| Every business is made up of a series of
processes that converts inputs into outputs. One of the keys to making your business
more successful is to identify your most important processes, and then do everything
you can to improve the conversion rate so that you get more output from every
input. It's as simple, and as difficult, as that!
So look at each process. Understand how it works
and what it delivers. Decide whether you need it. And, if you do, experiment with
ways to improve the rate at which it converts inputs into outputs.
For example, for salespeople one of the most important
processes is the way they convert the people they meet (their "inputs")
into paying customers (their "outputs"). Fortunately there are hundreds
of ways of improving the conversion rate here. For example, a now famous life
insurance salesman became a multi-millionaire just by changing the first few words
he said on meeting a new prospect. While most of his competitors answered the
"So what do you do then?" question with the words "I sell life
insurance"… a response that was guaranteed to empty the room in seconds.
This particular salesman answered with the words "I buy life insurance for
people at the lowest possible price. Would you like me to buy you some?"…
19 words that made him a multi-millionaire. Often the difference between success
and failure, between stagnation and explosive growth, can be as simple as that!
For other businesses the key processes and conversion
rates could include:
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How many units of raw
material (inputs) it takes to make a unit of finished product (output) |
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How many sales leads (inputs)
they convert into sales (outputs) |
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How many first time customers
(inputs) they convert into repeat customers (outputs) |
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How many customers (inputs)
they get referrals from (outputs), and many more |
What are the most important processes in your business?
And, once you've identified them, what ideas, techniques,
systems or even new words will improve your conversion rates? Unfortunately the
answer is "you won't know until you try." But even trying out new ideas
isn't enough, because you won't know whether the trial (or 'test') has been a
success unless you measure it properly.
Remember, what you can measure you can test, and
what you can test you can improve. And that brings us very nicely to your action
plan for business growth…
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1.
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Start by identifying your most important
processes, and measuring the rate at which those processes convert their inputs
into outputs. |
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2.
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Get every single member of your team
thinking about what you can do to improve each and every one of those key processes.
Encourage super-creativity by offering prizes for the most off-the-wall ideas.
And reward ideas that work with lavish praise, recognition and perhaps even something
a little more tangible! |
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3.
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Generate further ideas by systematically
asking your customers what they really want. NB It is always a great idea to listen
to your customers. But don't let them set the entire agenda, since very often
they will not be able to tell you what they really want until you have first shown
them what is possible. For example, they are unlikely to tell you they want a
revolutionary new product until you have first told them it has been invented,
are they? |
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4.
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Systematically borrow from, and benchmark
against, the ideas of other successful businesses - especially those in different
industries. But don't make the mistake of thinking that every idea has to be original
or revolutionary. The best ideas are often the simplest and the smallest (just
as they were for our insurance salesman!). |
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5.
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Test your new ideas - ie try them
one at a time (because if you test more than one at a time you won't be able to
tell which ideas work, and which don't). |
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6.
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Systematically measure the impact
on the conversion rate of every new idea you test. |
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7.
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Use the best ideas - and reject the
rest - by making sure that the best ideas are built into your systems so that
they are used every single time. |
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8.
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Don't rest on your laurels (after
all, today's laurels are tomorrow's compost). There is never a perfect way of
doing anything. But there is always a better way. So carry on measuring and testing,
and carry on finding better ways to do everything. |
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9.
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Ask us how our Business Edge programme
can help you to do all of this even more effectively and profitably. |
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