Preliminary research from ECSB’s study of Lifecycle Marketing suggests that startups are an important segment for small business sales and marketing executives to target. Specifically, when we look at first-time purchases across all supplier product categories, over 60% of first-time purchasers are buying within the first six months of starting their businesses.
What’s more, switching activity away from the initial supplier is quite low over time, suggesting that there is something special about that supplier who was there from the beginning. We see that owners’ attitudes and behaviors towards suppliers are developed early on and become increasingly difficult to change.
As enterprise executives assess the startup opportunity, there are additional preliminary data points that suggest startups make for good targets:
- Startups are a good long-term investment – Even accounting for attrition and businesses that fail, approximately one-in-five new startups acquired early will still be loyal customers after 10 years.
- Startups are looking for supplier information – Startups are always looking for information, as opposed to tenured businesses that search for supplier information when something breaks and needs to be replaced.
- Startups are not as industry oriented – Startups have common pain points and are less interested in industry-specific information, suggesting that targeting startups is not as nuanced an endeavor as targeting established businesses.
- Startups are less brand aware – When startups go shopping, they have fewer brands in mind and rely more on research to expand their consideration set.
- Startups are more receptive to marketing messages – Looking across all marketing channels, startups are about 40% more likely to follow-up with a supplier after seeing an advertisement or promotion.
Does your company have a startup strategy? What’s hard about it? Are you more focused on capturing market share from competitors? Help inform ECSB research by taking this short 5- minute survey and let us know. Select poll results will be presented at the 2012 Summit in Miami.
For more on startups and other important milestones in the small business lifecycle, join us at the ECSB Annual Summit in Miami Florida, June 4-5, 2012. This year’s topic is Small Business Motivations and Milestones: Tapping Key Windows of Opportunity Across the Lifecycle.