Optimize Your Customer Base to Increase Revenue

In last month’s post, Don’t Forget to Sell to Your Existing Client Base, we discussed the importance of including existing answering service clients when it comes to selling. When you incorporate your client base into the sales mix, it takes pressure off new clients as the sole means for revenue growth. Another area answering services often overlook is reviewing the rates existing clients pay. Some clients remain on service for years but never receive a rate increase or pricing review. Other times the rates they pay become obsolete. Perhaps you eliminated their service plan in favor of a new, more profitable alternative. Here are areas to consider in optimizing your client revenue: Base Rate: Over time an answering service’s base rates go up. It’s a given; costs increase. Yet seldom do answering services apply these increases to existing clients. They only charge new clients the new, higher rates. After this happens a couple of times, long time clients can end up paying a much lower base rate than the newest clients pay. But by not increasing everyone’s base rates, you lose revenue you deserve. Plus you depend on new clients to make up the difference. Usage Fees: In a similar way you also increase your usage fees, be it unit or minute charges. A nickel one year and a dime the next. Before you know it, your long time clients pay a fraction of the usage as a new one. Again, the new clients subsidize the older ones. Service Options: Sometimes you provide services for free. This may be because there was once no way to track usage and charge for it. Or maybe your competitors didn’t charge for a particular service, so you felt you couldn’t. Whatever the cause, those reasons no longer apply, yet the clients continue to receive those services for free, while other people pay for them. This is another source of lost revenue. Free Services: The opposite of formerly free services that you now bill for, is services that you once billed but no longer do. Often this occurs after adding new software. To cover the cost of it, you charge each client that uses it a small monthly fee. But now that service is expected and no new clients pay an additional fee for it, but the older ones do. It’s hard to remove this charge, but it’s the right thing to do. While some answering services apply new rates to all clients, both new and existing, too many do not. Worried about upsetting a long time client, answering services are afraid to risk losing them over a price increase. If this continues over many years, the long-term client will actually become an unprofitable one. Don’t let this happen. And if it has happened, take steps to correct it. You may not be able to make all the needed adjustments right away, but start moving these undercharged (and a few overcharged) clients towards the rates everyone else pays. Do this methodically and with intention. Eventually you will optimize your entire client base—and your bottom line will thank you. Janet Livingston is the president of Call Center Sales Pro, a premier sales and marketing service provider for the call center and telephone answering service industry. Contact Janet at contactus@callcenter-salespro.com or 800-901-7706.  Peter Lyle DeHaan is a freelance writer from Southwest Michigan.