Small business owner: It’s not enough to just do your unique thing. You’ve got to get people to at least know about your unique thing for them to be qualified to buy it.
This process of “getting the word out” takes time and, sometimes, money.
And as we’ve discussed in prior blog posts, it doesn’t just stop there. Once your potential client knows about your unique thing, they’ve got to like and trust it AND you before purchasing.
The liking and trusting part could take anywhere from a few seconds to a few years (eek!).
Regardless, any business’s path-to-sale WILL require, at the very least, time. And often, it’ll require money.
This isn’t necessarily a problem for most small businesses. It kind of comes with the territory, right?
Small businesses are scrappy. They’ll figure it out. They’ll find the time and the money to do what needs to be done to survive and become profitable.
The most common problem I see is that some of that precious time and money being spent on marketing is simply wasted.
Obviously, knowing exactly who you’re targeting, creating a picture-perfect sales funnel to attract them, and earning real-life clients and customers is a phenomenal start to any business’s success.
But. There still could be wasted time and money.
So, how does this happen exactly?
Simply put, in most marketing strategies, there are many moving parts. Even with the most simple strategies, there are an endless number of ways a prospective client could be converted into a paying client.
With many moving parts, how people find out about you can become difficult to track. As small business owners, we’ve got a lot on our plates. So when things get difficult to track, we so often just don’t track it.
Every once in a while you hear that someone found your website and that’s why they called… or that someone saw a shared Facebook post about your business and then sent you an email. But by and large, you don’t exactly know how people hear about you and what makes them finally contact you.
And since business is “good,” you don’t stop to dig into it.
And so you just continue doing all of the things you’ve done to market your business up until this point, not knowing what marketing activities yield the most money and which ones yield the least.
And that’s how time and money is completely wasted on marketing – when you continue putting resources into things that no longer serve the livelihood of your business.
You want to stop wasting time and money, right?
To help you with this, I’ve developed a SUPER basic way to get a handle on your referral sources and how much money they yield for you.
There are plenty of ways to make this process more complex and perhaps, give you more telling data.
But for now, we’re keeping it simple.
Here’s my basic MANUAL process of knowing if you’re wasting time and money on marketing:
*NOTE: There are more automatic ways to do this, which I’ll share too.
First, you’ve got to ask all of your inquiring potential clients how they heard about you and what made them contact you now.
Whether you’re selling online or offline, to many people or to just a few, you need a system to gather this information.
It could be as simple as including the question on the customer’s order form. Or for those of you that book clients on a phone call, work the question into your sales script.
As you’re asking your inquiries these referral questions, record their answers in a simple referral tracking spreadsheet.
(My spreadsheet template is available for free download here.)
Record their name, how they heard about you, and what made them contact you today.
At the end of each quarter, review your referral tracking spreadsheet, filling in the final column of how much money they’ve spent with you to date.
Here’s an example:
Told you it was super basic.
With all of this intel in one spreadsheet, you can filter it and see how many new inquiries came AND how much money you made from each referral source.
Compare these dollar amounts with how much time and money you’re spending in those specific marketing efforts to know where you’re getting a great return on investment (ROI) and where you’re not.
Remember, you might be spending time and money on a marketing effort that never even shows up on your referral tracking spreadsheet. This is worst case scenario, right? You’re spending on it but no one’s contacted you because of it!
Here’s an example spreadsheet that compares referral source to revenue received, time spent, and money spent:
This business owner should probably think about why they’re spending time on Twitter, when it’s yielding no actual revenue.
You might think, “Well, it’s just one hour a week. It’s not that big of a waste.” I completely challenge you on this. One hour a week is 52 hours of year. A LOT can be done in 52 hours when they’re spent well.
If you’re not into filling out a spreadsheet and would rather do this more passively:
Within a CRM tool, you can track everything about your inquiries and current clients, enter necessary data, and easily pull up reports on things like referral sources and ROI – but only as long as you enter that info in the first place.
The end goal of this process is to make sure you’re not wasting time and money in an area that is not yielding results.
Now, I admit, it’s not always black and white. There are certainly gray areas where these things aren’t crystal clear. But a simple referral tracking system can give your business incredible insight compared to not tracking it at all.
So no matter where you are in your business – just starting out or have been at it for years, follow these steps to ensure an avoidance of wasting time and money on marketing:
- Ask all inquiries where they heard about you and what made them contact you today.
- Record all intel in this spreadsheet.
- At the end of every quarter, fill in the Revenue Received column for each inquiry and compare that to time and money spent.
- Allow yourself to back off the things that are not serving your business and double down on the things that are.
One more time, grab your Referral Tracking Template here!