Small Business Lead Generation – from Customers or Prospects?

The tremendous penetration of CRM (Customer Relationship Management) Solutions in today’s Large Account market, and ongoing battle for market share in the Mid-size market, has left the SB (Small Business) market wondering when they will get some attention.  They do have Contact Management solutions, but those don’t help create more opportunities to sell.  We’re defining the SB market as companies with up to 100 employees. 

To date, many SB’s can’t afford a CRM solution.  Customizations, time required, limited resources, and lack of sales and marketing processes are just some other reasons CRM has not significantly penetrated SB’s.   Recently, signs show that vendors are beginning to pay attention to the up to 20 million small businesses in the U.S. 

What is the value of a CRM solution for a small business?  Most CRM implementations are based upon the need for improved relationships with your customers to serve them better, keep them longer, and sell them more.  Is that important for a small business?  Yes, but it is not as challenging for them because small businesses have relatively few customers. 

They do have real trouble acquiring new customers.  New business development is the most critical success factor for SB’s aside from sufficient working capital.  Our surveys of hundreds of SB’s show what their priorities are:  lead generation; market awareness; and lead management. 

So what is the challenge?  Statistics show that it takes 6-7 contacts per year per decision-maker to create and maintain awareness.  Across all industries, 80% of new sales require 8-15 contacts before they are interested.  But the average salesperson abandons after 1-2 attempts.  Don’t blame the salesperson.  They cannot manage many accounts of that type because they have a quota to make this month.  They must focus on companies who are interested now.  Perhaps we can appreciate why a 1% marketing response in today’s environment is considered average.  It takes a lot of contacting.

Most small businesses average 7% market awareness.  So 93% of their market is not ready to buy from them.  After all, the first requirement to make a sale is that the prospect must know who you are and what you do.  It’s scary for many SB’s to realize that typically only 150 companies represent their revenue universe, not 2,000.  (Customers + prospects + others who know you, out of a target market of 2,000 companies). 

Marketing research shows that over 50% of leads from marketing activities buy from someone, but take 6-18 months to close.  What sales person can invest much time with prospects in that situation?  So, lead management is a problem as well since many long-term opportunities are missed. 

What salesperson can consistently devote enough time to cold-calling?  It is becoming more difficult each year with new laws and technology that inhibit calls, time allocation and motivation issues, and new competitors all pounding away at decision-makers.

What methods are available then?  There are cost-effective ways to address these issues.  Manually, you can create a series of ongoing marketing letters or postcards, and outsource the fulfillment to your printer. 

If you research some of the CRM online or Enterprise solutions for small businesses, you can find a few that include e-Marketing and are affordable and easy enough to manage in-house, or with the help of a Reseller.  Or you can find e-mail marketing software products that provide HTML templates for marketing message content creation and e-mail delivery. 

Just make sure you know what your priority is, customer marketing or new business development.  The answer determines what solutions are viable.  If it is customer base marketing, the HTML-template driven solutions are great for communicating email newsletters, surveys, etc. to customers and prospects who already know you.  Since you are already in their address book, these campaigns will not get filtered out as much.  Industry averages show about 20% of these campaign emails were opened last year.

However, if you are looking for new business leads from people who do not know you, the more HTML in the email, the more likely it will be filtered out.  Of course, you also have the significant problem of sourcing an opt-in email database list and determining how to provide resource time to continually create content and conduct at least monthly email campaigns.  These are the challenges that lead companies to utilize eProspector.  Our HTML content is so minimal that it is typically below the HTML point scale for email filtering, and the message creation and delivery process is totally automated so no resource is required.  Our averages show a similar 20% average open percentage from campaigns, but it is all the more impressive because it results from people who do not know you.

Please see our product demonstration section on our web site for an overview, or contact us at tgriffin@eprospector.com for more information.