Repeat and referral or canvassing/telemarketing — two ends of the construction marketing spectrum

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Canvassing in columbus
Canvassing in Columbus with a former hockey player -- a memorable experience. Undoubtedly, door-to-door sales (uninvited) is one of the most irritating strategies. Yes, it works for some businesses but how many would really want to do this routinely.
pc plumber
A 2009 photo of Alex Lacek (left), with Leonard Megliola and David Callahan at the Bestline Plumbing offices in Gardenia, California (Los Angeles).

One guiding business principle: the 80/20 rule, asserts that most of your success and most of your problems arise at either end of the curve. You will find that 20 per cent of your efforts generate 80 per cent of your results, and 80 per cent of your problems can be traced to 20 per cent of the causes.

These observations suggest you can resolve many issues by focusing on the low-hanging fruit. Paradoxically, the low-hanging fruit may be at either end of the scale.

For example, our ongoing market survey shows that 72 per cent of business arises from repeat/referral clients. That number suggests that anything you do to encourage/enhance your repeat and referral results will have disproportionate value, and be achieved at relatively low unit costs.

Consider, for example, that you do $1 million in business and, if your results are anywhere near the norm, you have $720,000 from repeat/referral clients.

If you can find a way to increase your repeat/referral volume by 10 per cent through effective marketing, your revenue increase would be $72,000.

Now look at the other end of the table. Canvassing/telemarketing on average generate just five per cent of your business. You might be able to increase that number significantly with concerted effort, say to 10 per cent (a 100 per cent proportional increase) , which would see an additional $100,000 in revenue.  Of course, that is a big increase proportionately and if you haven’t used these bad-boy marketing methods you may find the clients aren’t to your liking, or don’t stick very well.

The question would be, would it be worth investing marketing dollars in a program to enhance repeat/referral business, or (if your business is suitable for telemarketing/canvassing) should you implement a program to attract new clients through these methods?

I think in most cases, your reward will be much higher with a repeat/referral system development, and it will be much less jarring, disruptive and painful to your business.  However, there are exceptions. Maybe yours is one.

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