If you don’t understand what value you provide and organize everything you do to ensure that customers experience that value – you have a profit drain. This is the place money flows without you knowing it. Every business has them, the idea is to capture as much good business as possible and let only the business that isn’t right for you go down the drain.
Most companies try to keep expenses down, naturally. Yet, while someone is restricting the consumption of coffee, one of the most valuable levers that any business can pull is ignored. What is it? Increasing revenue from current customers or acquiring new customers at little cost.
Here are four questions to ask yourself – take your answers seriously, they can show you the way to greater success.
First – Is your value clear? Do YOU know what it is?
This is something that can be changed without a major overhaul to your business. What if you captured an additional 5% with little investment? Just clarify what you are about in terms that matter to your customers. Teach your employees what business they are truly in and act accordingly, you will be miles ahead. Don’t let them talk about the drill.
Second – What needs or wants do my customers have that I’m not helping them with?
In addition to finding new customers, why not make your current customers more satisfied? They are already disposed to do business with you – what is better than that? A terrific example of this is Zappos. If you have the joy of speaking with someone at Zappos, you get a really fun experience AND shoes. I’d rather call Zappos than almost any other place. I WANT to call them – they are fun. They listen so well that they can suggest things that I’ll like.
Third – What is making your customers happy? Building on success is fast and far better than reinventing the wheel. Exploit what you do well.
Some products are very compelling on their own. Food. Olive Garden has a long history of the soup, salad and breadstick offering. To say it is popular would be an understatement. They are passionate about the food but realize it is not enough. They embed an ethos of service in every restaurant, every team member and tirelessly work to maintain and grow it. This is no shallow rah-rah, it is a deeply held value that guides their decisions.
Fourth – Do you allow managers to treat employees with less respect than you expect the employees to show your customers?
Don’t automatically say “no” to this – think about it. It’s ridiculously common. A few years ago I had major issues with the Avis folks at the Philly airport. I complained, but to no avail. The employees were nearly universally surly. So what’s the problem? Management. You can’t blame dozens of employees for the culture. You also can’t tolerate rude behavior, but addressing that is just a piece of the puzzle. Bad managers react to problems as though they are one-off and don’t look at the systemic issues – or themselves.
These four things can help you grow your business and the investment to do them is a tiny fraction of the value you will derive.