Which Hand to Avoid Biting?

Posted by AndyM on January 13, 2009 under Business Growth | Be the First to Comment

The classic phrase has been stuck in my head for the past week or so — “don’t bite the hand that feeds you.” In this environment where everyone is evaluating their expenses, from their personal cell-phone plan to the number of employees they have, marketing expenses invariably end up under scrutiny.

I think that is a good thing. Marketing expenses ought to be under constant scrutiny. But be careful. Each of your marketing activities (and you already have more underway than you think) is either bringing you business, or has the potential to. Do you know which marketing activities are your lifeblood? Do you know which ones are a complete waste of time and money?

When trimming back on your marketing expenditures, be sure not to bite the hand that feeds you!  How can you avoid that?  Here are a few tips:

Six Simple Words
“How did you hear about us?” Resolution number one for 2009 ought to be working this question into every conversation you have with a new prospect, every form you have a new client fill out, the web form you present to someone signing up for your newsletter, and anyplace else you have the opportunity.

If you are going to defer that newspaper ad campaign, hold off on that web site facelift you were planning, or think twice about sending out another direct mail piece, how do you plan to arrive at that decision? Can you predict how much business you will forego by canceling that effort?

Good for you for insisting that your marketing dollars work hard for you. No expenses should be automatic. If it doesn’t bring you a sufficient return, cancel it. Sounds simple, right? Well it can be. Step one is to be informed about what expenses and activities are bringing you business today. “How did you hear about us?” and a spreadsheet, paper log, accounting system, or even system of jars with beans in them will take you a long way.

In This Hand…
You say you’ve been tracking the sources of your business for a long time now — excellent! So you know which marketing efforts aren’t worth it, which ones have earned the right to more $ or effort, and maybe even have some ideas for new marketing tactics that will work for you. Right?

Well, you’re probably part of the way there. Calculating the amount of business that specific marketing activities generate for you can be tricky. Have you tracked the lifetime profit that each new customer provides? Have you accounted for the referrals that those new customers have sent your way? You may have run a series of newspaper ads 5 years ago that seemed like a complete failure — only 2 new clients. But are they now your best clients who have also brought you other business? Or were they bargain hunters that took advantage of a sale and disappeared?

The answer to what is working and isn’t working for you is burried in the data you have (or could be collecting). The answer to why something is working or isn’t working is more complex (and one of the things my clients hire me to figure out).

For now, ask the question “how did you hear about us” and begin tracking the answers to get smarter about picking which hands to bite.