When setting out for growth or expansion, typically there are few key ways using which B2B (Business to Business) companies grow.
- Referrals OR Affiliates
This is a structured referral program which incentivizes your previous customers or other partners to refer you new business in exchange for a fixed amount of money or percentage split.
- Word of Mouth
This is when your previous customers have an excellent experience and end up sharing with others, to result in new customers through word of mouth. In order to excel in this, you simply need to focus on your product, delivering excellent results and customer experience.
- Industry Conferences
A lot of B2B businesses attend conferences specific to their industry where they can meet potential customers. Medical Coding Softwares, Cyber Security Softwares, Investment Banks, Digital Marketing Agencies & Tea Export companies are a handful of example companies that attend such conferences and Web21x has personally worked with. However, it’s important to note that the lifetime value of the customer needs to be big enough to get an ROI after these expenses. For example, if your software costs $10 per month and the average user stays on the subscription for 6 months, that’s a lifetime value of $60.
Let’s say you attend a conference, get 100 new leads and convert 20% of them ending up with 20 customers, that’s $1,200 ($60*20) you made from the event.
In the above example, if it costs you anywhere above $1,200 for the event, it’s simply not worth it. However if the event represented potential partners with massive audiences who could distribute your software to their audience, it may make sense.
For example, if you get 20 new leads with a 10% conversion, that means you got 2 people to distribute your software to their audiences.
Let’s say each of them have an audience of 1M, and you have a 0.3% purchase conversion rate.
Total Purchases = 2M * 0.3% = 6,000
New Revenue = 6,000 * $60 = $360,000
As you can see, it’s very likely for you to have an ROI in this situation as opposed to the former.
- Inbound Marketing (Ads, SEO, Social Media)
These channels are quite common, but the real trick is in making them work for you specially Ads and SEO. Among these channels, usually it’s a bad idea to start with SEO if you don’t yet have a product market fit. If you have enough budget, run tests aggressively to figure out what works and what doesn’t. (Channel, Ad Messaging, Placement, Audience, Landing Page and the entire funnel flow) In the case of Google Ads, once you’re sure that particular keywords generate you strong ROI, then you can allocate budget towards ranking for those keywords with SEO. Because, now you are 100% sure that this flow has provided you a strong ROI with ads. Once you rank organically with SEO, you will have a massive ROI on it since you will be generating new customers without any new ad spend.
- Outbound Marketing (Cold Email, LinkedIn, Cold Calling)
Outbound Marketing as the name suggests is you actively reaching out to a potential prospect to generate new leads for your business. Cold Email, LinkedIn and Cold Calling are some of the key outbound channels.
One of the big benefits of outbound marketing is the instant market feedback & being able to drive results much faster when compared to other channels. Again, your product lifetime value should be enough for you to make an ROI after costs.
Let’s take an example. You spend $5k per month for 12 months which is $60k annual.
You end up generating 20 new leads per month with a 15% close rate. So, you’re closing 3 new customers every month which is 36 annually.
If your product lifetime value is $10k, that’s $360k in new revenue. After your expenses on the outbound marketing activity, you make $300k. Let’s say you spend $160k to deliver the product/service, your business makes $140k in profit on this. That’s how you determine if outbound marketing makes sense to you.
If you are a B2B business and want to explore whether Web21x can help you with outbound marketing, reach out to me directly or schedule a call on my calendar.
I’ll be digging deeper into outbound marketing in upcoming content as that’s our core speciality at Web21x.
Comment below if you would like to see more content of this nature, or with any questions you may have.
