What successful small businesses do differently to win new customers

A recent study has revealed the different behaviours used by successful SME’s over their less successful rivals, highlighting the new marketing tactics that are helping to win new business.

A recent report of small and medium sized businesses provides a useful insight into the different behaviours adopted by those succeeding in the current climate compared to those doing less well.

The study was conducted amongst 208 SME marketing decision makers in North America via an online survey in August and September 2012 (see below for respondent profile).  The research appears to define “successful” as a company exceeding its planned business targets for the year and those less successful as those behind budget.  

Clearly the different budget setting processes adopted by each business represents something of a question mark over these results, but the research was undertaken by much respected Forrester Consulting and so should be robust.  (If you want to view the full report, download it from Act-On Software who commissioned the research).

What do successful SME’s do differently?
One of the tables in the report highlighted the extent to which successful SME’s differed from less successful ones in terms of what they found most challenging.  Using the figures from the report, table 1 below shows the “Marketing Challenge” profile between the two groups.

Table 1:  Biggest Marketing Challenges

Whilst the profiles differ in terms of rank order, significant differences are few.  Table 2 looks at the percentage gap between the two groups.

Table 2: Differences in perceived marketing challenges:

Increasing sales from existing customers appears to be the widest gap between the two groups.  It seems that the more successful firms found this less of a challenge, presumably as they have strong relationships with existing customers already and / or are actively looking to acquire net new customers.

If the presumption is correct it would help to explain the second and third largest gaps between the two groups. Having secured strong relationships with existing customers, the more successful firms look to maximise the performance from existing lead generation activity.  They appear to have less of an issue generating new leads or in raising awareness (that’s not to say they don’t have a challenge in these areas, just less of one).

Less successful firms have a greater struggle differentiating themselves from competitors.  This implies a weakness in market positioning and possibly under-developed customer facing marketing and sales content.

The tactics SME’s use to acquire new customers:
Around 20% of respondents from both groups find it challenging to drive traffic to their website and generate new leads.  This is unsurprising when you look at the techniques they use to acquire new customers, which are heavily weighted towards traditional sales techniques.

The research report unfortunately does not give a break-down of tactics between the two groups of firms – choosing instead to compare SME’s to larger enterprises.  Despite this, table 3 does reveal some useful insights.

Table 3: Tactics SME’s use to acquire new customers:

Traditional methods remain prevalent (i.e., personal relationships and networking, trade shows, print advertising and PR).  What is interesting is that around three quarters of respondents claim to be using “Content Marketing”, SEO, email marketing, lead nurturing and social media to target new customer acquisition.  

This probably reflects the innovative instincts of the SME respondent audience sampled and that they are investigating these options rather than declaring them as tried and tested tactics to acquire new customers.  Having said this, the report goes on to explore one new customer acquisition method that does appear to be succeeding – social media.

SME’s are winning new customers through digital and social media channels:
The report highlighted the extent to which SME’s are using different digital and social tactics to acquire new customers.

Table 4: Digital and social media tactics used by SME’s for customer acquisition:

This table reflects the tactics SME marketing decision makers claim are working and intend to continue using.

So, over half of this population of 208 North American SME marketing decision makers are using video to help in their customer acquisition activity, closely followed by social networking sites and then blogging.  More to the point they feel these tactics are working.

This is consistent with another report conducted earlier in 2012 amongst marketing decision makers in North America, although this sample included marketing professionals in larger enterprises too.  This showed high usage of social media (87%), content marketing (83%), blogs (77%) and video (70%) too.

If this North American research translates into a similar experience in the UK and Europe, then we can conclude that:

• Traditional customer acquisition methods remain the most popular, however…
• Two thirds of SME’s are exploring digital and social media tactics and almost 50% feel they are yielding success
• Over 80% of SME’s recognise the importance of content marketing yet...
• ...some 20% still struggle to drive sufficient traffic to their web site or generate sufficient lead volumes.

The report is not clear about the underlying causes for these challenges – typically it’s around work load, limited time, budget and/or a lack of skilled resources.  The cost effectiveness of leads generated from traditional methods relative to digital or social sources was outside the scope of the Forrester research but should also play a key role in SME marketing planning.

Small and medium sized businesses are limited in terms of the number of exhibitions and events they can attend and the number of times they can tap existing customers for new business.  Growth is most likely to come from spending more on advertising or using the newer digital and social media channels.  

For this to be effective, firms will need carefully crafted content in sufficient volumes to maintain awareness amongst its target audience and keep prospects engaged.   If social media has reached a tipping point in terms of business acceptance, then owners of small and medium sized businesses need to expand their skill base even further or utilize external support.   As the Forrester report highlights, it’s the digital and social routes that are more scalable and represent the best techniques to adopt for growth.  

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Source: “Driving SMB Revenue in a Tough Economy”, conducted by Forrester Consulting, commissioned by Act-On Software.

Data profiles: 208 SMB marketing decision makers based in North America.  An online survey conducted between August and September 2012.  Employee size breakdown:

48% - 50 to 249 emp
16% - 250 to 499 emp
14% - 500 to 999 emp
22% - 1000 to 2500 emp

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