When you think about marketing, do you think: “We rely on referrals and repeat business?”
I will respond first with a complement. If your repeat and referral volume is great enough that you can obtain enough business to succeed without real marketing effort, you are doing a great job. Too bad, unfortunately, because you are selling yourself short and may be throwing huge amounts of money away. As well, unless your referrals and repeat business are from a diverse collection of clients, you risk major problems if anything interrupts the referral/repeat business flow. You are especially vulnerable if most of your repeat and referral volume comes from a single source or just a few connections.
Realistically, in the architectural, engineering and construction community, you should on average expect at least 75 per cent of your business to be sourced from repeat and referral clients but if you don’t have a method of attracting the remaining 25 per cent, your business is exceptionally vulnerable to economic downturns and crises.
You need to promote your business and attract new clients through marketing and advertising.
Unfortunately, when you start marketing, you will immediately discover the new business obtained through organized marketing is more expensive than the repeat and referral business you’ve relied on in the past and often isn’t as high quality. Your initial reaction may be: “Why am I wasting money on this stuff? Any pundit, expert, consultant or (worst of all) advertising media sales representative will extol the virtues of their marketing methodologies and solutions but you will likely be disappointed at least initially in your efforts and think of the wonderful vacation you could have enjoyed with the marketing budget you just wasted (assuming you even bothered to develop a budget or plan).
So you will either likely do one of two things: Fall for another marketing gimmick, approach or methodology sold to you by someone or which you have learned about through peers or friends, or you will just fall back to relying on repeat and referral business.
How can I shake you out of this lethargy and repeating cycle? It won’t be easy. Even professional marketers fall into the trap. We jump for joy when we hear signs that people are referring and recommending our publications or media products and I’ve seen my peers suddenly feel an urge to modify their business based on inbound referral inquiries or complements.
My recommended strategies:
- Consider increasing your prices. Scary, eh, but if you have enthusiastic and loyal clients who are referring friends and colleagues, you may be able to increase your prices by 10 per cent or more and no one will mind. Your margins will certainly improve, however, and you’ll have the free cash flow to pay for your new marketing campaign.
- Start with organized systems to enhance and encourage referrals and repeat business. You should send thank you notes, have client appreciation events, take your customers out for lunch, publish an electronic newsletter, have a referral/reward system and if you can pull it off (and it is ethically appropriate) offer bonuses or incentives for referral leads (easily paid for with your price increase referenced above).
- Consider your associations and non-competitive businesses in other markets for ideas on how you can extend your scope with various forms of paid marketing, consulting and the like. You don’t need to reinvent the wheel and you may find a mentor who will share his or her insights with you.
If you implement these suggestions, you should be able to get beyond “relying on” repeat and referral marketing and you won’t break your budget.