Most new business owners come to a point in their business growth where they hit a revenue ceiling. This can be due to several issues, but for many, it’s simple: new customer acquisition.
When it comes to customer acquisition, the typical progression for a young (but successful) business is:
- Sell to people they know
- The people they know introduce your brand to friends, family members and colleagues who – if the product delivers – become faithful buyers as well
- This works for a while and things are great
- Then, revenue levels off; they hit a growth ceiling because they’ve reached the limits of their friends and family network
- They come to the realization that in order to continue to grow, they must find a way to reach PAST their network
Why Friends and Family Networks are So Valuable
But it’s worth asking: exactly why are friends and family networks so valuable for new businesses? There are four factors that make them valuable
- Trust: Friends, family and colleagues are more likely to trust each other’s opinions. There is social capital or value in referring somebody to a great business, so people tend to do so with care
- Communication: Friends and family talk to each other, at least with some regularity and at some length. Communication is key for ideas to flourish, whether that be at the grocery store, on the phone, text, social media, at the gym or at work.
- Knowledge of preferences: The better we know somebody, the more we know their likes and dislikes. What they are actively seeking, what they would be open to trying – and what they will almost certainly reject or avoid altogether.
- Shared Contexts: Friends and family networks are varied to be sure: a grandpa and his grandson are likely into very different things based on their stage of life. Still, the fact that two people are friends, family or colleagues usually means they have one or more things in common. These “things in common” boil down to what marketing folks call demographics, psychographics and behaviors, where:
Demographics: Age, income, rural vs. urban living, stage of life, etc.
Psychographics: How they look at themselves and the world
Behaviors: How and where they shop, which type of media they consume, and where they work (or if they work at all)
And this should make intuitive sense to marketers and non-marketers alike: people who know each other will tend to have more in common, know each other better, and communicate with each other consistently compared to when they don’t.
Warm vs. Cold Leads are Actually on a Spectrum
Understanding these advantages reveals why the shift to cold outreach feels so difficult.
Marketers and sales teams think about and approach lead generation based on the lead source. They reference leads as warm or cold.
As a business owner, we can look at friends, family and work colleagues as warm leads and everyone else as cold leads. Warm leads are warm because they are already “warmed up” – or more inclined naturally convert from prospect to customer once they have heard your message.
But with cold leads you are starting “cold.” Think of it like trying to sprint before you’ve stretched and warmed up.
In reality, the distinction between warm and cold leads is not so cut and dried. Every prospect you meet is somewhere on the spectrum from “ice cold/never going to buy from you” to “super hot/where do I sign up?.”
How to Warm Up Your Cold Leads
So, back to our original question: if you are a business owner and have run through your stock of warm leads, in order to shift gears into your next phase of growth, here is how to warm up your cold leads.
Remember the four factors that make a lead warm are:
- Trust
- Communication
- Knowledge of Preferences
- Shared Contexts
Applying the correct levers to each of these factors in your marketing, sales and customer interface points can help shift cold leads to feel more like warm leads, even though they are technically cold leads in the traditional sense. Some pointers:
To Improve Trust
- Offer social proof, such as testimonials and case studies
- Be transparent about your process, products and services
- Show them what it’s like to work with you
- Be clear around your pricing
- Make sure you are reviewed frequently (and positively) on top review websites
To Foster Communication
- Speak to them often
- Communicate to them where they hang out and spend time, both at work, at play and during downtime
- Leverage multiple communication channels to speak with them: ads, social media, your website, connected TV (CTV), and more
- Use language they would use in your advertising, on your website and in your informal messaging
- Use tools like email wisely: over-communication can hurt you as much as under-communication
- Be very clear about what they need to do to get started or buy now
To Leverage Knowledge of Preferences
- Show them you understand their pain and that you can help
- Validate their goals, their motives and their intentions
- Reference their broader lifestyle habits (beyond just what relates to your products and services)
- Delight them with offers that indicate you understand their real motivations, such as: saving money, improving status, having nice things, investing in quality, being a prudent buyer and more
To Leverage Shared Contexts
- Share examples of your ideal customer in real-life situations doing real things
- Build an elaborate ideal customer profile (ICP) so that you can more deeply understand how they live
- Show pictures of real people using your products and services
The next best thing after friends, family and colleagues buying from you is converting cold leads by warming them up before you ever even say hello.
Try these tips for improving your sales and marketing activities. Reach out to the marketing experts at Ambient Array. We have helped hundreds of brands break through their revenue ceiling when their friends and family networks ran dry. Find out what we can do for you.