Sales are the force that keeps your startup going. Without leads and conversions, you won’t be able to generate any revenue and will have nothing left but to go out of business.
While most startups bet on inbound marketing tactics, it usually takes time and effort to get a steady flow of leads from SEO, content, or social media. Outbound methods, such as paid ads or cold calling, on the other hand, typically require substantial investment.
With all the costs you need to budget for when starting a business, there might be too little spare cash to burn.
So, you can either sit and wait for the inbound leads to start trickling in or find a low-cost way to boost your sales right away.
5 Low-Cost Strategies to Drive Sales for Your Startup
1. Ask for referrals from existing customers
Customer referrals represent one of the most effective (and low-cost) sales strategies that can get you a ton of high quality, warm leads.
On one hand, there are 84% of B2B decision-makers who start their buying journey with a referral. On the other hand, 87% of your customers would gladly refer your business to their friends, family, or colleagues. That’s a win-win situation!
Plus, referrals are extremely effective in terms of conversion. According to Marketo, leads that come through referrals convert at an average 10.99% rate (which is almost 3 times higher than inbound marketing).
In other words, don’t hesitate to ask for referrals. You can even offer certain incentives to motivate your customers to spread the word – it will pay off eventually.
2. Leverage your network
Your customers aren’t the only ones who can refer your business to their network. You can also seek cross-promotion opportunities with fellow startups. Such “quid pro quo” relationships can help you grow your annual revenue by up to 1,983% within six months with little to no investment as well as increase your visibility as a brand.
From Spotify/Starbucks to Amazon/Visa partnerships, there are dozens of successful examples that prove the point.
You can even build strategic partnerships with your competitors. There might be situations when you or your competitor can’t cater to the prospect’s needs for some reason, e.g. your product is tailored to a different industry or has certain limitations. In this case, you can direct the leads to the competitor/partner which would be more helpful.
For example, we’ve recently got a bunch of great leads from a competitor company. They were going out of business and, instead of leaving their customers to their own devices, decided to recommend a couple of similar products that could be a good substitute for their tool.
3. Level up your prospecting game
Prospecting is often considered the most challenging part of the sales process. Yet, sales teams that champion prospecting usually see 2.7 times more conversions than the rest.
The secret to effective prospecting usually lies in segmentation and targeting. With at least half of the prospects you are targeting being not a good fit for your business, it is vital to make sure you are focusing on the right people.
The way you prospect, i.e. overall strategy and channels you use, is another significant aspect that defines the success of your efforts. For example, cold emails require significantly less effort than cold calls and even can drive better results, according to 73% of respondents in research by DemandWave.
So, why spend a whole day dialling numbers and leaving messages on answering machines, if you can set an automated email campaign, including as many follow-ups as needed, in under an hour using tools like Reply?
Talking about your prospecting strategy, I would recommend using psychology to sharpen your pitches. From utilizing visual means and storytelling tactics to focusing on credibility and trust in your sales message, there are many brain tricks that can help you sell more and sell better.
4. Reduce churn
It’s a no-brainer that getting new customers for your business costs a lot more than keeping the existing ones (namely, from 5 to 7 times more, according to different sources). In fact, every lost customer might already cost you $243 on average.
So, maybe, it makes sense to focus on retaining the current customers in the first place, instead of looking for ways to attract and convert more leads?
To start with, try some of the proven tactics for churn reduction, e.g.:
- Identify and resolve the issues that cause churn.
- Offer proper onboarding and training programs.
- Create a solid cancellation process.
- Rethink your pricing strategy.
- Build an immensely valuable product.
- Streamline your internal processes
While it’s not an actual sales strategy, tuning up your internal systems and processes for optimal performance might turn out to be really helpful. After all, if your sales team is losing up to 65% of their time on routine administrative tasks that add no value, how can you expect them to reach the quota?
Obviously, a productive team is more likely to drive better results. And there are many ways to improve your team’s productivity – from battling the workplace distractions and fostering better collaboration to automating your sales tasks with the help of dedicated software tools.
The latter, in my experience, is a perfect representation of the “work smarter not harder” approach.
Be it a simple script that keeps your CRM data up to date or a sophisticated lead scoring tool powered by machine learning, automation can boost your sales productivity by 14.5%, drive 30% more deal closures, and cut your sales cycle by 18%.
Luckily, there are plenty of sales tools to choose from.
Final Thoughts
Of course, there are many more low-cost sales tactics you can experiment, take for example email marketing or press coverage.
However, there’s one thing you should always keep in mind when testing out different sales strategies – your metrics.
After all, how else would you know if your strategies are effective or not?
From customer acquisition cost and conversion rates per channel to your team’s key performance indicators, there are lots of data points you should be tracking. For example, comparing the cost of acquisition and customer lifetime value across your sales channels can help you understand which ones of them drive the best results.
As a result, you can save your time and resources by focusing on the top-performing tactics instead of investing in the ones that are obviously ineffective.
Great post! I love that you are applying traditional marketing strategies in a meaningful way. I think so many startups are done by entrepreneurs that are eager to get started but haven’t thought of the value vs need to make the business successful. I especially like the idea of leveraging your network to exchange referrals. It’s something that I would like to work on in my own business in the future.