This is the time of year when many small and medium-sized business owners, myself included, look carefully at their finances to see where they’re spending money, and what they can do to increase revenue and decrease expenses. For many small and mid-sized businesses, deciding if and how to spend marketing dollars is an ongoing dilemma.
A notoriously difficult number to ascertain is return on investment (ROI) for marketing initiatives. This is especially true for companies that sell to other businesses (B to B) or that have a relatively small group of clients. For example, the success of a mail campaign or a booth at a conference can rely on one potential sale. The same can be said for social marketing. It’s just too small a sample size to be useful.
For many years, we’d taken the “throw a bunch of things at the wall and see what sticks” approach to marketing. We tried direct mailing, cold calling, conferences, and networking. Sometimes we got decent leads, maybe even a client or two. Sometimes we got absolutely nothing. Although we never had enough data to measure ROI, we didn’t really need it. It was clear that the cost and effort of these endeavors were simply not worth it.
For us, there is only one lead source that mattered. Our clients. We’ve met virtually all our new clients through a referral from an existing client. I would guess that the same is true for many small and medium-sized B to B businesses.
This is nothing new. Many marketing books tout the “referral” as the magic bullet to grow just about any business. But for B to B businesses, asking your clients for referrals is unlikely to produce useful leads. It’s not that your clients don’t want to help you (assuming they think you’re doing a good job). It’s that they’re uncomfortable recommending you unless a friend or colleague is actively looking for your service or product. Financial motivation probably won’t make a difference, and if anything, can make people feel cheap.
We decided to redefine what marketing means to Cartwheel. Marketing to us isn’t about producing leads or closing deals. It’s about treating our clients really well. We know that if we treat them well and meet their needs, they will recommend us when it matters; when a friend or colleague complains about their technology issues.
Now, instead of spending money sending out postcards to strangers, we spend money making sure we have enough people to always pick up the phone. Instead of sitting at a booth giving away stress balls to bored executives, we give gifts to our clients. Instead of planning an ad campaign, we spend time meeting and surveying our own clients to see if they’re happy. SEO? No thanks. Facebook ads? Never.
So even though we still have no way to measure ROI, we don’t care anymore. We know that even if a client doesn’t refer us, every effort we make to treat our clients better is money and time well spent.