Where Are You Doing Things Half Way?
Recently I had an interesting view of someone well-intentioned but who only went half the distance in what he was doing, and it got me to thinking about how many businesses are doing the same thing in their own way.
I was waiting at the bus stop in front of my home and the man that was near me noticed a plastic bag flying around, so he bent down to pick it up. My immediate thought was ‘what a great guy not wanting to see this plastic bag flying around on a busy street during a very windy morning.’ But then instead of walking a few feet to place it in the recycling bin on the other side of the bus shelter, he bent down again but this time to drop the bag outside the bus shelter where he was standing waiting for the bus to arrive.
I wondered why he even bothered to pick it up in the first place. Likely in a few minutes once the wind gets going again, this bag would probably start flying around. This time it might fly into the window of a passing car. What would it have taken for him to walk the few feet to dispose of the bag carefully and responsibly since he had already started the process?
Then this incident got me thinking about how many businesses do the same thing. Maybe not the same actual thing as I have related above, but rather where in their business are they on the right track and suddenly stop or sabotage their efforts by doing something halfway or never finishing what they started.
For example, a new business seeking clients starts connecting with other companies in the area to get some potential referrals but after a day or so stops because they are now onto advertising on Facebook without even knowing the best way to capitalize on this social media platform. Then when that doesn’t produce enough results in a short time, they are printing up brochures and paying money for these marketing materials to be circulated in their area, even if their potential clients are just a small percentage of the number of people who will receive the marketing piece when checking their mail and throw it out.
Then it is on to the next thing in the hopes of bringing in business, without keeping track of what is working.
I have consulted with businesses that have several ways to get leads for their company but never keep track of how well each one is doing. So, they have been potentially wasting time and money until I start working with them. They are well-intentioned in their efforts to secure new customers, clients or patients, but they don’t follow through just like the guy at the bus stop.
They also don’t keep track of the ‘lifetime value (LTV)’ of their clients to know how much they can spend to acquire a new one. The organization has set out to bring in new business but doesn’t follow through in keeping metrics to find out if what they are doing is effective. Just like the guy at the bus stop, they are half-heartedly making an effort. Then they complain why the revenue is not where they would like it to be.
When I first start working with new clients we look at what they are currently doing to bring in new business, how long they have been doing it, the cost of this effort and what the results are. Providing they have made a good attempt and can see metrics which indicates what they are doing is not working, we may tweak it a bit to then keep track if that made a difference. If not, then we look at other methods and resources to fill their business with paying clients.
Recently I had a conversation with an organization that was not doing well and struggling to bring in new business. They offered anyone that referred them a new client an opportunity to advertise on their website. They indicated that the value of an advertisement was about $350. I asked them how successful this referral reward was, and they replied that they didn’t get many referrals nor the referral partner taking them up on the reward.
I suggested that they try something different whereby they could offer something as easy as a $25.00 Starbucks card to everyone that referred them a new client. I further explained that while they might see the opportunity to advertise on their website as a great reward, they hadn’t taken the time to consider if this was indeed a value add to the referrer. For instance, the person who referred the new client had to have the ad copy created then have someone design the ad. In the end, it might end up costing the referrer money to have the advertisement on the website.
While I suggested that they offer something like the Starbucks card, this business owner was insistent that because times were tough in their business, they couldn’t afford the $25.00, whereas to have the referrer place an ad on their website cost them nothing.
This client was essentially only going half way to reward someone who took time from their business or perhaps their personal life to refer them business. As this business owner had never considered the cost of new client acquisition, they didn’t see it as the right business decision to make a change.
I then asked them the LTV of a new client, and they guesstimate three years. In this case, it ran about $1,000 in total. If they gave the referred a $25 card they were still going to likely make $975 with this new client. It took some convincing, but they finally stopped thinking about how bad their business was doing and instead went the whole way through the process to realize that this was $975 they wouldn’t have had without the referral, so it wasn’t going to costing them anything.
POINTS TO PONDER:
– Think of the guy I met at the bus stop and ask yourself where in your business right now you would say you are half-hearted in following through.
– What is the cost to your business by not keeping metrics of various vital elements like the cost to acquire a new client and the lifetime value you can expect?
– What does it cost you by doing things halfway? Consider this on a weekly, monthly and annual basis. Then decide what you will do differently in the future.
Sharon Worsley, The Business Development Ninja™ is the creator of the R7 System™ to Flood Your Business With Clients Today, Tomorrow and Beyond, helping businesses to ‘Wake Up, Shake Up, and Show Up.’ She also consults and coaches peak performers to excel as leaders. To learn more, contact Sharon at [email protected].