Episode 10: ROI & Strategic Partner Idea From Starbucks

“It's not how much you spend, it's how much you get back.” This episode will give you a formula for calculating ROI so you can make sure your marketing dollars are making you money.

In Part 2, learn how Starbucks turned a strategic partner idea into a win-win for both companies, and how you can use the same idea for your cleaning company.

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Episode #10 - Video Transcription

"It's not how much you spend, it's how much you get back." Now you may be saying to yourself, what the heck is she talking about? Well...I'm talking about Return On Investment, or ROI. This is always a difficult concept for cleaning business owners to grasp, because we tend to focus on marketing as an EXPENSE, rather than an investment from which you need to gain a positive return.

So if I suggest to you, that you invest $600 on a particular marketing strategy; your first thought might be, "Gee, $600 is a lot of money - I don't have that kind of cash to spend." But what you SHOULD be focusing on is, what will my Return On Investment be? If I can make $1000 back on that $600 that I spent, isn't that a good investment? Wouldn't you be willing to spend that $600 if you knew you could get back $1000?

Ok, let's take it a step further. In the cleaning business, we are looking for recurring clients - clients that are going to have us clean over and over again. So when you're looking at ROI, you need to consider the yearly value of that client and even the lifetime value of that client, not just the one time sale. Let's do an example. If your average retention for clients is 5 years, and your average client is worth $5,000 a year, then that client is worth $25,000 to you over the next 5 years. So if you spent that $600 to gain this one new client, wouldn't you be willing to spend that money?

So what I want YOU to do, the next time you look at a new marketing strategy, is to do the math. Figure out what your potential return on investment will be from that strategy. And here's a forumula that you can use to calculate your return on investment: ROI equals Profit minus Investment, divided by Investment. If you make a profit of $1000 on a $600 investment, take 1000 minus 600 and divide it by 600. That equals .67, or 67%. Once you start tracking your ROI, you'll start to see a trend in your business that will clearly show what marketing activities are making you money and which ones aren't.

I'd like to hear from YOU on this topic. Do you NOT spend money on marketing because you're looking at it as an expensive proposition? Or do you track your ROI and put even MORE money into activites that are working for you? Post your replies under the video at CleaningBiz.tv.

Before I move on the the next segment I want to take a moment to tell you about CleaningBizMarketingMaterials.com. Our partners at GoBigPrinting helped US put this amazing service together. This is the only place on the Internet where you'll find direct response marketing materials created exclusively for the cleaning industry. You can customize and personalize everything from 4-page newsletters, postcards, self-mailers, comment cards, door hanger flyers, greeting cards and more! So check it out at CleaningBizMarketingMaterials.com -- and be sure to watch the videos!

Episode 10 Marketing Tip - Video Transcription

Do you know what this is? This is one of those little cardboard covers that slides onto a hot coffee cup. I got this one at a Starbucks at the Dallas airport. Now what's different about THIS one is, the advertising for Trident gum on the package. Most coffee shops just put their own name and logo on it. This one has a photo of the gum, and says "Prevents over 35% of stains". It also says, "2 pieces after food or drink". Then on the back, it has a 50 cent coupon for a pack of gum.

When I saw this, I thought, "Wow, what a great cross-promotion!" We all know that coffee stains your teeth, and when you're traveling, it's not very convenient to brush your teeth. So... why not buy a pack of gum to help prevent those coffee stains? What a win-win for each company! If you think about it, Starbucks needs to provide these to their customers anyway, so why not let a company with a complimentary product, pick up the cost of the sleeves, by letting them advertise? Great idea, huh?

So what does this have to do with cleaning? Well, why can't YOU incorporate something like this into YOUR marketing strategy? We actually did something like this when we provided ultrasonic blind cleaning services. We partnered up with one of our clients that was a dry cleaning company. We offered to buy the plastic covering that goes over the clothes, in exchange for being able to advertise on the plastic. A residential cleaning company could do the same thing.

Another idea would be to buy advertising space on a carpet cleaning service van. Or a commercial cleaning company might partner up with a lawn care service. All you have to do is make a list of businesses that are complimentary to yours and then brainstorm ways you could create a win-win marketing strategy. The opportunities are out there, you just need to think outside the box and make it happen!