How to Increase Your Revenue From Existing Customers
Why It's Important
Increasing revenue from existing clients is the quickest way to increase your EBITDA. The higher your EBITDA, the higher your business valuation. Your existing installed accounts act as the base to leverage your revenue engine to outpace the market.
3 Ways to Grow Existing Accounts
Three things you can put in place to secure and grow the existing installed accounts are:
- Measure your customer churn rate – It’s one of the most critical metrics for a growing business to evaluate. While it is not the happiest measure, it’s a number that can give your company the hard truth about its customer retention. Put plans in place to reduce churn. If there are contracts where your services are discounted year after year, look for ways to gain efficiency in the services you deliver or create additional opportunities to replace the churn and grow.
- Consistently improve your product/service quality – Have your product/service wow customers and make them raving fans.
- Increase customer satisfaction – through both objective and subjective measurements. This area is expanded on below in terms of the Stoplight Process.
The Stoplight Process
It’s easy to measure the objective Service Level Agreement (SLA) and key performance indicators (KPI) through the stoplight process, you either make them or miss them. The subjective measurements are the things the numbers do not tell you. These are critically important to know.
An example is a customer that does, say, $3M of services revenue and another $3M of product revenue on an annual basis. Let’s say the customer awarded your $6M book of business to another supplier through an RFP process. Your SLA performance was always at 95 % or better!
How did you lose this customer? During the debrief about why you lost the business, the customer said they didn’t like working with the people on the ground servicing the account. This example clearly illustrates how critical it is to know the soft measurements so you can respond and create a happier customer vs. not knowing and eventually losing the business. This may all seem complicated, but with The ExitMaximizer Framework, you can easily manage this through our Stoplight Process .
If you would like more tips on how to setup a proper framework for your business, you can download my free MSP Owners Guide to Increasing Growth & Business Value
If you have any questions about implementing this strategy in your specific business, feel free to get in touch by booking a short 15 minute call with me on my calendar below.