I recently came across yet another study that served to question the way we currently go about B2B sales and marketing. According to research carried by marketing service provider Constant Contact with their client base of small to medium businesses, 90% of most business comes from current or returning customers. In itself I didn’t find that surprising – but the study went on to say that up to 90% of the business that comes from new customers is the result of ‘word of mouth’ referrals, so 10% of new business, or a measly 1% of overall business, comes from brand new prospects acquired through new business sales and marketing programmes.
In a previous blog, “Is B2B Sales & Marketing a waste of money?”, I explored why less than 1% of responses to sales & marketing actions result in completed sales. I concluded that we spent too much time and money on strategies and tactics that involve the supplier ‘reaching out’ to all potential customers – no matter whether they want to hear from us or not. We are trying to talk to people with whom we have no existing relationship and a very high proportion of whom have no current need or budget for our product or service. No wonder these approaches are unsuccessful.
Not only is this wasted effort costly, but it can be even more counterproductive – the constant bombardment most executives get from suppliers with something to sell is irritating at best and downright annoying at worst – to such an extent that they would not countenance working with those suppliers even when they do have a need. The ideal environment would turn the commerce world on it’s head where new buyers communicate with suppliers when they have a need – so that a response is welcomed. An online marketplace for B2B services, such as that offered by INNOVO, offers such an environment. It also enables the savings made by suppliers in their sales and marketing activities as a result to be shared between buyers, suppliers and good causes.
The insight offered by the Constant Contact research gives positive direction to sales and marketing activity that can complement belonging to a marketplace like INNOVO. It doesn’t say that sales and marketing programmes cannot deliver the business both from existing/returning customers and word of mouth referrals. What it is saying is that the priority focus needs to evolve from one of communication to prospects who have no existing relationship with us to engagement and nurturing of those we have some sort of link with, even if it is an indirect one. It also goes to highlight why great customer support and satisfaction should be of huge interest to marketers – that is from where those referrals come.
So, in summary, what are those 5 things you need to change?
- Change from targeting your marketing on unknown prospects to focusing on existing, referred or returning customers.
- Change from trying to just win brand new-name business to increasing up-sell and on-sell revenue.
- Change objectives to place a priority on getting referrals rather than just new leads.
- Change from broadcasting out to unknown potential prospects to listening for buyers with a desire to buy, e.g. through an online marketplace such as INNOVO
- Change to marketing activities with a focus on nurturing and customer support rather than creating brand new prospects.
How has your marketing focus changed recently – have you managed to get more business as a result?
Originally published on INNOVO Blog