How Much Does 1 New Client Cost Your Business?
They say on average one new client costs business $2,000 regardless of your average order value.
If you would rather not do any lead generation and go straight to sales leads, skip this article and go straight to the bottom paragraph.
Where do they get this figure from? Well most business owners are active in one or more of these activities, and if you worked it out what it cost to do all these things divided by your paying customers you got from these activities, across the board, new clients cost around 2 grand apiece.
Here are the main are the lead generation techniques still being used today:
How much do you pay your sales people and is finding clients to sell to part of their job description? If you went for a job washing dishes are you expecting to make the dishes as well with a kiln and clay turntable?
If you are a Real estate agent are you expected to build the properties as well as sell them?
Then why are your Sales people who are picked for the face to face selling skills sat at phones all day trying to find someone to sell to?
Have you looked at what a decent telemarketing company expects now? $30-50 an hour, sure Philippinas are sweeter and cheaper but try get them to call Europeans and see how far you get.
Cold calling is an expensive waste of time, if you have to go in cold then chatting with business on Facebook and LinkedIn is far better use of your time and money. Yet still many business owners love to see all their Salesman banging on the phones and heads each day at the office.
I would prefer to have an empty office with calls from my sales people all over the country who are sat in front of decision makers!
Still a mainstay of old thinking. We understand many manufacturers go to showcase new technologies and a good sales person will be active all year to make sure many of their clients will be able to go, but on the day it’s by the grace of God if clients actually make it or not.
The larger blue-chip corporations attend with huge expensive stalls and not expect to sell anything on the day, because they got to be blue-chip organisations as they totally get branding!
Many sales people go to expos as visitors just to gather emails and try to sell to the stall holders, and for smaller business; you only have to walk around to the cheap stalls to see people so bored and even unmanned with signs up telling visitors to call this number and wake the salesman up!
Expo stands are not cheap, and if you are showcasing in another country you may need a container shipped and Hotel stays etc. etc.
As a social media consultant, when I am running a seminar on digital marketing I always ask who likes doing social media and I regularly see around 50% who are there to see who they can get to do digital marketing for them, around half hate doing social media, so they are happy to pay to outsource, not the best, but better than ignoring it completely like so many business owners still do to their own detriment.
To do Social Media really well in today’s market you need a Digital Marketing Manager at $100,000 a year, then a decent budget for getting people to see anything that is put on social media because haven’t you heard? the social media that was free is now in one foot in the grave!
You have to have a decent sized budget to promote posts and also a budget for Google ads, to get anyone to see your website over the billion plus sites that are already out there, and if your business is quite commonplace then you better have more cash that your competitors!
If you can’t afford a Digital Marketing Manager, then you will need around 40 hours a week spare to manage to write 5-10 blog posts a week, to share on social media and to grow your social media reach to a level where someone notices something you are writing!
It’s an average $1000 to join a chamber of commerce in your country and there will always be at least half a dozen big ones. Either way you get discounts of their boozy events but you still have to go with your business cards (oh that’s another cost) and still pay something when you go.
Many chambers promise many things to get your annual subscription, but apart from events and coffee mornings they run with a speaker you are interested in 20% of the time, they are hardly going to go out of their way to set up appointments with other members for you. Get hold of a chamber book from 10 years ago and see how many of the clients are still in the chambers to see how new blood and huge companies who don’t ‘feel’ the $500 a year subscription is their business model.
The morning B.N.I. events are similarly priced and are in the main better than the chambers, but I wish they would tighten up what they feel is a referral for you, and stop expecting members to come up with referrals for the Dodo Zoo guy who has been a member for years!
Rotary and Lions clubs are good places, but go with the main intention of growing your business and you will fail, successful people know its about building trust and a network through reciprocation first and takes months and years.
All this activity above, and tell me I am wrong in the comments, are to get your sales people to sit in front of a decision maker who wants to buy your product now.
The smarter cost-effective way
We at Biz-find have a sales background of 30 years, we did all the above! Then we moved into digital marketing and we feel our background is the special link between what marketing should be doing and what sales people should do to get a sale.
We now produce a list of sales leads for every industry that come from our 6,000+ online business directory members and we also help market your business to our 300,000-real people on social media as a bonus as well.
If you got a few sales leads a month and a couple ended up in a sale for just $35spend with us, would you think that was better than spending $2,000 for one new client using your usual methods?