SMART MARKETING: Cross Marketing = Dollars and Sense

There are a couple of marketing related issues you should be tracking if for no other reason than to determine if you can afford what you are doing. I’m thinking about the cost per lead and the cost per sale.

It’s a glorious day for most pest management professionals when the phone rings and someone asks you to come out and sell them something. Usually, this doesn’t happen without some sort of stimulation on your part. It could be an ad in the Yellow Pages, a truck seen in the neighborhood, a referral from a satisfied customer (love those!) or something more aggressive, like television or radio advertising. In any case, that incoming lead and hopefully subsequent sale have some costs attached to them. It’s good to have some idea of what those incremental costs are.

COST PER LEAD. The way we determine our cost per lead and cost per sale is relatively simple. I take the gross number of leads we receive in a given year, divide that number into the total marketing investment we make and I come up with a number. For example, if I get 1,000 leads in a single year and I’ve spent $100,000 on marketing, then my cost per lead is $100. Same with sales. Regardless of the number of leads I get, if I sell 1,000 new customers and I’ve spent the same $100,000 on marketing, then my cost per sale is $100. This doesn’t include sales commission (if you pay sales commission) and it doesn’t include any other tangential costs, such as discounts, referral fees, collateral administrative costs, etc. I try to keep things simple in this regard.

Since I have no real idea if that’s good or bad (since I don’t know how much my competitors pay per lead or per sale), I track it from year to year and try to bring that cost down by being more effective and more efficient in my marketing.

INFORMATION EXCHANGE. By now you’re probably wondering where I’m going with all of this. The purpose of this exercise is to determine the place where we all are most effective and efficient in our marketing — where leads cost us virtually nothing and sales cost us only slightly more. I’m talking about our customers!

Easily the most fruitful marketing environment for any type of business is with satisfied customers. Those folks already know us. They like us. They’ve determined that what we provide has value. They’re almost family! Now some questions:

Do they have all of the services you provide? Are all of your pest customers already termite customers? Vice versa? Do you provide them with a meaningful incentive to refer a friend, relative, neighbor, coworker or acquaintance for one or more of your services? If you do, good for you. You’re picking the proverbial low hanging fruit. If you aren’t, why not?

We have two different cross marketing efforts and two different referral efforts going on at any given time. On a service center by service center basis, we are constantly encouraging our sales inspectors to call existing termite customers and offer them a free, no obligation inspection for our pest prevention service. We offer them a "preferred customer" discount for taking another service. It’s usually as good or better than any discount we take to the open market.

Company-wide, we approach customers twice each year, offering them the same thing, but we do it during heightened biological seasons.

Broken down to its most basic elements, our existing customers know us. If we’re doing our job right, they like us. If we have another service we can offer, why should we let a competitor get to them first?

Cross marketing services to existing customers is normally an easier conversion than developing a new customer. The "lead" is already there, so there’s virtually no cost per lead. And with no cost per lead, the cost per sale drops dramatically.

When leads are slow, work your base! Sell other services and ask for referrals.

The author is vice president of marketing/public relations for Massey Services Inc., Maitland, Fla. He can be reached at bbrewer@pctonline.com or at 407/645-2500.