Despite the many challenges over the past several months, business growth and expansion remain an imperative for many SMEs. However, if the budget you need to implement your growth plans is lacking, you can still put things in motion. In this article, we’ll take a look at 3 ways to grow your B2B on a “shoestring budget”.
Even optimistic times still harbour challenges for SMEs
A recent survey of Australian SMEs by ACA Research and Fifth Quadrant found that a focus on business growth is increasing across the production, distribution and service sectors. Similarly, in the United States, the Vistage Small Business CEO Survey found 47% of CEOs are planning to increase investments and 71% are planning to add more personnel.
However, for many SMEs, getting access to capital is still a challenge. In Australia, 49% of SMEs experienced difficulty in getting loans. Furthermore, with the continued climate of uncertainty, expense control is still a key priority for many SME CEOs.
For those of us operating in the B2B space, selling our products and solutions to other businesses, we face additional hurdles including:
- More stakeholders are now involved in buying decisions
- Sales cycles have gotten longer
- There are increased levels of scepticism and mistrust
How can SMEs seek to achieve their growth ambitions in B2B markets in such challenging conditions? Fortunately, there are ways to tackle these problems.
1. Influencer Marketing
Influencer marketing is where the leaders and experts in your industry or niche promote and endorse your company and its offerings. It is about identifying the “GO-TOs” that your target buyers rely on for insights, advice and recommendations and working with these credible experts that have the attention and trust of your target customers.
Examples of Industry influencers include:
- Professional and trade associations
- Journalists and publications
- Thought Leaders
Why is Influencer Marketing important?
When business buyers are researching a purchase, the sources they turn to after searching the web is usually their “circle of trust” comprising of peers, colleagues and industry experts.
As a result, influencer marketing is no longer a “nice to have” but rather a “must-have” as trust in B2B has been in continuous decline for several years.
Benefits of Influencer Marketing
Influencers can help drive the growth of your SME by:
- Raising your company’s profile
- Providing access to a specific audience
- Helping your company establish expertise in a specialisation
- Helping your company establish its presence in a new industry or market
Studies have shown that 82% of customers are likely to follow an influencer recommendation.
Ways to collaborate with influencers
Collaborating with influencers should be a “WIN-WIN” for both your company and the influencer. Opportunities to explore working with influencers include:
- Speaking at events
- Influencer Review of your product or service
- Video or Livestream interview
- Blog or article containing influencer quotes
- Hosting roundtable customer events
2. Advocacy Marketing
Advocacy Marketing is about using existing clients and customers who are strong advocates of your SME (i.e. your raving fans) to endorse and promote your products and services to other potential clients and customers.
Advocacy Marketing is comprised of two key components:
- Referrals: Endorsements from trusted people such as colleagues, employees and friends
- References: Customers who are willing to speak to on your behalf to potential customers about:
- The products and services your SME provided
- The impacts they had on their business
- Their experiences working with you
It is essential that you have advocacy marketing as part of your B2B marketing strategy as B2B buyers find a peer to peer dialogue to be authentic and trustworthy.
FACTS: A study of more than 600 B2B organizations in Canada and the US found that 84% of B2B decision-makers start the buying process with a referral. Within IT, 97% of professionals say they rely on peer recommendations and reviews to help inform their buying decisions.
Benefits of Advocacy Marketing
Advocate marketing helps brands reach more people than traditional promotional methods (like paid advertising) and generates valuable word of mouth that is more authentic than messaging that comes directly from the marketing.
Referrals and references can significantly impact a B2B company’s performance.
- 71% of companies with referral programs reported higher conversion rates
- Companies with reference programs have increased their closing rates significantly ranging from 30 to 150%
How to implement Advocacy Marketing?
The key to getting the most out of these Advocacy Marketing approaches is to set up a centralised, formalised customer advocacy program, consisting of two parts:
A formal referral program which specifies:
- What types of referrals to seek
- When to ask for a referral
- How to ask for a referral
- How to manage the referral both internally and externally
A customer reference program may involve activities such as:
- Case studies/success stories
- Video testimonials
- Prospects visiting customer premises
- Customers speaking on behalf of your company to media and/or at industry or company events
The activities that you will use for your Customer Reference Program will be determined by:
- Where your buyers look
- The kinds of information your buyers want to look at
- Who your buyers want to speak to
Some examples of incentives your SME could offer to advocates include:
- Free product trials
- Invitations to special industry VIP events
- Featuring advocates in your content
Advocacy marketing in action
Ecobee Inc, based in Toronto Canada produces smart thermostats. The company was founded in 2007 with less than 50 employees. Over the years, Ecobee has leveraged the power of advocates to drive the company’s growth.
Some of their initiatives have included:
- The “VIBees”-its community of advocates which the company calls upon when undertaking its growth and innovation initiatives
- “Access Behind the Curtain”: where new products are launched with advocates first to get their feedback. Customer service and product processes are also adjusted with advocates as their focus
- Feature Fridays: Advocates write blogs about different elements of Ecobee products
Ecobee’s strong focus on advocacy marketing has contributed it to being ranked as the Number #1 Overall Smart Thermostat globally.
3. Customer Co-Creation
Another way to drive growth is by co-creating products and solutions with a small number of your clients/customers that possess long term strategic value to your company. Ideally you would be seeking to collaborate with:
- The top 5-10% of your customers in terms of revenues or margins
- Clients who can help you achieve other key strategic objectives such as penetrating new markets or industries
(It should be noted that with B2B customer co-creation is not the same thing as design thinking. With customer co-creation, customers are involved throughout the entire innovation process-not just at the beginning!)
The aim is to create mutual value for both your company and the clients you collaborate with. The solutions you develop should also be applicable (possibly with some minor modifications) to other clients, market segments and industries.
This will enable the solution to be scaled to many other customers, driving revenues significantly higher than the marginal cost of delivery.
Benefits of Customer Co-Creation
Co-creating with customers will provide a number of benefits to your company including:
- Increased spend with existing customers through upsell and cross-sell opportunities
- Increased supplier exclusivity (i.e. your company is the sole provider)
- Greater customer credibility, access and retention
- New ideas that might not have been thought of in other circumstances
- R&D with built-in testers, case studies and testimonials
Key success factors for customer creation
The success of co-creating solutions with customers will be dependent on your SME having the following characteristics:
- Efforts focused on your “Top 20” customers
- Support of your company’s leadership and their advocacy of co-creating with customers which you must communicate regularly throughout the company
- A leadership that has a very strong understanding of your customers’:
- Environment and organisational goals
- Key issues, objectives and challenges
- Sponsorship and endorsement by a non-sales decision maker within your customer. (A non-sales focus is about genuinely creating value for the customer, not sales)
This in-depth understanding and decision-maker endorsement will allow your company to engage the appropriate people and get them to work with the customer’s team.
Customer co-creation in action
Phononic, a US-based 100-person team business in the United States, develops solid-state heating and cooling solutions, selling into traditional industries that manufacture refrigeration and HVAC systems.
Most of Phononic’s products are created through customer co-creation. Their efforts have resulted in them doubling their revenues to $20 million as well as being named a Top 25 Small Business Standout for 2020 by Forbes Magazine.
Growing your SME is possible even with limited financial resources. The key to success is to work collaboratively and having an in-depth understanding of the customers (and the decision makers within them) that you wish to serve.
This will then provide clarity as to the growth strategies such as the three discussed that will best empower your SME to achieve its objectives.