Q: We are a company with a limited budget. For our customer acquisition strategy, how can we determine where to spend our dollars?
A: This is a great question and one that is often top of mind in my conversations with small-business owners. So, let’s get to the point. How does a company generate net new business efficiently? I’d say that the core answer lies in three areas:
- Nowadays digital marketing needs to be in the mix, including highly targeted search engine optimization (SEO) and search engine marketing (SEM).
- Utilize happy customers as an extended salesforce through references, online reviews and word of mouth -- including social marketing.
- Fully capitalize on your established customer base by cross selling and upselling to existing customers.
The digital marketing solutions available to small businesses today provide extremely granular targeting options and a wealth of information to help determine return on investment (ROI). You can also easily scale your spend up or down as needed, which makes advertising with search engine providers a great option for marketing on a budget.
For example, Palmetto Technology Group (PTG), a South Carolina-based company that offers technology services and expertise to businesses, has one of the most impressive strategies for cost-effective SEO/SEM I’ve seen so far. PTG’s CEO, Reed Wilson, told me that of all its marketing initiatives, SEO has yielded not only the greatest acquisitions, but also has the highest ROI as well. The company attributes its success to building a foundation of strong keyword research, valuing quality over quantity when it comes to traffic and focusing tightly on a few phrases that perform well instead of trying to be everything to everyone. In addition, PTG continuously optimizes its campaigns and makes sure to use exact keywords in high-visibility places on its website, so visitors know they’re where they should be once they arrive.
While using the right digital marketing channels to reach new customers is important, you’ll notice that the other two methods I referenced both focus on existing customers. This is because there is no better form of effective marketing than your happy customers and because driving organic growth within your customer base tends to be easier than expanding it. Of course, the ability to deliver great products or services and an excellent customer experience are a requirement for both, but if your existing customers aren’t happy then you have more immediate challenges to address before acquiring new ones.
A 2014 study from Small Business Trends found that 85 percent of SMBs get new business from word of mouth, by far the largest source of leads (online search was second at 59 percent). This underscores the power of using your customers as an extended sales force. Not only can they reach a far larger group of prospective customers than you can alone, but there is a level of trust inherent to word-of-mouth referrals that nothing else can match.
There are a number of ways you can encourage customers to sell for you. Some are overt, like asking happy customers to review your business online, soliciting testimonials or providing discounts or benefits tied to referrals. Others are more indirect, like increasing the frequency and quality of your communication with customers and stressing the importance of customer referrals to your sales staff.
Investing in technology like a customer relationship management (CRM) solution can also help you have more meaningful customer engagements when and where it matters most. CRM can help businesses strengthen their current customer relationships and drive new sales, with insights on everything from customer background and sales opportunities, to leads and account activity -- all accessible in one place via the cloud.
One of my favorite case studies of CRM’s effectiveness is one of our small-business customers, Core Cost Management (CCM). CCM is a five-person U.K. telecoms services and consulting company whose sales people were getting frustrated at having to switch between multiple tools and applications to get the data and connections they needed in order to close deals. So CCM headed into the cloud, where a combination of Microsoft Dynamics CRM Online and Office 365 made sales leads, customer records and mail-merge available in a single system that employees could access through their Outlook email.
This example shows that a good CRM system is the type of technology that streamlines and simplifies processes instead of complicating them. Online CRM solutions give small businesses access to a cost-effective set of tools that can help them identify opportunities faster, close deals more quickly, and build more loyal customer relationships.
Of course none of this amounts to anything without some good-old-fashioned salesmanship. The channels have changed and technology has made some things easier, but no one else is going to make those sales calls for you and your team. Generating new business today continues to take focus, drive and tenacity—just like before. Luckily, those are three things that entrepreneurs tend to have in abundance. Go get ‘em!