Cost-Effective Customer Acquisition Strategies Tech Leaders Need to Know
Are your customer acquisition cost (CAC) trends cringeworthy?
You’re not alone. CAC has increased for B2B tech companies by nearly 70% from 2013 to 2019. Over the past two years, the lack of face-to-face interactions has only worsened the problem as marketing expenses are climbing and incoming customers are descending.
So how do you know when your customers are too costly to convert?
The industry standard states that if your customer lifetime value (CLV) is three times your acquisition cost (3:1), you are in great shape. But if you see the gap between your CAC and CLV closing, profitability starts to dwindle and sustainability is jeopardized.
It’s enough to make any business owner a bit skittish, but all is not lost. With a few adjustments to your marketing and sales strategies, you can cut down on expenses associated with gaining new clients and improve your company’s value.
To equip you with the most cost-effective customer acquisition strategies for your tech company, we collaborated with two of our top-producing sales executives at Martal Group who drive business development for our clients.
Let’s take you through Robyn Orsini and Anand Pandey’s processes for bringing in new clients, and how you can help your sales and marketing teams start implementing these tactics today.
Develop an Account-Based Marketing Strategy
Since B2B buyers have more control over if and when they talk to sellers, mass blast campaigns have become increasingly less effective at obtaining clients. And while targeting specific demographics can yield a crop of customers over time, the journey from awareness to purchase can be full of sales droughts.
Many of the companies we work with struggle with this very dilemma.
To solve this problem, Anand Pandey implemented an account-based marketing (ABM) strategy that sky-rocketed his sales-qualified leads from 10 to 49 per month, for one of Martal Group’s clients. Here is how to get started.
Take a Different Approach to Building Buyer Personas
First things first, sales and marketing need to dive deep into each buyer’s personas. While most personas focus heavily on demographics such as job title, company size, and so forth, Anand’s success has stemmed from understanding the psychology behind the purchase.
Anand urges sales representatives to, “… go beyond features, functions, and benefits and understand what these folks are tasked with, what frustrates them and is keeping them up at night.”
Most of us would agree with Anand, but how do you gain such valuable information without expensive market research that involves a great deal of awkward bribing and prying to come up with actionable advice?
To understand his prospects, Anand turns to tech-based comparison, discussion, and review sites like G2, Clutch, Capterra, and Software Advice. In doing so he finds a plethora of insight straight from the people he wants to target without having to conduct focus groups or surveys.
B2B buyer guides, like the ones listed above, generally include demographic information of the person who wrote the review. Marketing and sales teams can cross-reference buyer personas with the reviewers to determine if the feedback is relevant to your target market.
Target Decision Influencers at Key Accounts
The average B2B purchase involves six to eight decision-makers. While we all would love to fill our calendars with c-suite sales calls it’s just not a realistic expectation.
Instead, Anand recommends creating internal referrals by targeting decision influencers who would benefit from your company’s solution.
This might seem like a long haul, but before you dismiss decision influencers, consider how difficult connecting with upper management can be. Emails and calls are often ignored or, more likely, intercepted and rejected by gatekeepers.
What if, instead of trying to push past assistants, your sales team could turn them into promoters of your products?
Here’s how it works.
When contacting decision influencers, salespeople should first acknowledge that procurement is not necessarily in the influencer’s control. (This eliminates the pressure for commitment.) Then the salesperson can ask to demonstrate the immediate value the influencer would experience by using your company’s solution.
This is an example of how Anand would communicate with an influencer:
“My understanding is most often your CIO has the decision-making and procurement authority to purchase a tool like ours. However, the reason I am reaching out to you first is that our platform demonstrates enormous value specifically to individuals with roles like yours.”
Taking this extra step to include influencers in the decision-making process increases affinity with your sales representatives while simultaneously building brand advocacy from within the target organization.
How to Make ABM Work For You
Now that you understand Anand’s ABM approach, we recommend starting by targeting 100 companies that match your ideal account profile.
Map out the organizational chart, including decision-makers and influencers. Have your sales and marketing team do a bit of online recon to establish a strong content strategy, and incorporate multiple sales channels to maximize touchpoints.
At Martal, we have found that outreach through an omnichannel approach results in higher conversion rates. Consider having your team connect with prospects through emails, cold calls, and LinkedIn.
And speaking of LinkedIn, let’s shift gears now and explore how social media can be used to increase your customer acquisition and drive down costs.
Savvy Social Selling
Robyn Orsini attributes a big part of her success at Martal to a refined outbound strategy on LinkedIn.
When asked how she nearly quadrupled her results, Robyn said:
“I was able to go from two sales-qualified leads in four months to nine in nine days simply by making success on LinkedIn a priority.”
Robyn further explained that through trial and error she developed a repeatable process that anyone with a Sales Navigator account and a bit of initiative can implement.
Below are the steps Robyn takes on LinkedIn to connect with the right prospects and set appointments daily.
Properly Curate Lead Lists Through Sales Navigator
“Where most salespeople go wrong,” says Robyn, “is defaulting to ‘lead filters’ in Sales Navigator because that is where LinkedIn automatically sends users. What ends up happening is sales reps target prospects with the right title working at the wrong companies.”
For more accurate results, Robyn suggests that sales representatives start filtering at the account level first. Once a list of companies to target is identified, then decision-makers that match your ideal client profile can be easily pinpointed.
After a well-curated lead list is established in Sales Navigator, notifications can be set up to alert sales representatives when a new match is found. As prospects that have recently accepted a new role are more open to alternative solutions, this can be a prime time for a salesperson to nurture a relationship.
Furthermore, Sales Navigator displays the LinkedIn engagement of saved leads and accounts within the dashboard for a quick and easy way to react or comment on prospects’ posts.
Get Laser-Focused on Prospects with This Overlooked Filter
There are quite a few underappreciated filters available on Sales Navigator, but the “keywords” filter has had the greatest impact on Robyn’s campaigns.
As Robyn explains, “Most people are using the basics (title, industry, etc.) but almost nobody takes advantage of keywords.… Keywords have led me to amazing pools of leads.”
Generic demographics help whittle down a lead list but can still result in poor prospecting. Job descriptions are better indicators of an individual’s responsibilities, relevancy, and potential purchasing power.
Better yet, Boolean operators can be used to further narrow in on prospects that are a perfect fit for your products or services. These Boolean operators include AND, NOT, and OR.
To put this in context, let’s say your sales representatives need to connect with IT directors that handle software integration but want to exclude anyone considered a consultant. After filtering by following the steps to properly curate a lead list, the salesperson could use the “keywords” filter like so:
((“Information Technology”) AND (“Vendor Management” OR “Strategic Planning” OR “ERP”)) NOT Consultant
Looks a bit like algebra, doesn’t it?
Similar to the order of operations, Boolean searches can be grouped and prioritized with parentheses. In addition, the quotation marks string together two or more words in a search term.
Aside from the formatting, we can see that the department along with correlating responsibilities can be isolated to create a laser-focused lead list after the basic demographics have been assigned.
Combining the “keywords” filter with Boolean operators can significantly decrease the time wasted targeting the wrong prospects while increasing response rates.
How to Make Social Selling Work for You
LinkedIn is one of the most affordable platforms to generate new business. Through Sales Navigator, your, sales team can curate accurate lead lists, communicate with prospects, and build authority in your market.
If you are working with more than one sales representative, consider breaking up prospects among team members based on accounts as there are limits on the number of connection requests that can be sent per week.
Because LinkedIn is a social media platform, it is perfect for pursuing an ABM strategy like Anand’s. Have salespeople taking a couple of minutes to sift through each prospect’s profile for engagement that can be linked to your solution and incorporated in LinkedIn or email messages.
That extra step to go beyond the pseudo-personalization tactics that most sales representatives rely on will help your team build rapport faster, and by proxy, will make acquiring customers easier.
The one big mistake that we see most tech sales leaders make is limiting potential by limiting strategies. Keep your options open.
Both of these techniques have proven to be productive: however, the best customer acquisition strategy focuses not only on bringing in clients at a cost-effective rate but also increases retention over time. By making every decision a step towards providing the best possible user experience, you will find that your customers will become your most powerful marketing asset.