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Many small firms have a strong customer base, but growing a business is likely to require winning new customers. Penelope Rance outlines 10 ways to secure new clients.
You’ve established your business and created a customer base that you can depend on. But how do you take the next step in growing your client list, and thus your business?
We outline 10 top tips for small firms looking to take the next step.
In order to increase your customer base, you need a clear idea of how and where you’re going to do it. “Identify some very specific sectors and demographics to target with your products or service,” advises Carolyn Strand, Managing Director of CJ Strand Ltd. “Scattergun approaches rarely have a high return on investment.”
After sighting your targets, you need to engage. “Determine a growth strategy linked to measurable outcomes so you know what success will look like in terms of winning new customers. If you don’t have a growth plan, you’ll be wasting necessary time and energy,” says Adrian Roach, Director of business support company Extended Services and Projects (es-p).
FSB can help you find new customers and deliver high-quality marketing campaigns to build your business profile through its Business Leads service. For more details, visit fsb.org.uk/benefits
“To grow, you have to understand the landscape in which you are delivering services and products,” says Ms Roach. “Market analysis is a fundamental part of this, including reviewing who your competition is, their services and how they compare to yours, your pricing points, and the end customers to whom you are trying to sell.” She suggests carrying out a SWOT (strengths, weaknesses, opportunities and threats) analysis to determine where you can add value for your customers and set yourself apart from your competition.
Ms Strand agrees: “With the amount of access we have to information these days, there is no excuse for not doing your research. You may think your idea is brilliant, only to find that a piece of legislation was introduced last week that makes it unfeasible.”
“If you don’t know who your customers are and why they buy from your business, you need to spend time finding out,” says Ms Roach. “Carrying out a customer survey will help you understand who they are, their background, what and why they buy from you and how much they spend.
You can use this both to look for opportunities to cross-sell, and to categorise your customers into groups, focusing on your superstar customers.”
Psychology is key to why new customers choose your business – and you need to understand it.
“Seventy per cent of purchases are made to resolve an issue or problem,” says Michael McMeekin, Director of Arrow Sales Training. “Small companies don’t always understand that; they plough on with what they do, whereas they need to look at what they can do for their customers.”
Although time-consuming, networking can be useful in creating new leads and getting your name known in your sector. But it’s vital to do it effectively. “Networking seems like a great idea to meet new people but too often it’s unfocused, without the right types of people attending – they aren’t people who would buy from you as they aren’t your optimum customers,” warns Ms Roach.
However, networking with the right groups of people who will buy from your business can be time well spent. “If there is a tendency in your industry for key decision-makers to be into cycling as a hobby, why not join a cycling networking group?” she asks.
FSB also runs a host of networking events across the UK. To locate your nearest event, visit fsb.org.uk/regions
No one will buy from you if they don’t know what you’re selling but, fortunately, effective marketing doesn’t require huge investment. Ms Strand recommends the giveaway, or “lead magnet”. “Find something your target market wants and give them it in exchange for being added to your marketing list,” she suggests. “There is a huge amount of activity in this area with more automation taking place, and it’s easy to measure.”
For those hoping to do all their marketing online, Mr McMeekin has a word of warning: “Those who rely 100 per cent on social media will generally fail, including online businesses. Human interaction is still needed. Cold calling, direct mail, email marketing, leafleting, referrals: pick at least three and focus on those to have the best chance of success.”
No matter what your business does, you need to sell it. With customers enjoying greater choice and access than ever before, small firms can’t wait for clients to come to them. “Small businesses need to realise they are salespeople, even if they don’t want to be seen that way,” says Mr McMeekin.
“Everyone has sales skills: asking questions, listening, having fun,” he adds. “Don’t be frightened to put in a sales process so that you know where you are in the sales cycle. But don’t waste time with the wrong prospects. It’s about asking the right questions. Don’t wing it on the telephone or in a meeting – it’s got to be planned.” Simply put, you need to identify then communicate the compelling reason why customers should buy your product.
While you may have great confidence and comfort in your product or service, to expand your client base you may also need to expand your offering. Building on existing success with related or complementary services is an easy first step.
Mr McMeekin recommends prospecting for business around existing marketplaces:
“Focus on who your ideal clients are and where you’ve had success in the past – which sectors and what problems you have solved. Other people in the same sector will have the same problems.” To take the next step, ask yourself whether there are related issues you can solve for the same client list.
Moving into a new marketplace can bring different challenges, but needn’t mean a major shift in your business or increased investment. “You don’t need to go to overseas trade shows to sell your products. Just index, market and promote them properly,” says Peter Mowforth, Director of Indez, which helps small businesses trade overseas.
“Do the basics. If you have a good-quality product, well made, with a good description, reasonably priced and marketed in the right place, you will sell in huge volumes.”
But, he suggests, you should consider back-up. “You need people who understand the culture, speak the language and know how to optimise the supply chain to help with transport and fulfilment. Choose the right partner, with a proven track record.”
One market that is open and accessible to all is the internet. Annual data from the Office for National Statistics shows that, in the UK, ecommerce is worth more than £500 billion – a third of GDP; a report released by IMRG in July puts the growth rate of retail ecommerce at 14 per cent.
“Ecommerce is the biggest thing in business today,” says Mr Mowforth. “If you want to improve your ecommerce business, or you’re setting up and want to grow rapidly, get into exporting. It’s where most of the growth is coming from.” But, even online, he says, it’s important to target lucrative customers. “Sell into the UK first but beyond that go to China, where there are much bigger opportunities than selling into Europe.”
Put yourself in a position to bid for new contracts and you could win clients you’d never have considered before. “Both the public and private sector put out opportunities across a range of services and products,” says Ms Roach.
“While the process for bidding for new work can seem daunting, if you tell clients the benefits of your organisation, provide them with a solution that meets their needs and offer a competitive price, you could be well on your way to securing a new customer.”
David Black has run a fire safety consultancy since 2011, specialising in fire risk assessments. After a challenging start, he has built his customer base steadily over the past six years, concentrating on networking before setting up strategic alliances with safety organisations.
“I had two clients that I started the business on the back of, and I grew it by networking and marketing heavily in the first 18 months,” he says.
“At networking events, my advice is to not be afraid of the competition. You probably have a specialism they may need on an occasional basis. Pick and choose the right events for you, go regularly and build those relationships.”
Developing new routes to market has also paid off. “I made contact with fire companies that needed to provide fire risk assessment to clients but didn’t have enough work to justify hiring someone full-time,” he says. “Now 40-50 per cent of my work is on behalf of other companies.” This includes building contractors, after working for one led to others approaching him for similar services.
“Strategic alliances have really pulled my business through,” he adds. “The first two years were very difficult, but I no longer have to worry about where the next job is coming from.”
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