Category: Markets

In the book, “Succeed: How We Can Reach Our Goals,” author and social psychologist Dr. Heidi Grant explains several research backed strategies for getting things done.

In one chapter, she shares a study on college students who were asked to complete an essay over Christmas break. Half of the students were sent on their merry way and half were also asked when and where they would work on the essay?

The results were that 32% of the students who had made no plan completed the essay and 71% of the group who had decided when and where to work completed it. This effect of more than doubling successful completion has been replicated in other studies on students, dieters, smoker, women self-administering breast exams, and more (Gollwitzer and Sheeran.)

Grant describes the tactic as “If Then” plans. As in, “If I’m in this situation, then I’ll act this way.”

Today, I’m going to meet with my physical therapist, Chase, who is helping me with a couple injuries. I’ve referred his services to at least four other people. The referrals weren’t solicited by Chase- I just found myself in conversations where it made sense to recommend him.

In considering growth through word of mouth, Chase provides an opportunity to analyze how referrals develop.

What marketing strategies and tactics have you used in the course of your career?

I’ve used:

• Networking
• SEO
• PPC
• Speaking
• Content marketing (e-books, lead magnets, newsletters)
• Paid social
• Cold outreach (direct and email)
• Display banners
• Directory marketing
• Exhibiting

A tactic absent from this list and one I’ve never generated much business through is referrals or “word of mouth.”

Last Friday, I dropped $25,000 on a consultant.

When I woke up that morning, I wasn’t even thinking about what I hired the consultant to help with. By 9:00 AM, the money was out of my account.

What happened in between? I wrote a blog post on experience.

That blog post made me think about our pricing. Specifically, I was mulling over how most of our projects are under the average minimum project pricing that came out of the research I completed on agencies last month (for the channels we sell through.) I was wondering if we were doing comparatively smaller projects or selling ourselves short?

I’m promoting an event for our Toastmaster’s club that is a copy of a job interview workshop that another club put on. I chose it specifically because I knew that it worked wonderfully in driving membership for the other club.

I spoke with the president of that club more recently and he mentioned a detail that I wasn’t initially aware of: the original workshop was during the 2008 recession.

I installed the furnace and HVAC system in our house. It was a solid 3 – 4 months of working weekends.

Here in Portland, there is massive demand for skilled blue collar workers and not enough supply. The consequence is that it’s common to pay three to five times what you would in another city and still have the work poorly implemented.

Hiring a HVAC company seemed riskier than doing the work myself.

One of the things that stood out for me in the research I recently completed on marketing channels for digital agencies was that most work was referral based.

I already knew that referrals were a significant source of most agencies’ work- but that has never been my experience. It was eye opening to see how many referrals occurred, how they happened, and the impact on pricing.

“We didn’t know we were starting a business. We wanted to work on this problem and then people started to call us and ask us to help them with that same problem.”

This is how my wife’s uncle Glenn described to me the child development consulting business he has operated for more than twenty years. We were talking about how he built his successful business at a family reunion this weekend.

He told me, “We were lucky. If it had been ten years sooner, it never would have worked. If it had been ten years later, it never would have worked.”

I know several stories of lucky entrepreneurs that wandered into a thriving business.

But it’s not useful or accurate to describe all upswings in fortune as “just luck.”

What Glenn was describing with the traction he gained starting his consulting business was not luck, but timing.

I’ve often wondered how participating in a market with a high number of options, like a service directory, affects pricing. My theory has been that it drives pricing down by de-emphasizing differentiation and emphasizing alternatives.

We just completed research using Clutch as a data source. Clutch is an agency directory that includes the project cost range and how clients found the service provider in its reviews. Many agencies will complete a project with a client and then ask them to review them on Clutch with the intent of building up their presence there.

We looked at 482 reviews and compared 312 of the reviews with larger groupings. We took averages of project minimums to get an idea of how the channel where the client sourced the work impacted the cost.

If a client found their agency through search or referral they would make 40 – 100% more than if the client found the agency through Clutch and 300 – 400% more than if they found their agency through UpWork.

There’s an episode of the cartoon, Bob’s Burgers, that centers around a trash can. People in the town decorate it to make it look like a pirate, lion, etc. A local realtor feels like this is lowering the value of the rental space next to the trash can and convinces the city council to vote on a resolution to make it illegal to decorate.

Linda, the mom of the family in Bob’s Burgers, decides to fight this by trying to drum up support for the creative vandalism. She stands next to the decorated trash can and she asks everyone who passes by to come to the city council meeting. She tries explaining how it’s fun and brightens people’s days, but no one will so much as stop and listen to her.

Meanwhile, her daughter Louise, notices on Next Door that there is a trend of people asking for moving boxes. No one in the family understands why everyone is so interested in boxes. But she posts on the website that there will be boxes being handed out at the city council meeting. A small crowd shows up, seemingly in support of Linda, and the councilors vote against the resolution.

There’s a lot of truth in fiction.