8 Reasons Small Businesses Struggle to Get New Leads and Sales

Are you struggling How to generate leads?

This guide will teach you how to overcome common obstacles and increase the success of your business. By following the tips in this article, you’ll be on your way to a stronger marketing strategy to help you reach your goals.


Understanding the Importance of Leads and Sales for Small Businesses

Consistent lead generation is imperative for small businesses’ survival and growth in Today’s competitive business climate. Leads are potential customers who’ve expressed interest in your company or services. They are the lifeline of your business because they eventually convert into sales, helping your small business thrive and expand. Without consistent leads, your small business may fall short of its growth projections and long-term goals.



The 8 Most Common Reasons Small Businesses Struggle to Get New Leads and Sales


1. Lack of Marketing Knowledge

A sound understanding of marketing is crucial to design and execute effective campaigns. Unfortunately, many small businesses lack sufficient marketing knowledge, leading to poor campaign execution. They often underestimate the marketing budget requirements or miscalculate prospect reach and conversion ratios. A lack of understanding about SEO, social media usage, or the role of content could also prevent them from creating successful strategies that can pull in potential customers. Missteps in these aspects can lead to a significant waste of resources and, ultimately, a decreased lead generation.

2. Lack of Marketing Resources

Another crucial challenge is the lack of necessary marketing resources. Small businesses often operate with limited budgets, which hampers their marketing efforts. According to the U.S. Bureau of Labor Statistics, operations usually take precedence over marketing efforts due to the fundamental need to keep the business running. This lack of resources leads to a vicious cycle: to increase sales, you need impactful marketing, but for marketing, you need funds that often come from sales. This disparity can result in small businesses struggling to draw in new leads and potential sales.

3. Poor Targeting

Targeting is an essential step in marketing, where your businesses’ efforts are directed at a specific group of people who are more likely to convert into leads or customers. Poor targeting often happens due to an inadequate understanding of the target audience. If businesses fail to tap into their target audience’s interests, behavior, or needs, their campaigns may not resonate, leading to ineffective lead generation. According to a survey by HubSpot, approximately 44% of B2B marketers’ leads come from narrowly targeted personas – illustrating the crucial role accurate targeting plays in successful lead generation.

4. Poor Email Marketing

Although email marketing has proven to be one of the most effective forms of digital marketing, implementing it correctly can result in poor lead generation. According to the Data & Marketing Association (DMA), the average ROI for email marketing is $36 for every $1 spent, indicating its potency if well-executed. Issues such as not personalizing emails, sending emails at irregular intervals, and failing to provide compelling and relevant content can decrease email marketing effectiveness. In addition, if your email marketing strategy is outdated or not leveraging this channel, your business could miss significant lead generation opportunities.

5. Inability to Capture Leads

Capturing leads effectively is a critical step in the lead-generation process. However, numerous small businesses struggle with this due to a lack of strategic and practical approaches. From having a complex process for prospects to sign up for your mailing list to not having clear and convincing calls to action (CTAs) on your website, these obstacles can hinder capturing leads. Moreover, businesses often forget to optimize their websites and landing pages for mobile users, which can significantly affect lead capture. Google reports that 61% of users are unlikely to return to a mobile site if they have trouble accessing it.

6. Inability to Nurture Leads

Once leads are captured, nurturing them becomes a crucial next step. It involves building relationships with potential customers at every sales funnel stage and guiding them toward purchasing. However, small businesses often lack a streamlined process for lead nurturing. They might send irrelevant content, neglect regular follow-ups, or fail to engage with the leads, leading to a drop in conversion rates. According to a report by Marketing Sherpa, companies that excel at lead nurturing generate 50% more sales-ready leads at a 33% lower cost, making it an essential aspect for small businesses to focus on.

7. Lack of Consistent Lead Generation Efforts

Consistency in lead generation efforts is crucial for increasing and maintaining a steady influx of potential customers. Inconsistency can cause fluctuations in the number of new leads and impact revenue. However, many small businesses don’t commit to a consistent lead generation strategy due to time, resources, or a lack of understanding of its significance. Unfortunately, this results in periods without new leads, leading to potential sales loss and disrupted growth patterns. According to the Lead Response Management Study research, consistent lead generation has been linked to higher conversion rates, further emphasizing its importance.

8. Lack of Email Marketing Automation

Email marketing automation has become a game-changer with the rise of digital marketing. It allows businesses to send emails to their customers at scheduled times or based on specific triggers, making the process more efficient and personalized. Despite its benefits, many small businesses have yet to adopt this method due to insufficient awareness, technical know-how, or adequate resources. This results in missed opportunities to engage with leads consistently and could be the reason for struggling numbers. Early adopters of email marketing automation have claimed a significant advancement in their personalized customer journeys, according to a report by EmailMonday.



Solutions and Strategies to Overcome These Challenges

1. Invest in a Stronger Marketing Strategy

Overcoming the challenges of lead and sales generation begins with investing in a more vital, more robust marketing strategy. This encompasses understanding and defining your target audience, elaborating your unique value proposition, and navigating your competitive landscape. Also, it could involve identifying the proper marketing channels for reaching your audience, developing compelling marketing messages, and allocating a sufficient budget for a well-rounded campaign. As per the marketing consultancy company Marketo, a well-crafted marketing strategy can increase lead generation by 451%. Hence, investing time and resources in creating a comprehensive approach is essential.


2. Increase Awareness of Your Brand

Increasing brand awareness is a prime strategy to attract new leads and make potential customers remember your business. This could be accomplished through various approaches such as content marketing, social media advocacy, public relations, hosting webinars, and attending exhibitions and events. Establishing a robust and cohesive brand image across all platforms is also crucial. As the ‘Eight Great Ways to Build Brand Awareness’ by SproutSocial suggests, an informed target market is more receptive if they know that a solution to their problem exists, emphasizing the importance of brand awareness in creating opportunities for new leads and sales.

3. Connect with Your Target Audience

Connecting with your target audience is pivotal in turning them into leads and, eventually, customers. This means understanding their pain points, needs, interests, and communication preferences. Once you know your audience deeply, you can tailor compelling messages that resonate with them and attract their attention. Interactive content like quizzes, surveys, and competitions could be used to engage your audience effectively. According to a study by Marketing Week, a robust connection with the target audience could uplift sales by up to 64%.

4. Create Compelling Content

Developing compelling content is another considerable strategy to garner new leads and sales. Crafting content that educates and engages your audience can help establish you as an authority in your field, earn trust, and encourage leads to convert into customers. It could be blog posts, infographics, video content, webinars, or guides. According to the 2016 report from the Content Marketing Institute, well-executed content is recognized as an effective means of lead generation, with approximately 30% of marketers attributing their success to content marketing. So, investing in creating high-quality, relevant content should be part of your strategy.

5. Utilise Social Media Platforms

In the modern digital age, leveraging social media platforms can significantly help overcome lead and sales generation challenges. They are powerful tools for reaching wider audiences, driving engagement, and enhancing brand visibility. Depending on your target audience, choose the most relevant platforms (Facebook, Twitter, LinkedIn, Instagram, etc.) and share valuable, interesting, and interactive content. Also, engage with your followers consistently and respond to their queries promptly. The statistics from the Global Web Index suggest that 54% of social browsers use social media platforms to research products, signifying their importance in lead generation efforts

6. Engage Your Audience

Engaging your audience is critical to generating more leads and sales. This could involve responding to comments, hosting webinars, live streams, or Q&A sessions, running contests, or creating a community related to your niche. When your audience feels heard and engaged, they’re more likely to develop a strong connection with your brand, leading them further down the sales funnel. Social Media Today suggests that brands that engage with their audience on social media channels enjoy higher customer loyalty, which can, in turn, lead to an increase in leads and sales.

7. Offer Relevant Offers

Offering relevant incentives, discounts, or freebies can be a great way to attract new leads. These offers can create a sense of urgency or exclusivity, pushing potential customers to engage with the brand and eventually purchase. Examples include limited-time discounts, early-bird specials for upcoming products, or exclusive access to premium content or services. You can enhance their effectiveness by aligning these offers with your audience’s preferences and needs. Per a study by the Journal of Marketing, well-planned proposals can increase customer acquisition rates by up to 50%.

8. Leverage Your Existing Database

Your existing customer database is a gold mine for generating leads. Start by regularly updating and cleaning the data to keep it fresh, as outdated customer information can significantly hinder lead generation. Integrating your CRM system with other automation platforms can also boost your lead nurturing efforts. Encourage your existing customers to refer their friends in exchange for discounts or other benefits, and use personalized email marketing to upsell or cross-sell to them. According to a report by Invest, it’s five to twenty-five times more expensive to acquire a new customer than to retain an existing one, highlighting the importance of leveraging your existing database.

9. Increase Website Traffic

An increase in website traffic translates to a higher chance of generating leads. This can be achieved through strategies, including search engine optimization (SEO) to rank higher in search results, effective social media marketing to drive traffic from platforms like Facebook or LinkedIn, blogging about industry-relevant topics, and guest posting on high-authority websites. Leveraging pay-per-click (PPC) advertising can also help drive immediate traffic to your website. According to BrightEdge, over 51% of all website traffic comes from organic search, insinuating that focusing on SEO and other traffic-driving activities can significantly improve lead generation.

10. Develop a Lead Generation Process

A clearly defined lead generation process that aligns with your business model and customer journey can significantly improve your lead acquisition and conversion rates. This process typically involves identifying your target audience, selecting relevant promotional methods, deploying a solid call to action, creating an effective landing page, and nurturing the acquired leads to move them down the funnel. Automating parts of the process using a robust CRM or other lead-generation tools can also enhance efficiency and effectiveness. According to the State of Sales Report 2020-2021, respondents were 14% more likely to hit their coming year’s sales targets using lead generation software, highlighting the rewards of a systematic process.



Conclusion and Final Thoughts

1. Lack of Market Research

The lack of market research is a common challenge small businesses face when generating new leads and sales. Understanding the market landscape, your direct and indirect competition, and your target customer’s needs and wants are all critical components of a successful business strategy. This absence of detailed market research can often lead to missteps in marketing campaigns, product development, and overall business strategy. A survey conducted by CBInsights showed that 42% of startups failed due to a lack of market need for their products or services.

2. Ineffective Lead Generation Strategy

An ineffective lead-generation strategy can significantly hinder small businesses from attempting to attract new leads and sales. This can arise from poorly designed marketing collateral, clunky sign-up processes, unclear calls to action, or simply targeting the wrong audience. If the lead generation strategy is not regularly reviewed and optimized based on data-driven insights, it may become outdated and ineffective. HubSpot’s 2020 State of Marketing report illustrates that top companies are 3X more likely to conduct competitor research than others, indicating the critical role of effective strategies in lead generation.

3. Ineffective Marketing Strategy

An ineffective marketing strategy can harm any small business seeking to grow its customer base. This could be an ill-defined target audience, a lack of understanding of the competition, insufficient budget allocation for marketing endeavors, or a failure to monitor and refine marketing efforts continuously. These issues can negatively impact lead and sales generation efforts if not addressed, ultimately restricting business growth. According to the Small Business Administration, businesses with clearly defined and monitored strategies are 30% more likely to grow than businesses without a written marketing plan.

4. Lack of a Quality Website

In Today’s digital landscape, a quality website is essential to attract and retain potential customers. An outdated or unresponsive website can significantly affect your business’s online presence and hinder lead generation. Users expect seamless navigation, easy access to information, and aesthetic appeal when they visit a site. Google reports that 61% of users are unlikely to return to a site if they had trouble visiting it on mobile, articulating the importance of a quality, responsive website in generating leads and sales.

5. Inability to Convert Leads

A crucial challenge for many small businesses is effectively converting leads into customers. This often stems from a lack of effective follow-through strategies or failure to nurture leads adequately. Companies must focus on fostering relationships, understanding customer needs, and delivering personalized experiences to increase conversion rates. As per research by Marketo, improving the lead-to-customer conversion rate from 0.5% to 2.5% can essentially raise ROI from 100% to 500%, signifying the importance of this aspect.

6. Lack of a Systematic Follow-Up Process

Without a systematic follow-up process, businesses can miss opportunities to close sales. It’s common for potential customers to need more than one interaction before they’re ready to purchase. Following up efficiently and effectively can reinforce your brand message, provide additional value, and keep your business top-of-mind. According to DMA, nurtured leads make 47% larger purchases than non-nurtured leads, emphasizing the importance of a systematic, timely follow-up process.

Data: December 20, 2023