Marketers spend much energy, time, money and thought on finding new customers. After all, the whole idea behind marketing and business development is to grow the business with profitable clients.
But often I think we forget the basics. Look at the data from the ongoing Construction Marketing Ideas poll.
With hundreds of responses, 30 per cent of architectural, engineering and construction businesses which have responded to the poll say they get most of their new business from existing customers.
That’s good, but the kicker is the source of most new business: Referrals and recommendations. This reaches 42 per cent of the total.
Now, I agree that not everyone recommending your business will have actually done business with you. You can set up referral exchanges, for example, with co-operating businesses and organizations. But while I don’t have the exact number, I’m quite confident that the majority of referrals you’ll receive will come from people and organization which were (or are) your actual clients.
Let’s see now. If 72 per cent of new business comes from referred business and current clients, then, where should you logically focus most of your marketing resources?
I don’t think you need to be a rocket scientist to see that an incremental increase in repeat or referral business would have a dramatic impact on your bottom line, especially since the actual cash costs for marketing to your existing and past clients is so low as to be absurd.
Say, you develop a customer service program; and design add-ons and added value services to increase your repeat/referral business by 10 per cent. Your volume would in effect grow by 7.2 per if the numbers are right — but if you spent money to achieve a 10 per cent increase through all the other marketing channels, you would see just 2.8 per cent for the same “results” (and at a probably far greater per-client-acquired cost.
I’ll share some thoughts in future posts to show you how to enhance your repeat/referral business, but you should see quite clearly that marketing energy focused here will produce far greater results than any external marketing you can contemplate.
Think close to home and you’ll achieve far greater results for your expense and effort than any external marketing campaign you can contemplate.
