If you’ve ever investigated the principles behind customer retention strategy, then you may be familiar with the following time-honored statistic: 80% of your company’s future revenue will come from just 20% of your existing customers. Additional research also suggests that repeat customers are likely to spend 67% more than new customers. With this information in mind, product distributors in emerging markets are investing more in fostering ongoing relationships with their current customer base. Continue reading to discover how distributors can help customers with existing product loans acquire new-to-them product upgrades that meet their evolving needs and budgets.
Finding Opportunities to Extend the Sales Cycle With Existing Customers
Product distributors selling to low income consumers in underserved markets may find it challenging to sell more to their existing customer base because they lack the tools to efficiently implement a repeat sales strategy. Consequently, consumers in these marketplaces may not be aware of potential opportunities to acquire additional products or product addons from distributors that could more effectively suit their needs. Distributors can, therefore, seize on the opportunity to implement a solution that conveniently encourages additional purchases from their existing customers. Read more below to discover how this outcome can be achieved with the right sales model and payment options.
An Innovative Sales Model: Mid-Term Product Upgrades
The Angaza platform provides product distributors with the ability to initiate and track multiple new product loans, in addition to pre-existing partially paid product loans, in one convenient account structure.
What it is: Mid-term Product Upgrades simply means that a customer with an existing, partially-paid product loan can qualify for the purchase of a new-to-them product or add-on. The existing customer is evaluated for the new product purchase using the same prospect approval process they underwent for the original loan. The price of the new product/add-on, along with the outstanding balance from the original loan, are then transferred to a new account that reflects all products and payment terms attributed to the customer in one place.
Why it benefits both the customer and the distributor: Mid-Term Product Upgrades are convenient for the customer because the transfer of all existing product loans to a single new account ensures that customers only need to go through one payment process for multiple products. In turn, payment tracking and collection for multiple products is also simplified for the distribution business, as customer loan information and history can be consolidated and monitored in one location.
Some reasons this sales model might be right for you:
- You have several customers whose partially-paid loans are in good standing. These customers are candidates for additional purchases of products related to those in their existing loan.
- You are looking for opportunities to sell more products and add-ons from your product portfolio to reliable, low-risk customers.
- You are looking for strategic ways to generate more revenue with your best customers through repeat sales that extend the lease cycle.
Use Case Examples:
- Three months ago, a customer initiated a loan for a solar home system (SHS) capable of powering a range of appliances and electronic devices. The customer has been consistently making payments on the SHS loan and now wishes to purchase a fan and a small laptop. The remaining balance on the partially-paid loan for the SHS, and the new balance owed for the fan and laptop, are combined into a new loan and transferred to a new account that reflects all products and payment terms currently attributed to the customer.
- Several months ago, a customer initiated a loan for an SHS and three lamps. The warranty on these products has since expired and the customer wishes to replace the bulbs on the lamps. The remaining balance on the partially-paid loan for the SHS and lamps, and the new balance owed for the replacement bulbs, are combined into a new loan and transferred to a new account that reflects all products and payment terms currently attributed to the customer.
If you’re interested in learning more about all of the upgrade options Angaza offers, read more here.
Encouraging Repeat Business With A Sales Strategy That Meets Customer Needs
A customer is more likely to purchase multiple products from the same distribution business when the process of doing so is straightforward and convenient. When a customer becomes aware that their existing product loan could easily qualify them to purchase additional products under the same incremental payment structure they already know and trust, this can foster a sense of loyalty. No added friction of managing separate payments across multiple products is also a plus.
It’s important to remember that repeat business often results from a strategic approach to cultivating lasting customer relationships. Customers who are able to reliably access convenient and affordable purchase options to meet their evolving needs are also more likely to recommend a business to their network. With the right tools and sales models, product distributors in emerging markets can level up from pursuing one-time sales transactions by turning their business into a repeat sales engine geared toward sustainable growth.
To learn more about all of the flexible product upgrade options Angaza enables, including the ability to conduct product upgrades with device trade-ins, contact your Angaza Customer Success Manager or get in touch with us via our contact page.