NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

THE PRINCIPAL salesman of any enterprise is the business owner. This is simply the hard lesson that many small and micro enterprise (SME) owners learn over time. If you are not closing the sales, then you will not meet the sales targets through the efforts of your sales team only.

The cost of acquiring a customer is always high. It is estimated that the cost of acquiring a new customer is six to seven times more than keeping an existing client. Some examples of the costs associated with acquiring a new customer include promotions, advertising, personal selling, building trust, time and money spent explaining the business or product to new customers, price sensitivity, and setting up a new account.

For an existing customer, you essentially get repeat business. Existing customers are also less sensitive to price than new customers and therefore are more likely to be a source of future referrals. If there was ever a strong case for investing in and financing customer service, then this is it.

However, the challenge today, for most SMEs is that they have their prospects and customer data in the business owner’s personal phone books or those of their sales team. Other contacts may be distributed across your emails or a set of spreadsheets in the organisation.