customer who purchase their coffee through their app and hold special events to earn extra stars such as buying cold coffee for 3 consecutive days (60 stars). You have to buy 5-8 coffees easily to get a free one :/
The incentive is much smaller than the easy 6-10x ROI. Depending on the product you can structure your loyalty program to get users make repeat purchases.
I don’t have the scale to build an app!
You can just have people register on email with your brand for the loyalty program (can give an instant discount for them to join the program). On doing so, just give them a coupon of discount or a free/exclusive item for a future purchase. Inform your users about the rewards available to them like early access to exclusive products, added discount on a new purchase etc.
Community Building
People love sharing stories, they like talking about their experiences and the community is an amazing place to discuss about the products they love. Communities promote loyalty! Sharing mission statements and goals that resonate with your customer-base get people excited not just about the product but also your brand.This is an indirect way of having higher revenue potential from your customers becuase of lower churn/turnover. But communities are not only for feedbacks, discussing issues, goals but also a place to showcase the potential of your products.
I am going to geek out a bit, Adafruit is hands on the best company at generating revenue from user communities. Ok so for anyone who dont know what Adafruit is, it company that build electronic boards for people to build DIY projects. The community definitely get crazy when doing so, you have people making a Microsoft Teams Mute Button (which basically is a huge push button to mute yourself on teams) and more cool projects. Now this excites the customers to try on new projects and the Adafruit team give them components that you can add to the cart to build the project. It is that simple! make something cool :sunglasses:, show it off and the customers how they can do it.
There is an untapped potential for D2C brands to increase revenue from their existing customers.
Try out the above suggestions, and you will defnitely be able to see revenue per customer rise! If you want me to write more about any of the above techniques or just D2C marketing in general you can hit me up on my dhruv@creto.club or follow us on LinkedIn or Twitter to get the latest in marketing for consumer brands!
Stay safe :v:
