You might think that this is a fairly obvious thing to do if you are in business but market research I carried out last year proved that most established companies get most of their business from existing business and referrals; in fact the average was 70% of new sales.
There are many reasons why you should not consider new markets, here are just a few:
- Referrals and repeat business work are much more profitable
- The conversion rate is much higher
- New markets can be risky and expensive to explore
I agree with all of the above and would go as far as saying that if your business does not get at least 50% of its new sales from referrals and repeat business, something must be wrong. There is no denying that when you call a prospect who was referred to you, it’s a much nicer conversation which does not require you to get out of your comfort zone.
So why should you explore new markets this autumn?
I believe that generally, your business always needs to be moving forward because standing still is not an option. But at the moment there is a very pressing reason to consider exploring new markets because whatever you think of Brexit, it will affect the UK market greatly. This may well mean that many companies will have less money to spend and will therefore cut back on purchasing, affecting the rate of your repeat business. This might also mean that by default, you will therefore need to work with more companies in order to preserve your sales revenue.
You might still wonder why this means that you need to explore new markets and you will be right because new business can come from two main sources:
- Working with more companies in your existing market
- Working with more companies in new markets
Both will work and both will require you to go out looking for new business you don’t already deal with. Whichever way you choose to go, you need to consider two important factors:
- Developing new business can take time to mature, anything between 6-12 months.
- The longer you leave it the more competition you will have
This is why I recommend that you look into this urgently to make sure that you can start widening your options and developing your sales pipeline. We have recently developed a new lead generation system which we believe can support this process well. Click here to find out more.
You may have heard of the Maslow Hierarchy which shows how our needs as humans develop as we become more established and comfortable. In the middle of the said hierarchy, just above food and shelter, sits security which most of us see as key to our lives. We can spend some time arguing about whether we can ever truly be secure, but I wanted to discuss one of the key elements of your business security: your pipeline.
Regardless as to whether you run your own business or the sales team within a bigger company, developing your pipeline is key to both your security and growth:
- Without a pipeline, you will struggle to forecast the future of your sales which affects all major business decisions
- Pipeline development helps you tackle your growth strategy, from immediate to further opportunities, existing and new markets
Despite its importance, many of us treat our pipeline development rather carelessly, leaving most of it to faith. Typical approaches include:
- Relying solely on repeat business and referrals
- Frantically looking for leads only when levels of sales have reduced dramatically
- Running a variety of lead generation tactics without focus or strategy
- Trying to convert any business that comes your way
This approach will either leave you with a small pipeline covering only immediate opportunities or a very large one full of long-term possibilities and pies in the sky. If you wanted to truly use your pipeline as a tool for growth and development, you need to have one which includes long term suspects which are being nurtured and developed into mature prospects, which will turn into customers. To achieve this, you will need to establish three things:
- Have a good understanding of your target markets
- Create continuous, relevant communications to create interest
- Follow up with your suspects and prospects continuously
Follow this, and you will end up with a funnel shaped pipeline like this one which is aimed at creating new opportunities in your desired markets and developing them into sales. You may already be doing this or a part of this but now is a good time to review your process and ask yourself if you and your team are getting it right. Economic uncertainty, like that which we are currently facing, can change market conditions, meaning you end up with less repeat business and referrals so make sure you are developing a strong pipeline to tackle it.
As always, we are happy to help and discuss your individual circumstances so get in touch.