For most business owners, referrals and word of mouth are the main channels for sourcing new clients. But is that really enough if you’re looking to really drive substantial business growth? Word of mouth is definitely a good thing– it confirms to us that our products and services are valued enough to be recommended and referred by our clients, but there are also limitations when relying solely on word of mouth as the only channel. When sales become slow, businesses usually start looking at what marketing strategies they can use to increase sales; however, the problem then is figuring out which marketing strategy to make use of.
The list of marketing strategies and options can seem endless, from things like advertising, search engine optimization, telemarketing, social media, trade shows, content, and networking events to name a few. Which of these strategies works best? And more importantly, which one of these strategies will increase sales? This is quite a difficult question to answer, as there is no single marketing strategy that increases sales for all businesses. Different businesses will require different marketing strategies, depending on a whole lot of variables such as the type of clients they’re targeting, the average purchase value of their products/services, and whether they are focused on client acquisition or retention.
With that said, I do believe there is a way to begin making sense of the myriad of marketing choices out there, and it starts simply with looking at the three primary functions any marketing activity should be doing for your business.
1. Creating a regular flow of quality leads
Marketing starts with lead generation– the ability to find and attract potential clients who are interested in your products and services. Leads are the lifeblood of any business, and without a regular flow of new leads, revenue can quickly dry up. When generating leads, you need to get both the quantity and quality right- quantity in terms of the volume or number of leads, and quality in terms of the type of lead that is suitable for your business. (For example, if you’re a luxury brand, you’ll need leads with a willingness to spend on your products/services.)
In today’s globalized environment, social media is one of the most cost-effective methods of lead generation. In the pre-social media days before sites such as LinkedIn and Facebook, obtaining a lead could cost you up to one dollar per lead, meaning a relatively small database of 1000 contacts could cost US$1000! These days it really is so much easier. I recommend leveraging the power of social media to any business looking to cost effectively generate new leads and build up a high quality database.
2. Converting prospects into paying clients
The second primary marketing function is prospect conversion, that is the process of converting a prospective client into a paying client. This part of marketing is usually referred to as “sales,” however, it should not be looked upon as exclusively “selling.” One of the biggest mistakes I’ve seen companies make is to separate both the sales and marketing functions and often each function doesn’t necessarily understand its relationship to the other.
Marketing’s primary role should be to support sales, so that when a lead is generated, the sales team has the best chance of converting that lead into a paying client. This means firstly generating a high quality lead, the type that is a good fit for your business’ target audience, and ensuring that the lead has had the opportunity to learn as much as possible about your business, as well as the product/ service they’re interested in, before any sales contact is made. I recommend having a prospect conversion system that precisely maps out how your business can educate and influence as many prospects to become paying clients.
3. Growing existing client relationships
The third primary marketing function is client retention– looking at what your business can do to not only retain, but grow existing customer relationships. This is often a neglected part of marketing that many businesses fail to look at before getting started on lead generation– often a business’ client database is a gold mine of potential just waiting to be tapped into. Marketing’s role is to keep on top of the changing wants and needs of clients and to ensure you’re your businesses product and services always meet those needs (more than your competitor’s products and services). I recommend examining your current client database first, before undertaking any client acquisition or lead generation activities as you may be pleasantly surprised what you find. From there, look at how you can grow existing client relationships in order to uncover new revenue opportunities.
Sourcing new clients starts with mapping out a process for your business– a client sourcing process that shows step by step, how your business will generate quality leads, convert those leads into paying client, and finally how you can grow existing client relationships to uncover revenue opportunities.
Remembering these three primary functions of marketing can help you reduce dependency on word of mouth as the only source of new clients, as well as enable your business to reach the next level of revenue growth.