Small companies are wasting time and missing out on sales by failing to turn business leads into concrete deals, a study suggests.
According to a poll by online marketing company TheSeed.com, two-thirds of business meetings fail to turn into real business in 70% of small companies, despite firms have a sales focus on winning new clients.
The reason behind this is as a failure to qualify and prepare effectively, with 58% of small firms admitting they have attended new business pitches without fully qualifying the prospect, and 40% saying they often attend meetings without having a firm grasp of a potential client’s budget.
The majority of respondents said they spent less than a day researching the company and preparing for a new business pitch.
“In the current market small firms have a range of techniques available to them for winning new business, everything from networking to pay-per-lead marketing solutions,” said Keir McConomy, managing director of The Seed.
“The secret for all of them is to qualify the prospect properly and prepare a pitch that meets the brief,” he added. “This will not only increase the chances of winning the business but will save on time, money and effort in terms of attending the pitch.”
Over a third of respondents said they had failed to win new business because they were unable to agree a price, while others pointed to an inability to fulfil all of the client’s requirements and a failure to fully understand the initial enquiry.
Three-quarters of small companies spent up to £500 a month attending new business pitches, the research added, and 35% of owners said they always attended pitches when a more junior member could do the job instead.
The survey also asked about where the majority of new business currently comes from, with 47% of small firms highlighting national business, followed by regional business (within a 50 mile radius) and then local business (within 20 miles). Just 8.5% of current new business comes from the international market.
“For many firms it can be a tough market but the growth of the internet is helping them to access new markets and opportunities,” added McConomy. “By targeting new business opportunities more carefully and investing in detailed qualification and preparation, there is huge potential to grow business in a controlled, manageable way.”