Many businesses rely on multiple, single customer transactions. They aim for repeat business by ensuring customers receive a positive experience or by creating a 'need' for their products or service. Yet sometimes the customer will never return, purely because they have no reason to purchase the same product or service again.
Telecoms is different. One sale results in 12, 24 or 36 months worth of residual, recurring income. That's one of the many reasons why adding Telecoms to your product portfolio can be so powerful. Here, then, are 5 ways how Telecoms can supercharge your business forever and take it to the next level!
1. Diversification & Cross-Selling
Let's say you're running an IT business. Your customers may have come to you when they moved office, you provided the service and they were happy. A year down the line, they contact you for a few tweaks as they have hired more staff. But that's all the repeat revenue you will generate from them as the need for your business isn't there all the time. Now let's say that customer, when they moved office, was also looking for a new Telecoms supplier - see where I'm going with this? By diversifying your business and cross-selling a complimentary product, you are able to satisfy both of your customer's requirements. Double whammy for you and a twice as satisfied customer. This enables you to increase the revenue from your existing customers and target new customers that were previously unattainable.
2. An Additional Revenue Stream
Using the same example as above, before selling Telecoms, the IT Company would get the initial income from the IT services and that would be it. After adding Telecoms to their business, they'd also be able to take a monthly revenue from the Telecoms services provided, for 12, 24 or even up to 36 months! Think of the one off sales as an upfront, cash generating activity, and the monthly telecoms revenue as the steady income needed to drive growth.
3. More Products Means Stickier Customers!
Beyond the simple convenience of having a single product from a trusted supplier, customers become even more loyal when they start to integrate a couple of services from one provider. We all know how time-consuming it can be to change supplier, so once your customers have a few products from your portfolio and have deployed to give them the maximum benefit, they will be unlikely to switch even part of the services to a competitor just to save a few quid. Rather than buying once without returning, these 'subscriber' customers stick around (hopefully year after year - customer service depending), which is why these customers drive up the value of your company so dramatically. See below.
4. Build a Sellable Asset & Increase the Value of Your Company
Building a business with more recurring revenue, as opposed to one with one-off revenue, has almost a direct correlation to an improvement in business valuation, should you eventually want to exit the business. You can see it in virtually every industry that exists and it's not hard to understand why either. An acquirer would not be as interested in a business without a guaranteed return on their investment. You can't guarantee that customers will come walking in through your shop doors every day, so will therefore have to calculate the value of the business based on historical track record and a multiple of the revenue it has generated previously. Businesses with a guaranteed customer base and revenue on 12, 24, and 36-month contracts will be more attractive, and therefore valuable. The valuation is based on the visibility of future revenues and therefore 'quality of earnings', which takes the type of customer, length of customer relationships and contracts (and the risk that they might be disrupted) into consideration. Longer contracts and better quality customers will generate a higher business valuation.
5. More Marketing Opportunities
When marketing your business, there are only so many quality channels you can tap into to effectively target your niche. To reach your full market capacity, you would have to engage in more general marketing tactics, which can be costly and inefficient. By expanding your products, you effectively expand your target market and therefore your reach somewhat too. Referring back to the IT business at the start of this article, even in basic marketing terms, it could list its business under the 'IT Consultants' section of the local business directory. There would be no point them advertising under the 'Telecoms Consultant' section if they were not able to provide that product. It would be a waste of money and a disappointment for customers that call looking for a product you don't sell. However, by being able to legitimately advertise in two places, that's twice the audience for the same business.
In summary, it doesn't matter which product 'hooked' your customer, once they are a customer of yours (even for something small), you should then have their contact information to cross-sell to them to create stickier, more valuable customers. This makes your business more attractive to potential investors and buyers and, in turn, more valuable.
Click here to find out more about how Telcoinabox can help you expand your portfolio and grow your business with Telecoms.