B2B Sales : How do you deal with high customer acquisition cost when selling to SMEs ?

Customer Acquisition Costs should, like any other cost, be factored into your pricing. I.e. you have to estimate what it is going to cost you to acquire a customer, and build that into your business case.

In the initial phases of a business your cost of customer acquisition may be much higher. Here, you have the option of estimating what the eventual cost of customer acquisition be at scale, and include that into your costing. In this case, you will be making lesser margin per sale than you would at scale, but you will be able to price your product closer to your eventual selling price and not make initial adopters pay for inefficiencies of smaller scale.

On the other hand, you may take a call to load the entire higher cost of initial customer acquisition on to the customer.

Of course, you should try to continuously reduce the cost of customer acquisition. Apart from direct sales, here are things that you could try:

  • Be present in conferences and seminars where your customers are present – ideally, try to get a speaking slot on a panel
  • Write a blog or a ‘though leadership’ piece in an industry relevant publication
  • Make sensible comments or write sensible answers on questions on LinkedIn groups
  • Use PR well… celebrate your early successes [early adopters are the most difficult to get, but post that many more customers are usually comfortable trying out a solution when they know that others have tried
  • Request your initial customers to be your brand ambassadors – get testimonials – publish those with their photographs on LinkedIn and your official Facebook page – tag these early customers – of course with their permission

Invest in creating well-designed communication material – digital or printed. Practice your pitch well – focus on the value proposition, not just product features.





Author: Prajakt Raut

Prajakt Raut is the founder of Applyifi.com, and author of the book for startups - ‘Starting Up & Fund Raising’ Prajakt personal goal in life is to encourage and assist a 100,000 people to become entrepreneurs. _____________ Prajakt is the founder of Applyifi - an online platform that provides startups a 36-point scorecard and assessment report on the venture's investment readiness [www.applyifi.com], and helps them improve their odds of getting funded. Prajakt is also the founding partner of The Growth Labs, a platform where growth-stage companies get sharp, incisive advice from senior professionals and experienced entrepreneurs. [www.thegrowthlabs.in] Before starting Applyifi, Prajakt was the head of operations at IAN, founding member of a leading incubator, and the Asia-Director for TiE (2004 - 2007). Previously Prajakt had co-founded Orange Cross, a healthcare services company, and was part of the founding team member of Idealake Technologies. While in college Prajakt had founded a printing business and has spent over 10 years working in leading advertising agencies. Prajakt’s book, ‘Starting Up & Fund Raising’, helps startups understand an investor’s perspective, and helps them improve their odds of getting funded. The book also helps entrepreneurs understand the building blocks of a business.

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