Lead generation is particularly crucial for SMEs. Without the budgets, resources and brand awareness of big corporates, the methods they use to get the proverbial foot-in-the door must be focused and direct and – in the absence of a marketing department or even dedicated individual – simple. It is also vital to plan carefully in advance to avoid a lot of wasted effort both in preparing the marketing activity and handling the response to it afterwards.
The first thing to understand is why prospects may be in the market to buy your product or service and tailor your marketing around that. It may seem elementary, but sending a message, which is relevant to the recipient is more likely to arouse their interest. Sending a cat food offer to someone who doesn’t own a cat or promoting a car fleet to a two-person business will only harden attitudes.
Leading lists
Perhaps the most critical elements of lead generation is the database. It does not have to be sophisticated, but if it is not continually mined and refined and the information used for following up and reporting back, lead generation will not improve, but stagnate.
If buying a list from a specialist company, SMEs should look for more than a company which is just supplying data. Julie Knight is the MD of Marketscan, a database solution provider which services all industry sectors across the UK with a package called Megabase. She recommends: “Find a company which takes a more consultative approach to help SMEs maximise their resources. Ask what they’re trying to do with the data. How can you enhance it by adding other intelligence?”
Thomson Directories also produce data products – rather than just lists – specifically for SMEs, with the core of their customer base between one and 10 employees. These include Business Search Pro, a nationwide database of two million businesses which companies can search through online using any combination of about 20 criteria – sector, geography, business type, contact title, etc. – to build a specific, targeted list. Thomson makes 8000 telephone calls a week to ‘clean’ and update their lists and has built in a variety of triggers to keep their databases current.
Other direct marketing products from Thomson include New Connections, which registers new and re-located companies, Growing Companies, which comprises businesses which have grown by more than 10 per cent year-on-year and Email Marketing Solutions for Business, a fully opt-in service which can be particularly useful if selling a technical service or product, technology companies being much more open to receiving ‘e-shots’.
Key to the effective use of databases is ‘profiling’. Marketing consultant Shane Redding of Think Direct, who teaches a course in lead generation for the Institute of Direct Marketing, explains: “The purpose of profiling is to understand who your customers are and where to find more like them. I often find that businesses who are buying lists or advertising in the trade press may be getting a good response rate, but are not necessarily bringing in the sort of customers they want.”
She continues, “They could be bringing in prospects which are very costly to convert or have a very low spend-potential. These are customers which you should not acquire.
“Existing customers may not be spending as much with you and they’re easier to convert,” she adds.
Another simple targeting method for SMEs is to focus on people within their geographical area. Whereas corporates tend to have a nationwide presence, making the source of their leads less of an issue, SMEs tend to operate more regionally. Leads acquired from outside their area may cost more to convert and more to service, making them less profitable.
Natural leaders
Traditionally, referrals have been a good source of leads. (If a marketing company could harness the power of word-of-mouth, think how successful it would be.) Companies must recognise the role their existing customer base can play in winning new business by making it work more effectively for them.
People tend to buy from people they know or who have been referred to them, so any type of ‘networking’ via current contacts can be hugely valuable. This also extends to finding out which trade associations your customers belong to and attending their meetings or taking a stand at their next exhibition.
However, Richard Bush, MD of B2B marketing and communications agency Base One, warns: “Referrals are okay, because they don’t cost anything. But you might end up relying on reactive leads and losing control over who you’re doing business with.
“One of your least profitable customers might know five other businesses who are also going to use you just once a year. The risk is that they end up being small accounts – who your customers know as opposed to who you want to do business with. That’s the big weakness, unless you’re working in a niche market.”
Deciphering leads
Bob Dearsley, chairman of ITPR and ITMG, a PR and marketing agency respectively which specialises in the B2B technology market and whose clients are mostly SMEs, urges businesses not to underestimate the power of a website.
He says: “People tell me they’ve had such-and-such number of leads coming to them through their site. My reaction is, ‘No you haven’t. People have come to you through your site, but because they’ve heard about you somewhere else.’ They’ve read an article in the press, they’ve seen an ad or they’ve received a piece of DM.”
To help identify the exact source from a lead off a website – and to help out businesses which know that half their advertising works, but not which half – ITMG have devised simple trackers which ask visitors how they came to a client’s site.
Dearsley says: “It’s hugely valuable to an SME to know where its marketing spend is being effective. Before the advent of the tracker, there wasn’t any specific way of knowing for certain. By deploying a piece of market research tracking software on your website, you can measure the different elements of your marketing mix and the returns they are bringing you.”
