Developing the skill to generate leads is critical to the success of any business. Unfortunately, many small businesses make mistakes when deciding how to generate leads. These errors can snowball and lead to bigger problems. In fact, the inability to generate leads is one of the primary reasons so many small businesses fail.
With each and every customer incredibly valuable, it has never been more important for small businesses to use the correct methods to generate leads, but many make the same four mistakes time and time again.
The mistakes small businesses make to generate leads and how you can avoid them.
Mistake # 1
They Don’t Use Referrals
What is the best source to generate leads?
The answer is right under your nose. The best way to generate leads is to use the customers that already buy from you.
In today’s world of slick marketing and misleading advertising, people trust their peers more than they trust traditional ads. Which is one of the factors that put marketing through social media so effective? But we will talk more about social media later.
Referrals are the key to any successful business and if you develop a process to turn your most profitable customers into raving fans. You have gone a long way to ensuring the long-term viability of your business. Repeat customers equal repeat business, but they also mean much more than that.
When one of your clients is pleased with their experience of your company, what are they likely to do?
They will tell their friends, who will tell their friends, who will tell their friends and so on.
If their experience of your service is bad, you begin to lose those customers. Guess what those customers will do? Tell their friends, who will tell their friends and so on.
The simplest, most effective way for your established business to generate leads is to get them from your existing customers.
Customers are more informed about advertising than they’ve ever been. Most potential clients get conditioned through years of advertising. They tune out a significant amount of information and a lot of what they do hear they don’t believe. How many times have you seen an ad or commercial which makes claims too good to be true? What is your perception about the company that makes those claims?
Generate leads with customer referrals cuts through of all of that for small businesses. There is an inherent level of trust when potential customers become aware of your business through a friend’s referral instead of your advertising.
So how do you make sure you generate leads with referrals from your best customers?
First, start with outstanding customer service. Train your team. They need to know what to say to clients and how to say it. You must focus on how each person feels after they’ve done business with you and make sure that it’s a positive experience for them.
Next, make giving referrals easy and worth the effort for your customers. Reward them in some way, at the very least with a personal thank you.
Sure, some customers might refer your business even if you didn’t offer them any reward, but why take that chance? There are hundreds of ways you can reward your best customers for their loyalty, and their referrals find a way that works for your business and your clients.
They Don’t Have an On-Line Presence
Remember those days when finding information about a business took a lot of work?
First, you’d have to look up a few in the Yellow Pages. Then you’d have to decide which company to use based solely on a static ad that was probably at least six months old. Then it was a matter of hoping you were dealing with a stable business rather than a bunch of cowboys. You didn’t know the reality until it was too late sometimes.
Well, things have changed a lot. There is so much more information available to us through the internet. Researching a business and deciding who to work with is far easier than now that ever.
Internet marketing has put traditional advertising on its back foot, with traditional advertising, your business goes in search of customers. With internet marketing, companies don’t search for customers. Instead, they give customers the information they seek and the ability to find them quickly.
When you think about it, the thinking has shifted in the world of marketing. Now companies with a strong on-line presence consistently generate leads. And find new customers in greater numbers than their competitors who don’t have a strong presence on-line.
For small businesses, having an on-line presence, and especially a presence on social media networks like Facebook, Twitter or LinkedIn, is a great way to market to potential customers without the concerns of exorbitant costs while creating the community every business needs to thrive.
Creating the right type of on-line presence doesn’t take more than some work and follow through. Even creating a website to promote your business can be done by almost anyone thanks to sites that can set up and host your Blog such as WordPress.
There is no excuse for businesses not to have some on-line presence these days. If you aren’t up and running on-line, you can be sure your competitors are, and they generate leads instead of you.
They Don’t Understand Customer Targeting & Acquisition Costs
How do you view your marketing, as an expense or as an investment?
Businesses that don’t generate leads sufficiently to give them enough customers eventually fail. One of the biggest reasons for this failure is simply they don’t understand gaining customers is an investment. They don’t go about the process the acquiring customers the right way.
It is important to understand that you don’t just get customers, you buy them. When you think that way, you begin to know what you need to invest into your marketing.
This thinking also goes hand-in-hand with marketing your business on the internet because one of the cheapest ways to buy customers is through social media. Probably the most expensive are traditional major media advertising like television or radio.
That’s not to say that television or radio ads aren’t effective. They certainly can be when correctly done but, the risks are far greater for a small business.
Efficient use of traditional marketing, understanding your customer acquisition cost is imperative. If television advertising costs £5000 for 30 seconds, but it brings you, 100 customers, who spend an average of £100, it makes total sense, doesn’t it? Of course it does, you’ve doubled your investment.
But if that same ad is only bringing in 50 customers that only spend £50, that campaign is not working and should be stopped immediately before the costs sink the business.
Too many companies try to capture customers with a wide net when a fishing line will do. Sure big companies like McDonald’s can market to everyone, but small businesses don’t have the resources or brand recognition to make that type of marketing work.
Small businesses need to find their niche and target the people that make up that niche. Is your business attempting to generate leads by marketing to everyone? With the assumption that everyone can and will use your product? If so, you may be missing the boat when it comes to marketing, and you probably aren’t able to generate leads sufficiently to buy the customers you need.
They Don’t Use Strategic Partners
One of the greatest methods to generate leads for your business is other businesses. Working in a strategic partnership with other companies that sell to the same target niche as your potential customers. Who sell a different product, can be beneficial to all parties, especially the customer.
Think about it, if you owned a flooring company, wouldn’t you want to work with roofing companies, trade contractors, and other businesses involved in home improvement? How much easier would it be to generate leads and get customers when you get referred from a company where your potential customers have experienced great service?
Part of what makes owning a small business so hard is that you often feel alone. When you work in strategic partnerships, you are no longer alone. You have another business owner, who is dealing with the same niche of customers you are. They know who’s difficult and who’s easy and they have an idea of what keeps these customers coming back, with many of their friends.
The Final Word
There are many mistakes businesses make when the focus is to generate leads. That is how they learn. If you avoid the four above, your business has a much better chance of growing into the success you want and give you the future you desire.
Through customer referrals, building a strong on-line presence, understanding customer acquisition costs and using strategic partners, your business will generate leads sufficiently to keep your order book full, and your business is moving forward.
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