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Ask HN: how to acquire customers which are small businesses via internet?
59 points by tlogan on July 15, 2012 | hide | past | web | favorite | 26 comments
We are building a service to help small business manage data they have in the cloud. We got to point that we are profitable but growth is anemic.

We have the problem that somehow majority of people signing up to our service are not at all potential customers.

Majority of blogs and advices we got are actually about how to acquire customers in consumer segment.

There is very little blogs on how to acquire customers which are small businesses (real estate, etc.) via internet.

Any ideas?

Step 0: Verify that small businesses actually have a problem managing the data they have in the cloud, which is highly non-obvious to me.

After that, since small businesses don't think of themselves as "small businesses" but rather as "law firms", "hairdressers", "financial services", etc, you niche like crazy and target each of those with dedicated landing pages / etc. This, again, assumes that "law firm cloud data management" is something which anyone in the world is actually looking for.

To expand on the "niche like crazy" sentiment, you can use the service "Reference USA" to generate a list of customers for a given niche. It's an online database that will give you all the companies that fall under the specified NAICS code. You can then contact them individually and try to drum up sales.

Here's a small sample of the information you'll get:

* Business Name

* Address

* Contact Information

* Number of Employees

* Number of PCs

* Location Sales Volume (in dollars)

* Credit Rating Score

* Names of Management and their Titles

* $ spent on accounting

* $ spent on contract labor

* $ spent on advertising

And this information is all free to you thanks to your local public library. Here's how to get access to it:

1) Get the NAICS code for the industry you're selling to. This code is used by the government to classify businesses. http://www.census.gov/eos/www/naics/

2) Go to your local library to access the ReferenceUSA online database. You may even be able to do that through the library's website (I can through mine).

3) Click on U.S. Businesses under Available Databases

4) Customer Search

5) Enter the NAICS code in one of the boxes at the bottom of Business Type -> Keyword/SIC/NAICS.

Totally agree on step 0.

IME your limited resources for targeting hair dressers / law firms / etc... is still the old fashioned way: footwork, cold calls, trade shows, etc...

Do you mean "small business" in the federal definition which includes companies with up to 1500 employees and $20m in revenue, or the colloquial definition which is 1-5 employees in a home office?

The latter is closer to selling to consumers than businesses - you deal directly with the principals and they pay you directly. Some things I learned from selling IT services to these clients as a young entrepreneur:

1. They are frugal. $1000 is considerable sum of money to them (even if just psychologically). They are very wary of subscription services/increasing their fixed outgoings and prefer to just fix stuff when it breaks.

2. They care about saving money and saving time, in that order. Anything that does not contribute to the core business function is extraneous to requirements. They will spend money on things you can directly show will save them time/money. Selling backup services or preventative maintenance is difficult until they have a disaster and see how expensive it is to clean up.

Companies who have scaled this market successfully and should be studied are Vistaprint and GoDaddy. Hostgator, Hubspot and Wix/Weebly are also successful companies in this space who operate mostly online and with smaller budgets (ie. no superbowl ads, but scaling SMB marketing is still going to be expensive).

Any other good small biz web companies who have good marketing? I'm also interested in this space as it seems like there is a huge opportunity there, but after a few years of looking for the best way to target them I'm wondering if it's just a tempting mirage on the horizon - promises of untold riches, but you'll get dashed on the rocks trying to reach them.

> They care about saving money and saving time, in that order.

I don't think this is true. For most businesses saving time is more important than saving money, but with a big caveat. Your service needs to actually save me time, not save me time "once I change my business processes and learn how to use your service." So if your service can save time right out of the box, businesses are not only more likely to pay for it, but they'll also probably pay more.

Of course, a necessary precondition is whatever your selling needs to solve a problem businesses believe they have. So if you're not solving a problem businesses believe they have, even if you're giving it away, few businesses will use it.

The flip side is if you're solving a problem businesses believe to be important, companies are more willing to invest a lot of time if they believe the end state will be substantially better than where they are now.

Small businesses can be tricky for a number of reasons. The biggest challenge is that they are generally run by 1 or 2 people who are aged 40 - 60 years old, and these folks aren't online all that much as they busily running their companies. Add to that the fact that they may be distrustful of the Internet and things they find there.

Before you go crazy on channels online it might be a good idea to think through why they go online and what their intent is when they are there. Maybe its to socialize with friends/kids/family on Facebook, but more likely it is to do research or read the news.

Research = Search will probably play a huge role in your business getting discovered

News = PR is the way they're going to discover you without doing an explicit search

I would also go where the small business owners are - FORUMS! Find out where they are talking and get yourself and your company into the conversation. These forums and communities are usually segmented by industry: real estate, hospitality, restaurants, beauty, retail, etc. and then sometimes even sub-categories within that

My gut says you will probably have to combine online self-service sales with some amount of more direct sales to make this work. If you have something free that they can play with and give you their email for, then a followup email or phone call within 24 hours could go a long way toward winning them over (and you'll come to understand them better in the process)

One plan I used in the UK and it worked well, was to send every new UK company formed the previous day a letter detailing what we could do for them. In the UK there about 100-300 companies formed everyday that are discoverable via the companies house website. Obviously this requires a small amount of capital to send the letters but it is minimal.

On the subject of letters, I personally pay more attention when I receive a sales pitch in a letter rather than an email or phone call. I know it doesn't actually take a huge amount more effort, and companies can spam through the post almost as easily as over wires, but it just feels like they've tried a little harder to get my business.

Excellent idea. We know even the exact type of companies, so should be easy to get the list.

Are you aware of any online service which can automate for us sending of sales letters and brochures? Something like sendgrid but for letters / brochures.

I researched this idea a while back and found that Vistaprint has the automated sending service. I don't think it'll have the API approach of Sendgrid though.

There's also a whole industry of fulfillment houses for direct mail, but in my experience they're pricey and very traditional in their approach (sales-people, couriered proofs, no/printed analytics reports etc).

If you're going to do this regularly you can save a ton of postage by signing up for a business account with the PO and pre-printing the envelopes in a special format (although I always wondered if hand-writing would boost the conversion rate).

Also, try postcards rather than letters as USPS postcard rates + biz account will let you get your rates down to < $0.20/mailing - but sales letters may have a far higher conversion rate depending on your product, making them worth the extra postage.

If your in the UK, try Viapost.

Another thing I have done in the past is to target the companies that manage small businesses. In the UK there are many accountants that manage the books for their customers who are small businesses. So target them can help scale your customer base.

Agreed. I was in a similar spot (trying to sell online to local biz). I was walking door-to-door, meeting local businesses, and at one restaurant, the owner happened to be sitting with his social media guy. That guy opened doors at other local businesses that were his clients.

A lot of this depends on your location. In South FLorida, for example, you won't find the people you need on the net. Sure they're on FB and (maybe) Twitter - but for the most part you will need to be face to face

It also depends on "how small". Are we taking store front shops or companies with 50+ people? Small to me is a company with under 25 employees. But You might have a different idea.

Ok some suggestions:

1. The local Chamber of Commerce (not the national group, but the local one). You probably have a few in your city. Pick the biggest. Join and start going to the networking groups. You'll need business cards, by the way. Oh and since you mentioned Real Estate - The Chamber always has lawyers and Real estate agents in attendence . :)

The Chamber also hosts leads groups and other events where you can showcase your services.

2. Another example, assuming you selling to the geeks that work at these business, the local tech meets. In FTL Microsoft hosts monthly meetings/parties. Doesn't matter if you run MS or not. Everyone trolls through it at one time or another. A great place to be networking. Again bring, lots of business cards.

There are various other events. But really.. you have to go where your customers are.

Also, fine turning your google search is a good idea. But if you selling to this market, don't expect them to find you on google. In fact, they probably don't know what you do. So you gotta train your potential customer. The Chamber events are great place for this; proving to your potential customers why they need you.

Also if you selling nationally your best bet is to setup sales people in those areas who can work off commissions. Sort of what the local carriers do.

Working for a small business (as well as trying to target small businesses myself), I think this is all great advice.

I would add that you can't underestimate the non-traditional forms of marketing. Pick a sub-segment of your business. If you sell widgits, chances are some people specialize in dark green widgits from France. Find out if there is a French Dark Green Widgit Trade Journal, and see what their rates are. Find out if there is any specialized software which these people use, and see if you can talk to those vendors about advertising. In my experience, unless you're doing extremely specific Ad-Words targeting, most of the usual online "wisdom" is completely useless when it comes to targeting small businesses (which is tragic, since they're such a huge market).

I'm not sure official sales people are going to work, given that they're having trouble getting initial traction. I would think this would be more effective once they've gained some momentum.

Just like patio11 said: Make sure there is a need. How do you do that? Ask them. Call them up, introduce yourself, and let them know you are not selling anything. Get their permission to answer a few quick questions regarding your product idea. Do this with at least 25 businesses. The more, the better. Store their information for future campaigns.

Once you have validated the idea the real work starts. Yet you already have a group of people that validated your idea by stating that they do indeed need what you offer. Great.

This is where your marketing campaign starts. I would start by sending them a free informational package (can be an email) regarding the stuff you both talked about. Then send them a monthly newsletter about how other businesses like theirs have brought your product (and how they love it and couldn't live without it). Call them every few weeks to say hello and to offer them some limited time promotion. Just be nice, and don't be sleazy. I would suggest that you also send them a newsletter that has nothing to do with your product, but everything to do with them ( as a person). I've sent out newsletters about positive news, and people still ask if I plan to send more (or when).

Now, read patio11's post. Realize that there is no such thing as a small business. Just people doing a type of business. Don't market yourself as a "small business product", but as a law firm information technology expert or as a beauty salon technology consultant. Give yourself the title of expert in their specific niche, and let them put you on a pedestal. After all, you know your stuff. Nothing wrong with bragging. Adapt this technique to what I said above. Instead of sending out one generic newsletter to everyone, send one newsletter to law firms, one to beauty salons, one to mechanics, etc. The same newsletter, but with a slightly different design. Hire a low cost graphic designer to do this for you. It doesnt need to be fancy, just easy to read. Oh, and keep it short. 3-4 pages is enough. Use 14point font for easy reading.

Since you are programmers, you can really automate most of this stuff. Now, I suggest you get some part-time help with the marketing side of things. Dont try to do it all, or you wont do shit.

Good luck.

PS. Email in profile if you have any (short) questions. =)

A couple points. The first thing is that you need a systematic approach. This means trying to orient a lot of things towards getting traction. See it as a core aspect of how you think about your business.

Blogging is a good thing. Try to get your blog syndicated. Try to make your web site useful enough that your target audience comes back for more stuff all the time (think Amazon reviews here as something which has this function).

Don't be shy about hiring a real marketing firm either. Tradeshows are good but be prepared and make sure you put in the time ahead of time to ensure your marketing material is tailored to the audience at the trade show.

Pursue PR at every opportunity. Think of PR as something that infects everything your business does. (EDIT: Tech support is PR in a different context, for example.)

Also pursue strategic partners, even if that is with the competition.

Once you have a bit of a name for yourself, start advertising.

Hope this helps.

I'd look into figuring out which search terms your potential customers are using. And then targeting those words with AdWords.

If it proves to be effective, you could invest more time and energy on using SEO to target those words.

Also, how are your competitors acquiring customers? That would be a good starting point.

Been doing this for a couple of years. I've had some success using...

1. LinkedIn Ads - Expensive but you can setup the targetting options to show them to, for example, only: 'CEOs/Managing Directors/Owners of companies with 10-50 employees'

2. Business networking events - Not internet based but perhaps you could set up some kind of affiliate scheme?

3. Referrals - LOADS of our sales come from referrals. Try incentivizing or just asking your happiest customers for referrals.

4. Free workshops and educational events - Perhaps run webinars on how the cloud can help small businesses or what a CRM system is? Include a short and non-pushy sales pitch on your services plus a special offer for attendees only in the last 5 mins of the talk. We run seminars on marketing metrics and planning - people love them.

Good Luck!

I would assume you are looking at a self serve model for small businesses? Many of them are traditional in nature and might not be so savvy of using a cloud based solution.

Do you have a assistant program where independent agents can go and sell to small businesses and get a commission from you?

We are also building solutions for small retailers and (in our case being in India) we are doing direct sales.

Pivot and figure out how to turn the people who are actually interested in your product (aka "signups") into a revenue stream. In other words, you are getting your message across, you are just not closing the sale and it appears to be because you are focused on the wrong target market rather than monetizing low hanging fruit.

A good place to look might be at your competitors. If your product is better, easier or cheaper then that might be a good source of potential customers as you know they understand the problem and already have/maybe pay for a solution.

Here comes the non-shameless plug, BuiltWith TrendsPro might be a good tool to find these sorts of businesses.

Radius provides an excellent tool to make selling to small businesses easier: https://radiusintel.com/

They used to be Fwix, but saw this huge opportunity and shifted to saas.

You might want to ask this over here: http://answers.onstartups.com/

Facebook ads.

I would like to suggest the following: I am not an affiliate and have no vested interest in the services.

http://www.ericward.com/ http://www.urlwire.com/#FAQ

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