Why Do We Keep Giving Away the Milk?

Being in the sales and marketing sector it I am often asked for advice. This ranges from reviewing someones marketing plans, recommending PR strategies and more often leveraging my network introducing someone to a potential customer or vendor. I came across this blog yesterday which really struck a cord.

Reprinted from the blog of Drew McLellan (http://www.mpdailyfix.com/2008/02/why_do_we_keep_giving_away_the.html)

“I was at lunch with a peer and friend the other day, telling her a story about how a mutual acquaintance had called me out of the blue to ask for some marketing counsel, which of course I gave her. My lunch companion said, "I hope you charged her."

Gulp.

I've been in the business for 20+ years. Owned my own agency for almost 13. I know better. But I still give away too much milk. And then I get frustrated when no one wants to buy the cow. I know I am not the only marketing professional out there who struggles with knowing when a simple conversation turns into a billable opportunity. Am I?

I'm not suggesting that I carry a time clock in my pocket and start punching in every time someone asks me a question over a cocktail or at a networking event. But when someone asks you to have coffee or if you "have 10 minutes" at what point do you know this has turned into a business transaction?

And, how do you gracefully let them know it has turned into a business transaction? I don't want to even think about how much money I have left on the table over the years because I didn't have the answer to those two questions.

Don't get me wrong. I want to be helpful. I want to be generous. I'm even okay with being an absolute fool now and then. But, I also want to be a smart business owner.

As Steve Lovelace said in a post on this topic: Nobody expects their architect to work free... so why would you?”

It is very disturbing to me that we are afraid to get compensated for doing our jobs. If your friend was a broker and you were buying a home through him who you expect him to forgo his commission? If you went to your friend the physician for a check up are you charged a fee? So why do we allow our assets to be given away for free simply because someone asks nicely? Is your knowledge in marketing any less valuable than the physicians knowledge of medicine. Your friend the broker gets commission simply for showing you a property.

This doesn’t mean of course that all your time is billable but it also doesn’t mean that you are running a pro-bono service either. And by the way, I don’t buy into the “what goes around comes around adage” as that was created by people who simply wanted something for free. In the situation above I would have told the acquaintance, ‘your situation sounds very interesting and it really merits more than a flip answer. Why don’t you come into my office so we could discuss the situation professionally?’ Now this is the litmus test; if the acquaintance isn’t willing to schedule an appointment in a professional manner than why should dole out counsel for free. Note that I didn’t explicitly say to charge the acquaintance – you could determine that at the meeting and whether there is an opportunity for some billable time. But, you wouldn’t expect you friend the physician to give you an off-the-cuff physical examination either.

It is important that we recognize that our human capital be it from an expertise that we have, to relationships that we have cultivated, are valuable and giving them away for free only serves to reduce their value.

Supplementing Your Income

At a local conference I got into a discussion with a mortgage broker dealing in commercial real estate. He confided in me that he hasn’t been selling much lately and was looking to supplement his income while still working in the real estate market.

I am hearing this question more and more often these days. And, it is a common problem not limited to a downturn in the economy. No matter how high one climbs on the workplace ladder, folks are regularly looking for additional or supplemental income sources. It could be the CEO of a large company that sits on the board of directors of other companies, to the administrative assistant who works on the weekends in a retail store. Man (and woman’s) inability to satiate material desires has created a secondary income market – not related to second income family but a regular second income for professionals.

Online marketplaces like eBay have made it easy for anyone (even an experienced and educated professional) to sell merchandise on the Internet. I know a successful executive at a big finance firm who is selling environmentally friendly light bulbs on eBay. I know another executive at a recruiting firm who makes extra income buying and selling used books online.

So, my advice to the mortgage broker is not to go out and start selling trinkets from around his house on eBay (leave your wife’s glass animals alone for now) but rather, focus on an asset you could leverage. Let me beat around the bush for a moment. I have around 20 years of experience in technology marketing. One would hope that my knowledge is an asset that I could leverage to not only create marketing strategies for my current employer but moreover it is an asset that someone is willing to pay for my advice, opinion or strategy. Not too long ago we would call this a consultant where a company would engage my services for one to three months and I would produce numerous reports, presentations, etc. Thanks to the internet there are “expert networks” where experts are folks like me (presumably far better) and the buyers are companies seeking to gain access to expert knowledge and experience. I signed up for one of these networks and lo and behold I was paid a few hundred dollars to give my advice on email marketing to an investment firm. I provided quality service (or at least I think so) and the buyer got what they wanted without needing to engage me with a retainer, out of pocket expenses, travel, etc.

Now, perhaps the mortgage broker isn’t an expert on urban affairs or corporate construction – nor would anyone expect one to be. But what a mortgage broker has that is valuable are top level relationships with numerous companies in numerous industries. As a broker, you have sold or are trying to sell to businesses of all sizes from startup companies to midsized to large enterprises; from travel agencies to law firms to high tech companies. A broker also has high level relationships inside these companies as they are dealing with the decision maker, the CEO, the owner or the controller. Don’t you think that there are companies, marketers and other selling professionals that would pay for access to these folks? What if you actually knew that your client needed to outsource the IT services or would be interested in getting a Coffee vendor - would that knowledge be valuable to the vendors that provide those services? We think so.

Salesconx has created a market for this very transaction. Mortgage brokers are a great source of warm leads and introductions to many small businesses and they are willing to spend money for simply getting an email introduction. Check out the hundred of posts of businesses seeking introductions in specific geographic area, or why not post up one of your past clients who would be open to taking your call. In the latter case you set the price for the introduction so why not take it for a spin.

You might not retire on the income you get from Salesconx, but a 5 minute email introduction it is certainly worth your time. We have a dental lab that is paying $50 for introductions to dentists and a telecommunications and security company in Illinois paying $500 to meet and close business with a company needing their services, and the list goes on. We have seen a mortgage broker post that their client needs an IT consulting firm and earned $200 after selecting 1 of the 4 companies that offered money for the introduction. These transactions are occurring daily with professionals just like you. And if you feel like you missed the boat well good news, the need for businesses to drive new business is also insatiable. See you online.

The top ten low-cost and low-risk ways to drive new clients for your business

All businesses share the challenge of finding new business. We recently conducted a survey of 700 small businesses. 43 % of them needed to add over 10 new clients a year. It should come as no surprise that $90 billion is being spent by businesses in the U.S. to grow (American Marketing Association). $20 billion is being spent in online marketing alone. The common marketing portfolio for a company includes advertising (online and offline), public relations, event marketing (tradeshows), client marketing (referrals) and telemarketing (cold calling). An effective marketing strategy will employ multiple initiatives under these areas targeting their customer/prospect segments. Each of these items is important (in different varying levels) to achieve marketing results. But, is there a way to achieve consistent marketing results without having the budget of a Cisco or a Microsoft?

Having been in technology marketing for nearly 20 years, I have seen various marketing methods emerge and some fall to the waste side (does anyone remember direct mail?). The Internet has also provided alternative marketing methods by establishing new channels to targeted customers. Our survey pointed out that most small businesses are not only concerned with getting good results from their marketing campaigns, but are also concerned with the high the upfront costs of these campaigns. With this in mind, here are ten low-cost and low-risk ways to drive new clients for your business. By the way, it goes without saying that you must have a clean website that provides enough of a user experience regarding your service and easy links to the appropriate calls-to-action.

My Top Ten

1. Client Referrals. Your path of least resistance to new customers is often from your existing client base. Assuming you are delivering quality work, getting a client to refer another client often happens without even asking. So why not ask? Put together a campaign to drive new client referrals offering incentives to your existing clients. Perhaps make a donation to their favorite charity, or discount on your service or even cash! Be prudent in tracking client referrals as it is likely that your best referrals will originate from the same set of clients. Always send thank you note, although I recommend David’s Cookies or Dale and Thomas Popcorn (a real office pleaser).

2. Blog yourself. While I know I am merely inviting you to join the myriad of people out there who are sharing their views, opinions and thoughts via the web, it really is a good way to get the word out there. Blogger and Wordpress are two free Blog sites that make it really easy to set up and publish your blogs. Blog regularly and more importantly make sure you publish your blog on your social network pages. Blogs are often tapped right into the search engines so even by doing nothing you are getting the word out there. (Check out Fastpitch Networking Blog promotion tools)

3. Inverse Public Relations. Have you ever read an article online and seen a trail of comments and responses to the article? Well, why not do that yourself (assuming you have something interesting to add)? If you are a subject matter expert (and even if you are not) why not add your two cents to topical articles. Include a link to your Blog or your web site in the response. Of course it is self promotion but it is promotion nonetheless (think about what this piece is for my company).

4. Socialize yourself online. Word of mouth is always a great way to drive new business. Working ones rolodex was often the terminology for the art of taking out ones rolodex and “dialing for dollars” – reaching out to your contacts to see who might be able to refer some business. Social networking and moreover professional networking has added a whole new dimension to managing ones rolodex. Networks such as LinkedIn and Facebook as well as niche professional networks such as BizNik and Fastpitch make it easy to establish an online profile and provide good tools for reaching out to your network. Join a group on Facebook or set up a live event on Biznik.

5. Face-to-face networking. Although there is a fee for the more popular networking groups, they are a great way to meet other professionals all of whom are not interested in sharing photos or videos but in growing their businesses. There are online versions of these groups such as Network for Professionals and a number of Meetup groups. Start a Meet up or join one inviting everyone to happy hour (on you of course). You’ll be certain to draw a nice crowd of likeminded professionals.

6. Web site optimization. Having a web site without it being optimized for search engines is like having an unlisted telephone number – both are bad for business. You need to make sure that people can find you. Go to Guru.com or eLance and find an expert in SEO (search engine optimization) and pay some money to make sure that your web site is posted across the internet.

7. Pay-for-Performance. If you don’t have the stomach to deploy a PPC campaign and wade through all the unqualified leads and responses, why not look into a pay-for-performance model. These are also called CPA or cost per acquisition. Usually the vendor will determine the price per successful lead acquisition. This could be paying only for leads that complete a registration process for instance. Salesconx.com (self promotion) also employs a pay-for-performance model which allows the buyer (the marketer or business) to establish the price for being introduced to a potential customer. Salesconx has one advantage over current CPA provides insofar as having no minimum commitments. This lets you get up and running very easily, quickly and inexpensively to closely monitor your return on investment.

8. Share the Wealth (Partnering). Aligning yourself with another company is a great way to “double up” on your sales efforts. If you providing expertise in X and a likely other vendor of your customer provides Y why not partner up with that company. Create an incentive for the other company such as a percentage of revenue generated. You could share clients and create targeted marketed programs reaching out to both your client bases. Maybe deliver a unified presentation or online seminar to draw the synergies of both your companies. This is generally an easy initiative to ‘kick off’ but often a bit harder to deliver in full. To make a partnership successful requires investment (mostly of time), so be patient. Keep in mind that your object is to add N new clients from this partner. So as long as you are meeting your objective it is certainly worth the time and money.

9. Expert yourself. Assuming you are knowledgeable in a certain field why not make your expertise available to others ‘free of charge’? For example, if you are a Tax specialist why not offer your community church or local library a free communal lecture on “Tips and Traps for Tax Preparations”. Many organization and institutions are regularly looking for topical content and experts, so why not offer these folks your services. My mother was an interior designer in her own practice and started out by writing articles for the local paper on low-cost decorating tips. If you are in the health sector try the local gym – they regularly have evening informational classes. Local chambers of commerce also have periodic meetings and often seek panel representatives. Any opportunity for you to speak in front of an audience where you look like an expert in your field is a solid opportunity.

10. Independent sales reps. If you believe that your product or service is easy to understand and relatively straightforward to sell, why not recruit selling professionals that are paid only on commissions. It wasn’t too long ago that most sales representatives were independent and there are presently 2.4 million independent sales representatives in the US alone. Granted most of these folks aren’t selling synergistic products/services, but it does demonstrate just how many folks out there make their money solely through sales. Try placing an advertisement in Craig’s List for independent sales reps in your industry or marketplace and see what happens. It does require a good amount of time to train and manage independent folks but getting a few more clients into the pipeline thru a commission only source is certainly worth the effort.

Well, there you have it. My advice is to try some of these methods, certainly the ones that take very little time to get up and running. As always with marketing, continue to invest in the initiatives that are delivering results but, always monitor your return on investment to stay ahead of the curve of diminishing returns.

How Could Social Media Have a Positive Affect on Your Business?

We are all hearing about the potential of social media for business. I am interested to learn what others find beneficial about the promise of social media.

Social media ranges from bloggers, micro bloggers (things like twitter), social networking and professional networking. Amidst the $20 billion spent on online marketing, social media has emerged as a new (and more importantly less expensive) alternative to driving leads for your business. Word of mouth has always (at least historically) been a great way to drive new business. In my last position driving marketing for an Internet Security Company generating $120 million in revenue, around 7% of our business was client referral business (happy customers referring us to other customers). We regularly tried to increase that amount thru online referral programs but rarely successful. Leveraging ones base has always been a regular sales/marketing initiative.

Social media provides us the opportunity to expand beyond our own base leveraging not only our network but the networks of others. Creating “buzz” in the social media environments is now on the forefront of any effective PR campaign (I have even spoken to companies just focused on social media buzz). Getting the bloggers to write about your product/service has even taken the path of pay-for-blogging sites like payforpost.com. The good news is that tracking the traffic is easier than ever and I would highly recommend you closely monitor your traffic to maximize your ROI.

In the end, it is the return on your marketing investment that should drive your decision making. While it’s always nice seeing your company’s name on a Blog, if that Blog isn't driving transactions on your web site or revenue for your company, then what is it really accomplishing? Marketing initiatives need to be persistent to drive consistent results. Keep in mind that once you start delivering results to the business the expectation for more always increases, thus the need for new initiatives to continue.