A new company operating in the B2B sector faces the challenge of acquiring new customers. In the IT industry, companies spend on average $395 on marketing activities to sign a contract with a new contractor. This is the average cost of acquiring a potential customer called CPL or Cost Per Lead. Such a high amount of spending is not surprising when you realize the gains from a potential contract. Companies are ready to spend significant budgets on various methods of acquiring new B2B customers because initially expensive establishment of a new business relationship pays off in the long term. Therefore, a relatively cheap method of acquiring good quality leads can be a shortcut to creating a competitive advantage.
Lead B2B – someone potentially interested in your company’s services and who can be acquired from various sources. Often, it is the source that has a direct impact on the cost of acquiring the customer.
There are currently two types of B2B leads in the industry. Inbound marketing leads and Outbound sales leads.
The article below contains information about the factors influencing the cost of acquiring a customer in the B2B industry as well as on different types of lead generation methods.
Lead generation strategies
Before starting any specific sales and marketing activities, it is necessary to plan a strategy that will be best suited to our products and services. As the cost of customer acquisition may vary, when planning a customer acquisition strategy, you should first of all focus on the appropriate metrics that will ensure that the method you decide on is sufficiently profitable and scalable.
One of the key metrics used in this case is CAC – Customer Acquisition Cost. This metric allows you to estimate the costs that a company incurs in order to acquire one customer. The method of CAC calculation consists in summing up all marketing and sales costs and dividing the result by the number of acquired customers.
The second very important metric is the aforementioned CPL or Cost Per Lead. In order to estimate CPL it is also necessary to include all the costs incurred for client acquisition activities and divide them by the number of generated leads.
Another important metric is FCR or Funnel Conversion Rate. This metric indicates the level of lead conversion at different stages of the sales funnel. It is also worth analysing FCR in terms of the source of the lead. This will allow you to assess whether, even if the source has an attractive CPL, the leads are still converting to new customers.
There are, of course, much more marketing metrics. However, if you are just beginning your sales and marketing adventure and are planning to acquire B2B customers, you must know at least the three we have just described.
When it comes to planning a customer acquisition strategy for your business, whether you work in the B2C or B2B sector, long-term thinking is important. Many of the methods outlined below take time. Their effect becomes tangible only after a while. It is important to have this in mind when planning your strategy, because it will affect your direct sales results. Just as with cost, so with effect – the speed of the first results depends on the source of the lead obtained. Most often marketing activities give wider results, but this takes time. In the case of sales activities (Outbound Leads), the effects are much faster.
You don’t need advanced systems to plan a B2B customer acquisition strategy. All you need is Excel, which will allow you to plan different channels and prepare a list with metrics. Now all you have to do is roll up your sleeves and start working and testing various methods.
Branding and brand awareness
Companies with a high level of recognition in their market can offer higher prices and thus generate higher profits. In your cold mailing campaigns you notice that brands with high market recognition have a higher read-rate and receive more answers, including positive ones. I think that many companies still spend too little time and resources to build their brand awareness. This is probably due to the problem of calculating the ROI (return on investment) of such activities. It may be a big simplification, but I think that PR and brand awareness building activities can be one of the better investments imaginable in the long term with regard to customer acquisition, and the B2B industry is no exception.
Working on brand recognition is an arduous process and often requires a creative approach. The basics of this topic were well described by Jarek Szczepański in his book “Strategic brand marketing”.
The biggest challenge in promoting a brand in the B2B industry is the narrow reach that it can attain in an ideal marketplace. If your offer is aimed at sales decision-makers (directors and sales managers) and we operate in one country, according to the data from Linkedin we can reach 450 000 people in Great Britain, 120 000 people in Spain and 60 000 people in Poland. This is quite nice numbers, although small in comparison with classic B2C products.
The fun begins when your solution is aimed at corporate clients. Then only about 1000 companies and about as many decision makers will constitute the target. Such a number is a nightmare for the salesmen. This does not mean, however, that you should not devote resources to building brand recognition. Reaching such people directly is difficult, although possible (I encourage you to familiarize yourself with the concept of cold mailing). However, the marketing department can reach a wider group of people in the company, who also have a certain decision-making power. In this case they would be salespeople in various positions.
Properly built branding may in the future reduce the costs of acquiring new customers and increase our company’s popularity.
Satisfied client
According to outboundengine.com, acquiring a new client can cost 5 times more than maintaining a current one. The chance that you can sell something to a company that is your client is 60-70%, while for new clients it is 5-20%.
Offering a quality product or service, which results in returning customers, is crucial for business. A business strategy based on the process of gaining new orders placed only by new customers is a very expensive option. Such a company finally hits the wall in the form of a saturated market. If you are looking for the cheapest way to acquire B2B customers, the best method will be to make sure that the customer is satisfied and will come back to you as soon as the next need for your services or products you offer arises.
More and more companies operating on the B2B market are beginning to offer their services in a subscription with a contract of a duration of 6, 12 or sometimes even 24 months. This model of cooperation allows the service provider to be more flexible, which translates into greater customer satisfaction.
You can ensure customer satisfaction through:
- Onboarding program – it will allow your client to get to know your product or service better.
- Net Promoter Score (NPS) – a survey allowing to regularly measure customer satisfaction.
- Regular meetings – a dialogue with the client allows you to review your actions and make sure that both parties understand each other well.
- Loyalty program – thanks to it you can reward customers who come back to you.
A satisfied customer is the key to gaining new orders.
At the right stage of the company’s life, it is worth considering dividing the responsibilities of the sales department into a team whose goal is to acquire new customers and a team whose task is to build relationships with current customers.
This will ensure that both teams are focused on the right goal and are 100% committed to achieve it. Hence the sales positions such as Pre-Sales, Sales Representative and Key Account Manager. The latter is the person responsible for maintaining customer relations.
When it comes to current customers, it is worth mentioning Cross and Up Selling activities.
Cross Selling – activities consisting in offering current customers mixed, additional and combined services, which increases the value of the revenue generated for the company by this customer. A great example here is McDonalds with the famous “Would you like some fries with that?”. It is worth considering the possibilities of Cross Selling in the company, which allows to create a portfolio of additional services and products and increase customer loyalty.
Up Selling – activities consisting in increasing the value of the service, which also increase the revenue generated from a given customer. Examples include Premium subscriptions in telecommunications, TV and other online services. Customers have different requirements so the possibility of receiving something extra is a very interesting incentive for many customers.
Webpage
There is a frequently used “strategy” when it comes to designing websites. It usually starts with the phrase “Let’s do something fast now, we will improve it afterwards”. Frankly speaking, this is not bad at all, provided that this “afterwards” actually happens in the next few weeks. However, experience shows that the website version done quickly becomes a rather final version that takes several years to be replaced.
Most businesses can be said to have a website while only a small fraction of them really develop a website. The difference is huge. Your business can change a lot in a few months. There may be new customers to boast about, a new product or its concept may arise, something important for the company may happen. All this should be reflected on the website.
Why is it so important to keep the website up to date? There are two reasons. The first is that nowadays more and more companies operate without traditional meetings with customers. The contact is made only by phone and Internet. Many people will draw conclusions about your company based on what they see on your website. If the latest update in the “News” section is from three years back, you can conclude that the company is not developing. In such a way the company not only loses its legacy, but can also be perceived by its potential employees as a less attractive place to work.
The second reason is that you cannot expect acquiring leads to generate better results if you do not make any changes to the website. The marketing team can work hard, creating posts on Facebook, engaging in discussion groups or promoting the company at events, while forgetting that even a small improvement in the conversion rate can bring better results. Let’s do some Maths.
If your website is visited by 1000 people every month, you will generate 50 leads with a 5% conversion. Building such traffic may cost several thousand PLN a month. Increasing the conversion by 1 percentage point results in 10 more leads from the same traffic every month! Such an improvement may translate into tangible savings on an annual basis. Generally speaking, the more money you spend on marketing activities that increase website traffic, the more profitable it is to invest in conversion improvement.
Experiment with the content and design of the site, but don’t exaggerate with the A/B testing. You will find plenty of tutorials on the topic and the A/B testing importance in improving conversion. In practice, only popular brands can afford to modify individual elements and collect the necessary data to draw conclusions. If you don’t have 10,000+ visits per month, don’t play with the colour of the “Register” button for the purpose of the A/B test. It can take a month before an effect is visible, and you will always be uncertain whether a possible increase in conversion is not due to other factors or actions. If your website is not popular, modify several elements at once and just check if it works. Of course, if there is an improvement, you won’t know which element is the most important, but it dos not matter as long as you are acquiring more customers. If you are an inquisitive type, in the next tests you can check which of the elements was the most important.
The company’s website, provided that it is kept up to date, reduces the cost of acquiring a client.
The design and further development of the website should be thought of well before the actual creation of it. The worst thing you can do is to base all the website creation process only on ideas and inspirations without any insight into SEO, conversion rate, knowledge of the market and of good practices. As InStream Group, when creating a website, we carry out several key activities.
- Definition of a potential client’s behavior-based profile
This practice consists in finding things your company has in common with a potential customer, the processes that take place in their company and defining the problems and challenges that await them in relation to the problems that have just been identified. As a result, you should obtain a set of the customer’s current needs,which indicate what solution and values you should consider when planning the next subpages and content of your website.
- Mock-ups and content development
The second step is to plan the layout and content. Only then should you think about the design. Unfortunately, many companies focus first and foremost on the visual issue, forgetting that it is the content that is the converting factor, and the way of presentation is only a secondary aspect that contributes to the final effect.
- Implementation of the website and testing
The website, once designed, is still in need of testing. In order to do so, it is worth asking current and potential customers for their opinions. The key test, however, is to conduct a survey on a group of people who do not yet know the company’s services and products. Their answers should show you to what extent the website convinces them and what it lacks.
When creating a website you can use several interesting tools:
- Draw.io – an add-on to Google Drive. It allows you to create mock-ups, processes, paths, thanks to which each subpage is easier to develop.
- Asana – allows to manage the production process
- Similarweb – allows you to research and measure your competitors’ marketing sources, which gives you a lot of valuable information.
- HotJar – creates so-called Heat Maps which allow you to study user traffic on the website and draw conclusions from this data. This tool makes it easier to make the website as readable as possible for the user.
- Archive.org – allows you to analyze the history of the website of the competitors. It gives a lot of valuable tips on how to design the site.
Affiliate and partnership programs
Affiliate programs allow you to win customers through business partners. This can be a great and cheap way to gain new contracts. Affiliate programs consist in paying a certain amount of money to the intermediary who contributed to bringing the customer. But the burning question here is how much should you pay?
Marketing necessarily involves spending a certain amount of money to acquire customers. This cost is called CAC or Customer Acquisition Cost and is calculated in the following way:
CAC = Cost of marketing activities/number of new customers acquired
The above indicator is calculated for a specific period, e.g. a month. This means that all marketing expenses for a given month are divided by the number of customers that you have acquired through these activities during that month.
For example, if in January you spent 10,000 PLN on marketing and gained 20 new clients, then our cost of acquiring one client is 500 PLN. In other words, CAC = 500 PLN.
What does that mean? It gives you an idea of how much you spend to acquire a new client and what the maximum commission value for the partner should be. If you were to pay a partner 600 PLN for a customer it would be an unreasonable decision. After all, it’s enough to increase marketing expenses to 10,500 PLN in order to gain 1 more client. More than that, you save 100 PLN!
On the other hand, not all customers are equal. Usually, in typical marketing activities, you acquire customers in the form of small and medium-sized companies. The value of such a deal may be much lower than the value of a lead acquired for you by a partner.The solution to this problem is to reward the partner with a percentage of the contract value. This approach is very often used by SaaSy. In such a model you can share part of the margin with the partner who acquired the client for you. Additionally, such a solution is safe from the financial perspective of the company.
An affiliate program can be a great way to attract new customers. Building such a channel is certainly time-consuming, but in the long run it can bring you many benefits.
With affiliate programs you do not need to invest in the entire infrastructure immediately. There are several very simple ways to build a manual program. The acquisition of references should also be encouraged in the sales department, which will certainly improve the results in this respect.
- Request for recommendation – it is a good habit to simply ask satisfied customers to introduce you to their customers. While doing so you can, but don’t have to, offer a discount in exchange for such a referral. If the client is really satisfied with your work, he will be happy to do so without any additional costs on your side. Often such a recommendation entails an NPS survey. If the result is positive, the client becomes a so-called Brand Promoter/Ambassador. The company then concentrates on obtaining more positive feedback and additional referrals.
- Recommendations on Linkedin – the Linkedin platform is a great place to use recommendations and thus reach new customers. You can ask the customer to publish short information about your cooperation and effects. Such feedback is the best reference that a company can get.
- Intro on Linkedin – a good practice is to search through your client’s network of contacts for potential clients and ask for a recommendation through Linkedin. A client may then open a group conversation and introduce you to 2-3 selected clients from his network of friends.
In order to successfully attract B2B customers you need good references. To this end, you should rely on satisfied customers as much as possible. Case Study, Recommendation or contact details of a reference customer is a very strong sales and marketing tool.
Social Media
Social Media are very powerful tools which, when used properly, can bring many desired benefits. Over the years, the use of Social Media in the field of customer acquisition has changed. Whereas in the past it was enough to be active and interesting, today we observe an oversupply of content, which makes it necessary to stand out in order to be properly noticed.
When planning social media activities, several elements should be considered.
- Strategy and planning – social media activities must take place on a regular basis. It is important to get the recipient accustomed to your content, thus gaining a permanent audience.
- Results measurement – social media activities can cost a lot. Sometimes, however, this is due to the lack of proper targeting. Assessment of results is another important aspect of social media that, if omitted, may contribute to more costs. It is enough to design an advertising campaign wrongly or select inappropriate groups to multiply the costs in one day without obtaining any results. Therefore, if you do not have experience in conducting activities on such platforms as Facebook, Linkedin or Instagram, you should first of all use the support of an experienced partner or train yourself accordingly.
- Appropriate channel – what Social Media platforms should be chosen to effectively attract B2B and B2C customers depends on the type of customer. The most popular in B2C industries are entertainment platforms such as Instagram, TikTok, Pinterest and Facebook. For B2B purposes Linkedin, Quora, SlideShare and Youtube are mostly used, although Facebook could also prove to be a good choice.
B2C – activities focused on the individual customer. In the case of Social Media, activities are focused on reaching as broadly as possible. They are supposed to stimulate, sometimes even by being controversial, to be funny or arousing desire in the customer. That is why entertainment platforms where you can count on Influencers’ support in promoting your brand are ideal here.
B2B – activities focused on engaging through education and competence sharing. In the B2B sector, content quality is more important than reach. Due to the oversupply of online content, if you want your activities to be followed and promoted by your readers, you need to ensure the highest quality content. In B2B business, it is worth presenting yourself as an experienced expert in a given field. That’s why Linkedin, Youtube and Blog are crucial as they allow for creating such a vision of yourself. Webinars and presentations on SlideShare are also good platforms for the purpose.
Whatever Social Media activities you plan, please note that they must direct the customer to a place where you can contact them. Most often it is your website, blog or other. Remember to measure the conversion rate. Even the best social media “campaigns” may unfortunately not translate well into the conversion rate. The goal is to engage in such actions that provide the best possible CPL.
Education and sharing of knowledge
If you plan to attract B2B customers, you must become an expert in your field. Nowadays, the number of content and marketing activities is so large that only the very best quality content matters. Many customers who could decide on your service or product must first feel that they are talking to an expert. If you don’t have the opportunity to prove this in a direct relationship, you should take care of such an image of yourself on the web.
So how to build Personal Brand Awareness?
Personal brand awareness among potential customers is a very important element of marketing strategy. However, building it requires time and commitment.
- Create high quality content full of information – don’t be afraid to share knowledge. Customers who see that they are dealing with a specialist will be more willing to turn to you. And don’t be afraid to give away knowledge for free. Despite receiving your tips in a Blog or Linkedin post, customers are well aware that they still need your support and time.
- Choose the right channels – building personal brand awareness requires involvement in Social Media. Invest time in enhancing your Linkedin profile. Take care of your recommendations. Make sure your profile is as professional as possible. Share content and engage people.
- Dispense advice – Quora is a great platform for giving advice. This is a great way to build an image of a mentor on this platform.
- Participate in conferences – engage the audience with yourself. It is important that people associate you as a person who is completely involved in a given field. This builds up your authority and confirms knowledge in people’s eyes.
- Create the content you would like to read yourself – otherwise you will be treated as another aspiring advisor, not a real expert in the field. Respect the reader and their time.
Having the right personal brand not only helps to attract B2B customers more effectively, but also helps during meetings and in building relationships. Trust can be built thanks to the fact that the customer can verify who you are and get to know you better in the network.
How to acquire customers directly?
As I have mentioned at the beginning of the article, there are two main types of customer acquisition. Namely, marketing and sales. In case of marketing activities it really takes time and a marketing idea to build an efficient customer-attracting structure that would bring them to your website base. However, there are methods of customer acquisition through direct actions. Such activities are primarily Social Selling, Cold Emailing and Cold Calling.
Social Selling – these are activities that are strongly associated with building a personal brand. By engaging in Social Selling activities I mean becoming active on Social Media platforms and building personal direct relationships with potential clients. The ideal tool in this area is Linkedin or Quora. Linkedin gives an opportunity to reach people with whom you really have something in common. Such a thing can help open doors that were previously closed for you. Here you will find our article about how to sell effectively on Linkedin.
It is also worth getting acquainted with the functionality of Quor. This platform allows you to build relationships by answering specific questions asked by different people. By building the image of an expert and establishing relationships you can acquire many valuable new clients.
In the case of Cold Calling activities, you should first of all assess whether your product translates to an adequate ROI as regards such activities. Calling a potential customer often requires a lot of attempts, which is time consuming and expensive. Therefore, it is important to consider whether it is not better to reach customers via Linkedin or by e-mail instead of cold calling.
An alternative to Cold Calling is the Cold Email method. This method involves sending short business emails to your customers to make contact and invite them to a phone call or meeting. However, the Cold Email method requires experience and understanding of legal aspects in Europe.
Above you will find a link to our article on the basics of cold mailing. You can also simply contact us on this subject.
Summary
Acquiring a large number of B2B customers requires foundations to be built first. These include a recognisable brand, thanks to which a potential customer takes you into account when the need arises. Another important component is the satisfaction of existing customers. If the customers do not come back to your company, its future looks bleak. Also, make sure that you constantly develop your website. Update it with news and changes that take place in your company. Remember that the affiliate program will help you ensure a reliable source of new customers.
In order to acquire customers effectively, it is necessary not only to attract them, but also to handle the sales process properly. It is equally important, if not more so, as far as increasing sales results is concerned. Each acquired Lead should be entered into the CRM system, and then go through an appropriately designed path. The better you design your sales process, the more effectively you will attract B2B customers.
