True Networking Costs by Howard Larson
So what do you do? Join a Chamber of Commerce? At Professional Industry Association? Formal Networking Groups? Let’s look at the cost incurred by each.
They all have their place if you get work out of them, or do you just like being in a group for the fun of it? Me, I join for the money. Friends are a side benefit. Education a side befit as well.
So what are the “true” costs?
Chamber Of Commerce
If you are the a-typical small business you open the doors to your business and trot off to join your local Chamber of Commerce. Is it a wise investment? Well… It cost you say: $300.00 to join, then there are the 10 – 2 hour meetings a year at a cost of $20.00 plus time. Join a committee? There is another 3 hours a month x 12. Then add in drive time or 1 hour a meeting and your “investment” is only $8400.00. If you don’t think your time is worth $100.00 an hour you might want to rethink your being in business. Total cost is $8700.00
Investment gap: If you pick up 5 clients at $1200.00 each, for $6000.00 in new business leaving a short fall of $2700.00
Professional Industry Association
Another business normality is to go off and join a Professional Industry Association. Cost might only be $500, if you’re lucky. Then there are (again) the 10 meetings a year, most likely dinner meetings so the cost goes up to $30… a pop in a plus 2 hours or drive time (at least here in the Chicago area) and you have a $4500.00 nut to crack.
Investment gap: If you can pick up 2 clients out of a group like this you are doing good. There might be more prospects but the competition for them is greater. Yet the pay back is higher to say $2000.00 per customer for $4000.00. Result a short fall of $500.00 I hope you’re getting $500.00 in education.
Formal Networking Group
The last of the big 3 in lead generation and referrals is the Formal Networking Group. These groups can be great as their sole purpose is the generation of business for their membership. Annual dues are $450.00 the weekly meeting and yes this is usually a weekly time investment is about 2 hours for time and a lunch cost of say $15.00. Out of pocket is $1200.00 for dues and lunches and time investment is $10,000.00 based on working 50 weeks a year, for a total of 11,200.00.
Investment gap: With the average sale being $1200.00 you need to get 10 new clients to break even.
Now the big picture cost if you did or do all three? Only $24,400.00
Now you can tell me, I write all this off for my business so it is a tax write off. So the investment is only half that amount. Sure, ok but it is still money spent and it is out of pocket till you reclaim it back from Uncle Sam
Larson Notes & Satire: So there you go only $11,200.00 dollars at the high end or $4500.00 at the low end or $24,400.00 dollars for the whole program. If you own the company maybe you can make that back. If you are “just” a commission salesperson getting what, 10, 15, 20% commission you need a heck of a lot more business that $24,400.00 and that is to just break even. Can you do it? Mmmmmmmmmm yes, but then. . . .
. . . just imagined if you took that money and put it into a targeted marketing plan? For $24,400.00 I could work wonders for you.
Give you a combo, Telesales, Direct Mail, Social Media Marketing plan.
If you choose to do a Larson Telemarketing Lead Generation Plan what is the pay back. Now mind you this is the stripped down bare bones program but if you were to give me $1200 a month or $14,000 a year, that would give you a program of 40 hours of concentrated Lead Generation work. And on the average that would give you a pay back of at least bare minimum 5 to 8 leads of which yes they are not customers yet but in 1 month that should be 20 to 32 leads or 240 to 384 leads a year. Do you feel lucky? Ask yourself what is your closing ratio? If you had that many leads could you would you fail? What is your closing ratio, all great sales people I know, know theirs. Good or bad, they know. 1 out of 10? 1 out of 5? Do you even know? Give me the whole $24,400.00 and I can put in a direct mail wave program and your numbers of return start to hit double, yes I said double, digits of over 10% of contact interest. So I am seeing upwards of over 1000 sales leads of companies that know you, need you and want to talk to you. Think about that for a few minutes.
When you know their numbers and you know what you need to accomplish number wise to hit the income figures you want to achieve things start to fall in placed. Numbers don’t lie, nor do ratios.
When we talk about what is truly cost effective or will give you the best payback, pick your path to your success.
“We don’t sell lists, we find customers.”
Larson & Associates
Target Marketing & Telesales Professionals for new account acquisition
Making good businesses great and great businesses even better