Are you a sprinter or a marathoner?
It’s one of the most important questions you can ask yourself, because becoming a local or industry leader – and maintaining that position – is like running a marathon.
You may sometimes feel that you’re on a treadmill and not making any progress, but that’s simply because incremental improvement is often difficult to see at close range. When you step back and look at the history of your company, you’ll see how far you’ve come when you give your business the care and feeding it requires.
Here are six areas in your business that need constant attention. You can’t “stand pat” on any of these.
You may give others in your organization responsibility for some of these areas. That would be a great idea, especially in the areas where you don’t have expertise or interest.
Handing off some of these responsibilities to others can also give you added leverage in certain situations. For example, if a purchasing manager is having trouble getting the desired terms from a vendor, the manager can say, “I’ll have to talk to my CEO about our relationship with your company.” It can be used as a good-cop-bad-cop strategy.
Properly done, negotiating strategies like that can be powerful.
Consider this list as an “infinite loop.” You are always going back over each item to dig more deeply and see if conditions have changed that will allow you to put your business in a stronger position.
Improve your means of making daily sales. Today there are two general areas you must be taking advantage of: Inbound marketing and outbound marketing:
- Inbound marketing includes content marketing, social media marketing, email marketing, and text message (SMS) marketing. Each of these is its own animal with a myriad of strategies and styles. This means that there is ALWAYS room for improvement. With inbound marketing you are trying to attract
- Outbound marketing includes more straightforward advertising; you are trying to sell customers on a specific product or service. This can be through legacy systems – such as direct mail, media, or print advertising – or via digital means like retargeting or keyword advertising.
Boost your lead conversion rate. First let me ask a question: Do you know your conversion rate? If you don’t, there’s no way to know if your strategies are improving it.
For many businesses, getting everyone in sales and marketing on a good customer relationship management system (CRM) is the single most important step you can take. Once you have a system in place, you’re positioned to start making changes and measure their impact.
Also, find out what your best sales people are doing. Capture it and share it with the rest of your team.
Increase the dollar value of each sale. The first thing to consider here is how your product or service is positioned within your industry or your community. If you’re the “low-price leader,” you’re starting out at a disadvantage. Find ways to make you the “premiere” provider.
Upselling is one of the best ways to squeeze additional dollars out of each sale, but this is easier said than done. You need to have the right lineup of offerings to upsell and you also need to have your team trained to upsell as a service to your customers and not be viewed as trying to talk customers into buying something they don’t want. Doing this requires understanding the needs of your customers.
Cross selling is also a powerful strategy and it may mean rethinking how you do business. Are you old enough to remember when banks were places to store your money and get an occasional loan? Now we have “full service” banks that offer all kinds of financial services. Brainstorm related areas so you can be of greater service to your customers.
Boost loyalty and purchase frequency. “Bring ’em back for more!” This should be a goal. A good loyalty program is the central element here, but it can’t end there.
I’ve recently been impressed by what some major restaurants are doing. They are putting together special seasonal offerings that are available for a limited time only. The time element is important; it’s a huge motivator for buyers. If your favorite dessert item is only going to be offered during November, there’s a good chance you’ll go to the restaurant in November.
Further, if you’ve been collecting customer history through a loyalty program, you can discover how to time strategies like this for various customer cohorts.
The entire customer experience is also part of this. If people are delighted when they patronize your business, they will simply come back more often!
Finally, as I mentioned under cross selling, if you broaden the products or services that you offer, you have the opportunity to bring customers through your doors more often.
Reduce cost of goods sold and transaction overhead costs. If the economy hits a rough patch, you may discover that there’s little you can do to increase sales. However, in both good times and bad times you can (and must) control your costs.
Don’t get caught up in irrational exuberance when things are going good and allow your inventory to mushroom. The flip side of that is don’t wait too long to cut costs when you experience a downturn.
Always be searching for ways to streamline systems, negotiate better deals, and get better payment terms from vendors. If you do credit card business compare processing rates and fees at least once each year. And, if you do online business, take a look at cryptocurrencies.
Lower overhead and increase productivity. In the last item, I was discussing costs directly associated with sales. The same general principle applies to your overhead. Always be on the lookout for ways to trim the fat. Get better payment terms from your vendors to improve your cash conversion cycle.
Look for ways to harness the power of the Internet. This includes using offshore services and service providers. I know a freelancer who has a part-time virtual assistant in the Philippines. She is dependable and does a great job. He originally advertised on a local college job board and didn’t get any response. He is saving money and getting excellent service. Even stateside virtual employees can save you a lot of money.
Look at the wide variety of software as a service (SaaS) available today. SaaS allows you to buy as much of a service as you need at any point in time. It also transfers the IT overhead to someone else.
The principles I’ve outlined here are fundamental to ongoing success for every business and that leads to one final principle you must remember: Never ignore the fundamentals.