New Customer Acquisition

Growth is possible only by means of consistent new customer generation, continuous customer orientation, and direct communication. Read here how you get your team in shape for new customer acquisition.

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New customer acquisition

How do I motivate my team for new customer acquisition?

Cold calling and canvassing by phone are tasks that sales employees like to avoid. Find out why and which possibilities you have to systematically build up your new customer base.

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New customer acquisition and cold calling in B2B sales: What is it about?

New customer acquisition – also called new customer development or simply customer acquisition – means all strategic measures that are used to increase sales with newly acquired customers. New customer acquisition can be “cold” or “warm.” This differentiation indicates whether or not you have already been in touch with the potential customer.

Acquisition of “warm” leads

For the acquisition of leads, for example, you use professional or private networks, associations, industry affiliations or joint partners. Recommendations marketing and management can also be used to “pre-warm” new contacts. We also speak of acquisition of course, when you win back inactive or former customers. The term is additionally used in some cases for cross-selling and upselling to existing customers.

Cold, colder, cold calling

Cold calling is the greater challenge compared to warm calling, as you have not established any contact with your customer yet. Meaning, the customer does not know anything about you or your company, your products and services yet. By phone calls, emails or personal conversations, for example at a trade fair, you can change this and convince him or her of your company.

Why does sales staff like to avoid new customer acquisition?

Even though businesses need new customers to grow sustainably, new customer acquisition is a task that many sales professionals like to avoid. This applies in particular to cold calling. Some escape into pretence activities: they need hours for research tasks or suddenly engage much more in the maintenance of customer data in the CRM system. Others seem tense. But what is the reason actually, for breaking a sweat, raising the pulse rate and frequent coughing before cold calls?

Understanding instead of ignoring

Even if your employees do not call it that: frequently, it is fear. The fear of rejection or failure. It is thoroughly understandable because who, after all, likes to get no as an answer countless times a day? Your sales staff can typically be confronted with a no at two junctures: with the “gatekeeper”, meaning the assistant or secretary, and with the decision-maker him or herself.

Cold calling is foremost about these challenges:

How do I get past the secretary to reach the decision-maker?
And how do I structure the first conversation with the decision-maker so that I will get yes for an answer?

These challenges are best mastered by your team when you show understanding for your employees’ fears and reservations and help them overcome these. Training and coaching is just as important as your role model function and clearly defined goals and timeframes.

Show understanding for your employees’ fears and reservations and help them overcome these by training and coaching!

What rates of success can my B2B sales organisation achieve in cold calling?

Rates of success or conversion rates in cold calling in the B2B sales organisation are dependent on various factors, e.g. the product or service, the price, industry and many more. In cold calling by telephone, it makes a difference of course whether the solution can be sold directly on the phone or if appointments for outside sales have to be scheduled first. In cold calling by telephone, the rate of success or the conversion rate equals the closing rate, i.e. the number of closings divided by the number of cold calls made. This applies analogously to direct mailings by post or email in which a product or service is sold.

“There is always a little wastage” or: the sales funnel

The more complex the solutions are, the more complex is the acquisition process as well. Conversion, meaning the conversion of an initial contact into a prospect and finally into a customer, often takes place over several stages. These can be described fittingly as a sales funnel:

At the top, many initial contacts are fed into the funnel. These are then qualified and worked from one stage to the next. For example, all qualified initial contacts are called. Your team schedules appointments for your outside sales force with a certain percentage rate of them. With a certain percentage rate of these, in turn, your outside sales staff can close contracts. What comes out of the funnel, therefore, are the contacts that you could acquire as customers.

Estimating conversion rates realistically

It is important for the planning and sensible definition of goals for your employees that you know your conversion rate and that you are also oriented on what is customary or possible in your market. Often, you can read about usual conversion rates of 1-3% in cold calling for all addressed target groups. However, this is only the lowest value to be reached according to our experience. From our perspective, it indicates a poor process, poor pre-qualification of the customer potential list and a poor briefing of the sales employees.

In comparison, our practice shows that with a good preparation of the overall process, conversion rates of up to 15% are attainable.

However, you may also only expect high conversion rates from employees, who have corresponding experience and fun selling, especially on the phone, who have a “sales gene” and who are well trained in it. If you approach an inexperienced and untrained team with expectations that are too high, you will ask too much of your employees and frustrate them quickly. You will then confirm the often existing fears of failure of your team. And cold calling becomes a “red rag.”

Practical tip: How do I plan the new customer acquisition process in B2B?

In the following practical example we will show you how to proceed step-by-step in the new customer acquisition in your B2B sales. Try out these tips with your team and adjust them so that they return the biggest success for your company.

1. Selection of new customer data or potential data

These data fields must be filled out:

• Name including company name

• Contact from the buying centre

• Central phone number – better yet, extension of the contact

These points are furthermore helpful and should be entered:

The website, email address, locations, number of employees, potential in euro or units, company sales and corporate structure/organisational chart.

Tip: External tools can also be useful for this. For example, Echobot Connect delivers a good data analysis, especially for the buying centre, sometimes even with phone number and title of the contacts.

Excursion: What is a buying centre?

Here you can look it up

All persons involved in the procurement process form the buying centre. The composition varies with purchase classes and purchase phases.

Analysis criteria of the buying centre:

By roles of the involved persons: user, purchaser, decision-maker, influence agents and gatekeepers
By fields of work: top company’s management, technical personnel, development and maintenance, purchasing, finance, sales, other staff members of the company, external parties
By type of competence of the parties involved in the purchasing process:
People with power: power promotors
People with technical competence: technical promotors

Source: Gabler Wirtschaftslexikon; Prof. Dr. Manfred Kirchgeorg, HHL Leipzig Graduate School of Management,Lehrstuhl für Marketingmanagement; https://wirtschaftslexikon.gabler.de/definition/buying-center-29360/version-252970, Revision of Buying Center of 15.02.2018 - 15:05

2. Employee training for cold calling

Tips for the caller of how to speak with the contact in the outer office to be put through
For the conversation with the decision-maker:
1. Sentence on the subject matter: How do you make them curious?
2. Requirement analysis
3. Handling objections
4. Potentials analysis: What are the typical open-ended questions about this?

3. Defining goals and timeframes for new customer acquisition

Selection of fixed days and times for acquisition
1. Differs depending on industry and type of decision-maker
  Examples: craftspeople early in the morning or early evening, production managers before 10:00 AM or shortly before/after lunch
2. Never schedule more than 2-4 hours for pure acquisition but do nothing else during that time!
Define quantitative and qualitative targets
1. Calls completed per time unit
2. Calls completed with the buying centre or the decision-maker per time unit
3. Set a target for to-do after the call
  Example: 30% of all buying centre calls lead to a follow-up action, e.g. appointment, second phone call, talks with further contacts
4. “Send me something about this by mail” critical sentence
  A mailing comes into consideration only if the specific particularities in a good conversation, e.g. potentials analysis of the target customer can figure into the documents
5. How often should the new customer be called?
6. If not reached, it is followed up at most seven times
7. Secretary yes/decision-maker no means follow up until a very clear no comes from the secretary
8. Start the reporting of the defined goals

4. Start an Excel or CRM database

Transparency and measuring of success are usually only possible with a CRM database

New customer acquisition: organising it internally or outsourcing it to a sales service provider?

Systematic new customer acquisition can generally be operated both internally as well as externally:

Internal

For an internal model, you should pay attention that your team actually adheres to the procedure that you have defined jointly with them. Your employees will need training. Moreover, there has to be a person responsible for the project, who supports the employees and also leads by example in all facets of new customer acquisition.

External

If there is an external sales service provider involved, the training effort for your product or your solution is initially somewhat higher externally at first. But the advantages are overriding: For example, the service provider is strongly focused on the activity of “new customer acquisition.” This means: the external employees “do not do this for the first time.” They have vast experience from similar acquisition projects. In addition, measuring success is significantly simpler if there is an external partner than in an internal setup. This is ideal for you to make the new customer acquisition plannable and scalable.