Lead generation is the primary constraint in revenue generation for small businesses.  If a small business is struggling with sales, nine times out of ten the problem is lead generation.  The struggling company is surviving but sales revenue is either a feast or a famine.  When income statements are reviewed, the struggling small business will have peaks and valleys in sales.

What causes the peaks and valleys and why is lead generation such a problem?  Typically, the struggling company doesn’t develop a direct, reliable, and affordable method of lead generation to add enough new cycles to grow the company.

Some businesses perform better with relationship marketing such as real estate, engineering, lawyers, and architecture.  Relationships take a long time to build.  Networking can create introductions but only time and effort builds relationships. New businesses starting out don’t have the luxury of a lot of relationships to fill the sales funnel.  The business can’t rely on relationship selling for a long time.

Networking, referrals, and word-of-mouth are the primary lead generation tools of small business.  Unfortunately, these methods are uncontrollable.  The salesperson doesn’t know who’s going to show up for a networking meeting.  Often half of a work day is spent attending a networking meeting that produces little if anything.  A business never knows when the next referral is going to land. It’s hard to rely on marketing methods that are uncontrollable and can consume a lot of sales time.

Advertising such as newspaper, television and radio are beyond the means of most companies.  Direct mail can be affordable but it’s difficult to master.  Most businesses are undercapitalized and must rely on personal sales people to generate sales.

Internet marketing has some potential and can be inexpensive.  Organic marketing using search engine optimization techniques to rank high on Google takes time.  You also must have the right type of product or service for it to be appealing. Social media probably gives small businesses the most control if they are willing to spend the time and effort.

Finding the right combination of effective and affordable lead generation is a primary constraint for small business.  It’s a tough issue to solve and one that a business must solve if it’s to survive and become profitable.

A startup distribution company had a new product with some great potential.  Like all new products it was initially difficult to get sales.  After a year of being on the Internet and getting referrals from the manufacturer the distributor was starting to bring in revenue.  Search engine marketing increased its Google rank to the top ten results and that helped bring in more traffic and customers. The business needed something more than referrals, word of mouth and search engine results.  Revenue wasn’t growing fast enough.

The real problem was the product itself.  It was an industrial type of product that didn’t require the user to purchase much.  For most applications only, a quart would be required.  At the most, a gallon might be needed.  It didn’t take long to figure out the company would need a lot more customers if the purchase amount was going to be small.

The marketing solution was to find markets where the product would solve large problems instead of small problems.  Large problems required more of the product be purchased to solve the problem.  New solutions were identified for the product and new target markets were developed.  Direct mail, telemarketing, email, and web presentations were implemented to provide immediate marketing penetration.  Within weeks the company landed its first large project.  It was the difference between a $200 sale and a $10,000 engagement.