subject: Use Investment To Fuel Growth And Sales [print this page] When companies think of return on investment, (ROI), they typically consider capital investments. Purchases of new machines or software aimed at specific tasks with a measurable return on invested capital such as productivity gains, increased production, faster billing etc.
However does investing in non-tangible items provide a real return to your business, and how do you measure that return?
Most companies are reluctant to spend money on intangibles such as employee training and development, or nonproduction related expenses related to plant and equipment. Lets face it, its tough to measure a clear return on investment of intangibles.
It might be easier to measure the impact of not making the investment, such as high employee turnover, poor quality, poor customer service, and lost market share.
I am working with a client that has made significant investment in what would normally be called intangibles, and has seen an excellent return on that money. I typically dont name clients but since this article is focused on the positives I think he wont mind.
Aardvark Memphis is a full service property maintenance company, with the largest fleet of sweeper trucks in the tri-state area. They also do warehouse sweeping and scrubbing, retail teardown and build outs, floor maintenance and nearly everything related to maintaining retail or industrial property.
Ive worked with them for about a year on strategic planning, diversification and sales and marketing effectiveness.
One of the reasons Ive had to work with them on sales and marketing is theyve never done any. The company has been in business for 14 years, has been profitable for 13 of those years and has never done any real level of sales. They have experienced excellent growth entirely through customer referrals and word of mouth.
What sets them apart? A high level of commitment to quality and doing whatever they do right. The owner spends money on things that most owners wouldnt consider. For instance he washes his fleet of trucks everyday. He maintains all of his equipment to original OEM specifications, and invests in technology from GPS to track routes to maintenance logs. He has a high level of commitment to employees and customer alike.
While the return on the money he spends on intangibles may be had to justify in hard numbers, the results are hard to argue with. The high level of commitment he gives to quality and appearance creates expectations for his employees. They clearly see his commitment and follow that lead whether caring for the equipment or performing work at a customer location, the expectation is, only best effort is enough.
The results speak for themselves, growth, profitability, customer loyalty and limited sales expense.
by: Martin Harshberger, President, Measurable Results LLC
