Return on Investment, or ROI, is an analytical tool used to determine the value of any business activity.
Architecture and engineering firms frequently use an ROI analysis to justify expenditures on objects like computers that are tangible and directly related to project performance. But how often do firms critically and logically assess something less tangible like networking?
ROI analysis includes 3 factors:
1. The Investment, which includes labor and direct expenditures.
2. The Return, which reflects both the face value and profitability of contracts.
3. The Effect of Time.
Evaluating your networking
How do you know if your networking has been successful and what is the payback?
Here are some positive indicators:
1. Clients ask for your expertise on how to approach a new project.
2. You know about projects before the competition by knowing what is going on inside the client’s organization. From the client’s perspective, you become the easy and safe choice.
3. Your work with the client may include early planning studies.
4. By having a deeper appreciation of your firm’s capabilities and skills, you can command greater fees for your services. Your clients trust you; they stop fee shopping.
5. Your clients refer other clients to you. They also refer potential employees to you. And you refer business to them. Networks are strongest when the needs of both parties are addressed.
An ROI analysis of two marketing activities that are approximately equal in investment will lead a firm to pursue the activity which results in the greatest return at the earliest date. While networking may never be at the top of your list of favorite activities, it does yield a substantial potential return for the dollar investment.
Let us know: How has networking helped to grow your firm's client base?
About the Author: Frank Stasiowski FAIA is Founder/CEO of PSMJ Resources. Connect with him on Linkedin or via e-mail at fstasiowski@psmj.com.
This article is an excerpt from How to Build and Maintain a Strong Client Base for Your AE Firm. Now more than ever, you cannot simply hang out a shingle or rely on your technical expertise and experience to bring clients to your door. To grow and thrive in today’s economy, you need sound and proven marketing strategies and tactics. How to Build and Maintain a Strong Client Base for Your AE Firm takes you from start to finish and gives you proven and action-oriented advice to tackle every challenge that comes your way.
For more advice on AE marketing, following is a list of related blog posts:
8 Reasons Why You Shouldn’t Do AE Marketing
Get Your Team in Marketing Gear
How to Use Strategic Marketing to Address Change