Andrews Promotional Group Blog
Cost per call. Are referrals really free?
Friday, 19 December 2008 16:18

I had a very interesting conversation with the owner of a local plumbing service company.  He is doing a great job of tracking the cost per call (ROI) for his marketing.  He had daily statistics and looked at them regularly.


This company has three main sources of business:

  • Past clients or referrals from past clients

  • Yellow book advertising

  • Pay per click advertising with Google

He considered the past clients and referral to be "free" sources of business.  He advertised in several different phone books and had a unique ad code in each ad.  His call screeners ask everyone who calls for the "code in the corner of the ad."  This way he is able to track how many calls each ad generates.  His pay per click traffic that generated calls was also tracker in the same way.


With no current cost for past clients it is just icing on the cake.  Spending over $250,000 a year for yellow page advertising, he mentioned that his average cost per call was somewhere around $400 (Better hope that is an expensive call.)  The Pay-per-click was right around $28 a call (pretty decent conversion at just over $2 a click.)


Looking at the comparison between the phone book and the pay per click, it is obvious that, at least for this business, print is dead.  But there is also only so much that pay-per-click can do.  With only 100 or so clicks a day, how else is this company going to increase their business.  The other avenues of print and signage (billboards and bus signs) is saturated and the cost even higher than the phone book.  What are they to do?


As a marketer my mind jumps to those past clients and referrals.  How/what is the best way to activate/inspire them when they need or know of someone who needs plumbing services.  Top of mind awareness, our plumbing service company needs to be the first thought they have when they think of plumbers.  So beyond great customer service (Not to ever be discounted or overshadowed by marketing) what can this business do to increase that "brand awareness?"


It is really the simple things that are often the most effective.  What would happen if there was a promotional magnet or a sticker on every hot water heater that this company had ever serviced.  Or how about if they had little removable plastic key tag hanging off the drain line of every sink in every kitchen they had been into?  What about a sticker on the underside of the toilet tank cover?


These are really simple ideas, but it is all in the execution of having every plumber place these or hand them out to every client they see.  What program do you wish you implemented 5 or 10 years ago?  Start that program now!  Plan for the next 5 or 10 years.

 
 
What if you only had 100 prospects?
Friday, 19 December 2008 16:18

We work with a equipment manufacturing client (to remain nameless) that used to spend several hundred thousand dollars on print advertising.  They ran ads in specialty trade magazines.  This money was spent year after year, month after month.

How do you calculate ROI for a Brand?  This is a question that has baffled marketers for years.  Sure you can measure the effectiveness of advertising with a call to action, but how do you measure the affects of name recognition.  The Big companies use focus groups and surveys, spending large sums of money on marketing research.  For the larger brand name companies this is relevant and accurate.

But what if you are a smaller brand or better yet what if you only serve a niche market and the larger market has never heard of your product.  How do you measure the ROI on your brand then?

The unfortunate fact is that many companies large and small make this calculation by dividing their revenue by their expenditure.  This does give you the ROI of your total spending.  But does it really tell you what is working or not.  This leads us to the time old saying that, "50% of your advertising is wasted money.  The problem is that you don't know which 50%."

Back to our equipment manufacturing client.  They took a look at who their actual buyers were, how many of them there were, and what really had an impact on them.  For this company there are under 100 buyers/pen wielding decision makers.  The contracts are large and the prospects few.  The question our client had to ask themselves is, "Is print the right way to reach our 100 prospects?"

The answer was a resounding NO.  Why were they putting their name in front of the masses when their are only a few decision makers and they even know who the decision makers are.  If not print then what?

When you know the names of your potential customers and it is a manageable list of prospects, it is better to use a sales force to build relationship with those buyers rather than throwing money at the masses.

Our client took that money they used to spend on print and created opportunities for relationship and events to make contact with their buyers.  A couple of fancy retreats a year, several golf tournaments at exclusive resorts.  This one to one interaction with their prospects significantly increased the bottom-line and even reduced the marketing budget.  Plus the sales force gets paid to hob nob and play at fancy courses and relax at great retreats.

At these events the attendees would be showered with personalized gifts and branded merchandise.  Golfing shirts and other accoutrements all with our clients logo subtly but visibly decorated on the product.  So instead of wasting impressions on non-decision makers.  The impressions were personal and lasting, not to mention targeted.