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Winning Business and Loyal Clients in Accounts Receivable Factoring

How to Sell More to Your Existing Clients

Advice Desk

In this series of articles aimed at assisting you in winning business and loyal clients, Mark Mandula, Principal, Vice President, United Capital Funding, offers his guidance from the viewpoint of an experienced business finance and factoring professional based in the U.S.

Our firm, United Capital Funding Corp. provides working capital and professional Accounts Receivable factoring services to entrepreneurial firms on a national basis. I am often asked by our clients and or prospective clients how they can significantly increase their sales to current or potential clients.

While this sounds like an easy question to answer, it is very difficult to provide a standard response to our invoice factoring clients in the manufacturing, distribution, wholesale industries.

It seems that the correct response is for our financial services clients to implement a strategy that focuses on increasing the average sale to existing clients, as we do with own factoring clients; while at the same time constantly seeking ways to attract and retain new clients and customers. If this assumption is valid, then what marketing strategies can we use to accomplish both of these goals?

Fundamental Marketing Strategies

If we step back and reread for a minute our college Marketing textbooks, we will recall that there are really only 8 basic ways to market a business. Relative to financial services, we offer invoice factoring, and we apply many of these strategies to our Accounts Receivable clients.

What then are the tools you can use in the expansion of your business? I will review 5 of the 8 fundamental marketing strategies that you can use to increase the revenue you generate from your existing clients, and assist in building new client revenue channels.

Acquire New Clients

This is the first and most obvious strategy we apply in seeking accounts receivables management clients. In order to do this successfully, you need to target your product or services to a specific segment of prospects that need your services or products. This is accomplished by performing niche prospecting, identifying new segments with the goal to acquire new, high value clients.

Increase the existing loyalty and reduce the “churn” of your current clients. Easier said than done. The most successful factoring clients we serve have developed loyalty campaigns to help the average duration of the client relationship increase over time. At the same time, it's important to develop programs to show the unprofitable clients the exit door.

This requires, of course, accurate revenue/cost data on an internal basis to determine which clients are in the profit or loss category. Finally, some clients use data to prioritize services to the most profitable clients in an attempt to keep the best clients happy.

Upsell the Services or Products Offered

The smart businessperson is always looking for ways to sell more to their current client. I am sure we have all been in a fast food restaurant when we are asked “Do you want fries with that?”

When we apply this strategy to our accounts receivables factoring services, we know the signals from current clients that they are ready for a change, and we identify the “next optimal product or service” to up sell to a client. One idea would be to use event marketing to identify client needs and their real desire to purchase them in the near term.

Increase Usage of Existing Products or Services

This is an excellent way to increase your bottom line profitability, without adding significant additional overhead or cost. Focus on targeting the products or services you sell to your clients on a specific segment basis.

Communicate to your clients new reasons for using your product or service by focusing your message on the benefits they will receive with more frequent usage.

Also, if possible, try to match offers to increase usage with the Win back clients. In our specialized financial services firm, I am convinced that the most profitable funding and working capital clients we have are already “here.”

The key to long term profitability in any business is to serve and retain clients for as long as possible; this allows you/us to amortize that cost of capture over as long a time horizon as possible.

Ideas to help you implement this strategy include making offers to profitable clients after they leave; let unprofitable clients go to your competitors, and prove to your clients that they are valuable [through excellent service and attention to detail] and that you are responsive to their needs. This requires an enterprise wide commitment to serve, and not just lip service client life cycle and life stage.

Conclusion

The key to long-term financial success for any business is the development and retention on clients that are truly happy and served well. In this article, I hope that a quick review of 5 fundamental marketing strategies will assist you in the growth and success of your entrepreneurial enterprise.

Feel free to contact me with questions, observations, comments or if you need any additional information on the discussed topics. I can be reached via email at mark@ucfunding.com

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Phone: 1-877-894-8232
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