Can you generate too many?
The received wisdom is that profitable business, on the whole, comes on the back of the principle that you have to kiss a lot of frogs…
As digital marketing takes an ever-greater share of the marketing budget, especially in the small business sector, and as social media tools like Twitter generate an ocean of verbiage – albeit of strictly limited intellectual capacity – the temptation to equate quantity with success is difficult to ignore.
After all, the entire sales pipeline model is predicated on a numbers game: the more suspects and prospects go into the top of the funnel, the more business drips out of the bottom, in the form of (hopefully profitable) revenue.
Indeed, most marketeers justify their existence by the number of leads generated by their campaigns, and the average unit cost of each, by campaign, by media, by geography, etc.
Fair enough: there has to be some objective assessment of whether the marketing spend is delivering value for money, but as any political commentator will tell you, there are lies, damned lies and statistics.
Who decides, and on what basis, whether the leads that are being generated are the sort the business really needs, to fulfil your long-term vision and plan? You do have one, don’t you?
And what steps can you take to ensure that busy-ness is not being substituted for business?
This conundrum was brought home to me recently at a meeting with some clients of mine (they know who they are) who took the bold – some might say risky – step of re-positioning the business to appeal to a more lucrative niche in their market, where they believed the market had fewer quality competitors, between the major industry players at the top end and the many sole trader minnows thrashing about in the shallows.
It was a perfectly logical move – and one that has started to pay off handsomely, twelve to eighteen months down the line, but for six months of transition, there were necessarily a few doubts, as the quantity of leads from their re-vamped and repositioned website dried to a trickle.
What was happening was that the new proposition was deterring the previous clientele, who tend to use the web as a straight price comparison tool, whose needs in terms of ongoing service quality are strictly limited, and who are generally single-unit purchasers. Or to put it another way, hard work and low margin.
But what was also slowly building in its place was a perception of a more mature service for medium-sized enterprises, based not only on competitive price points but also on continuing service capabilities.
That trickle of phone calls and web enquiries has still not turned into a flood, but to continue the angling metaphor, the enquiries that are being generated are from much bigger and more profitable fish.
Before any of that could happen, of course, there had to be a vigorous internal debate about what the business actually stood for: rather than continue to chase after many small deals, would it not be better commercially (and from the perspective of personal satisfaction) to target a mid-market sector, where quality of service is as important as base price, where volumes are much higher, and where loyalty tends to follow the service quality?
Once that vision was properly and widely communicated, the trickle of higher quality leads started producing a flood of long-term profitable business. QED.
David Croydon: 01844 238692 or e-mail firstname.lastname@example.org