Our topic for newsletter and blogs this month is “predictable, reliable revenue sources.” This is especially important in uncertain economic times which, given the election year, we are in right now.
This month, we’ve covered the necessity of having and maintaining three consistent predictable, reliable sources of revenue. But what must a business do beyond that?
Nothing Stays the Same
You might have noticed what happens when you try to maintain a certain production level with no increase or decrease. Sooner or later—more likely sooner—it will start decreasing. Nothing stays the same for long. When viewed in this light, when we talk about having and maintaining at least three predictable, reliable revenue sources, the words “at least” take on an increased importance, don’t they?
The most successful organizations dedicate a part of their activity to obtaining new business. Many new customers may only be in it for a single product or service. You certainly don’t want to turn those away because revenue is revenue, no matter where it comes from.
However, the customers who become regular clients are worth their weight in gold. Those are the sources of reliable, predictable revenue that we’re talking about.
If you’ve read our book CLOSING is NOT your PROBLEM, then you know that you must approach every single prospect as if they are going to be a customer for life. No matter your approach, a certain percentage won’t be lifelong customers. On the other hand, a certain percentage will stick around for the long game. If you approach every prospect as if they will, then you’re sure to catch and close those who would tend to remain customers for life. And you might be surprised when some of those who only came by for a single purchase keep coming back.
More Than One…Always
In an earlier article this month, we discussed the fact that the fewer regular customers you have, the higher the risk. Some companies—and we provided some great examples in that article—build their entire business around a single revenue source. That’s the highest risk a company can have, for when that source disappears (and it’s a good idea to always say “when” not “if”), the company is likely to close its doors.
Two revenue sources lower the risk, for if you lose one, you still have the other. Three is obviously better, as you can still lose one and have two.
Best of all, though, is to consistently add new income sources. The more regular customers you can add and service, the better. That is why it should be a regular part of a company’s operation to constantly seek out new business.
Cost of New Versus Regular Business
It should be noted—and most companies are very aware—that adding a new customer is always more costly than maintaining an existing one. Besides being a regular revenue source, it costs less money to market and sell to that regular client. That is yet another reason it is so valuable.
The lesson to be learned is to constantly create new business, and you’ll never go wrong.
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