What Marketing Works?

What marketing did you do last year that really WORKED?

Do you take the time every January to evaluate your business the previous year? Do you know where your customers come from? What did you do to acquire them? (They are NOT a gift from God.)

Every January, I take the time to go through my accounting software and see what worked and what did not. I can then make this year’s changes based on educated facts from the previous year. Let me walk you through this so that you can start to do this for your business if you are not already.

How did your customers find you?

That is the question you need to ask EVERY new customer. For me, it is in the first conversation. I straight-out ask, “How did you find me?”. I then record that answer in my accounting software file for that customer. I want to know what business generating activities I am doing that are actually working. If something is not working, I stop doing that activity and do more of the top-producing activity. Here are the activities that I am tracking (you might have different ones):

• Networking: this can be Online or in person. These are things like networking groups, chamber events, association meetings, and something that I do in the community that puts me in front of general people.
• Referrals: are direct referrals from customers or other people I know.
• Internet: this is my website, search engine optimization, Online listings, reviews, etc. Any activity on the Internet.
• Social Media: I broke this out from the Internet because it has its own set of activities. This is time and interaction on any social media platforms.
• Existing Customers: for me, these are existing customers who want a refresh of their website that I already created in the past. They can also be existing customers that want an additional website.

Looking at the pie chart above, you can see that Networking is the winner for how my customers found me in 2021.

• Networking 39.6%
• Referrals 29.6%
• Internet 24.9%
• Existing Customers 4.4%
• Social Media 1.5%

Looking at these numbers, one might think I could drop existing customers (I would NEVER do that) and social media. But this is not the whole picture. Let’s look at a few more data items.

What Networking worked?

The pie chart below clarifies what networking groups I need to continue. But here is the MAGIC of networking, some of these groups I have not actively participated in for years. Here is the breakdown:

• WPN (Women’s Prosperity Network): is an Online networking group. Members are primarily self-employed women looking to meet other businesses. 2021 was my first full year with this group. It is one I highly recommend and will continue for 2022.
• ITTL (I Take The Lead): This started as a local networking group that has moved Online due to COVID. I have been with this group for over 16 years. I speak at meetings for this group and will continue for 2022.
• General Networking: this is the bucket of networking that is usually one-offs. This could be random chamber meetings, associations that I am not a member of, meetings that I went to once and did not pursue whatever reason. In fact, one of these people was a person I sat next to on an airplane about seven years ago. At 6.7%, I can afford to drop these things. This would allow me more time for higher percentage networking.
• DIY: This is a group that I was a member of for years, but I am no longer a member. The 1.7% was from past activity.
• CCLD (Clark County Leads Direct): This is another group that I was a member of for years. When COVID hit, they mostly disbanded. The 1.5% is from past activity.
• Wedding Group: This was a local wedding association that I would speak at once a year. They are no longer together, and I have not been associated with them for over three years. I was never a member, just a guest speaker. This group produced a long-term client that happens to be one of my favorite officiants.
• Bridges: This local networking group is no longer together. I was a member over five years ago for about one year.
• Urban Group: This local networking group is no more. I spoke at this group over ten years ago and magically created a website this year from a direct referral from that group.
• Lions: I am a member of Fort Vancouver Lions and do not attend with any business in mind. I will continue with this group because I like them and want to give back to our local community.

As you can see, looking at the breakdown of my largest source of income can give more insights. But this is still not the whole picture. What did it COST me for each of these referral types?

What is the Return on Investment (ROI) for each referral type?

What did it cost me to gain a client? Which referral type is the most profitable?

These questions need answering before a final decision can be made on what type of marketing is working for my business.  I can get expense information from my accounting software and assign the costs to a referral category. Some expenses are directly associated with one category, like networking group fees. Other expenses are overhead and apply to all types. For this, I got my overhead total, took the percentage of each referral category, and allocated the correct portion of that expense. See the chart below.

Which Referral Type had the Best ROI?

Networking had a 43% expense to income ratio. Internet was 27%, and referrals were 25%.

The highest income is from the Networking group generating 40% of the revenue, but it came with a price tag of the highest cost of 43%.  It results in the lowest income per person and the most time spent.

When I broke it down to how many people were in each category and how much it costs to acquire that customer, the most PROFITABLE referral type is direct referrals.

These three referral types combined make up 95% of my business.

Information Learned

1. I need to get my accounting software set up to give me all this information for 2022. For these numbers I had to export to Excel and add calculation formulas which took a lot of time. Spending time now on reorganizing my account software will save time in the future.
2. Networking: Generated 40% of income at the cost of 43% of the expenses.
   Referral: Generated 30% of income at the cost of 25% of the expenses.
3. What do I need to do this year to increase my number of direct referrals from existing customers and other people I know?
4. What can I do to decrease the expenses for Networking but not sacrifice my referrals from networking?

The post What Marketing Works? appeared first on Premium Websites, LLC.

Original post here: What Marketing Works?