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Sunday, November 02, 2008

Which will give you better return?



Here are additional details about the ongoing Construction Marketing Ideas poll.

If you could allocate $10,000 with the goal of achieving a 10 per cent increase in results on a $1 million business, would you achieve better results by improving your client service/employee systems to attract more repeat and referral business, or should you advertise, telemarket/canvas or spend it on leads services?

The ongoing Construction Marketing Ideas poll shows that, at present, 76 per cent of businesses find most of their new business through repeat and referrals. This means, your $10,000 investment in increasing your repeat and referral volume would generate on average $76,000 in new business (assuming a 10 per cent gain.) Compare the results for a similar investment in telemarketing/canvassing -- your return would be $6,000.

Of course these numbers are misleading for two important reasons:

First, if you have built our business around advertising, telemarketing and leads services, you are undoubtedly using these resources effectively and profitably, or you would stop.

And, secondly, if you are using these resources, if you convert the new clients into long-term customers who speak highly about your business, you'll garner years and years of valuable business from each lead you convert through the resources among the 24 per cent.

Nevertheless, it makes sense for you to consider improving your processes and systems to encourage repeat and referral business before you spend significant sums of money on other forms of marketing.

2 comments:

CDC News said...

I work for a construction lead service company, CDC News (www.cdcnews.com)and am very interested in these results and would love to learn more about how lead services can go beyond just providing leads and offer ways to assist you in getting business. Referral section? Any ideas or thoughts you have about lead services are welcome.

Mark Buckshon said...

I look forward to exploring these issues with you further in a conversation. Not sure if, as a leads service provider, you should try to be anything other than what you are -- true referrals come from meaningful relationships and reputation; as a leads service you can obtain that through the word-of-mouth reference about your leads quality (but there is a paradox here in the more clients you have for the same number of leads, the more competition there is to execute them, and thus their 'value' individually declines.