Updated June 2, 2021
The two big ways to increase your bottom-line
Make sure you’re selling smart.
This means focusing on your best customers and your best offerings. And, doing more of what is most profitable and less of what isn’t.
and
Get lean, and stay lean.
Don’t do things the way you’ve always done them, just because that’s how you’ve always done them. Instead, look for ways to get more efficient – that might mean changing people, moving people to new roles, redesigning processes…
We see plenty of “new and improved” products out there, and there’s a slew of articles on how to up-sell to your current market. It’s often harder to identify how to get lean. Since it can be harder, take time, and require effort, it’s also less utilized, at least effectively, in many businesses.
The five levers of getting lean
There are five different levers that I use with my clients to get lean, or leaner
People
Processes
Structure
Compensation
Measurement
A closer look at measurement
Why measure? Virtually every measure I’ve worked with has told me and my clients something about the business that our instinct didn’t, and couldn’t, tell us. It’s what is really happening in your business.
What do you really sell? Who are really your best customers? How much time do people really take to do that?
It shines a light that almost always tells you something – and often something useful and surprising.
The challenge of metrics
Unfortunately, as anyone who has tried to create metrics will tell you, it is not as simple as it seems. Most people start with good – and big – intentions, but they typically run into trouble in two ways.
They either aren’t clear about what to measure, and so they create too many measures. Or, they don’t take into account the time that measuring is going to take, and they end up creating an administrative nightmare that collapses after a month or two.
How to create useful metrics
First, plan to spend some time on it. This is going to take you and your team 5-10 hours to talk about and think through.
Second, ask yourself what the 3-4 activities are that you have to get right to be successful.
This will take some time – your first answer might be, “Serve customers well”. But, after some time, and asking yourself how you’re going to measure that, you’ll get to, “Meeting with the VP of Marketing once a quarter and with the CEO once a year” or “Completing the customer needs assessment once a year.”
Finally, look for simple ways to administer the measures.
I read a great example a few years ago about a company that gave everyone different colored marbles, and each day people dropped the appropriate marble in a jar as they left for the day. At the end of the month, someone counted the different color marbles. It’s a simple visual system that lets everyone know at a glance where you stand. Similarly, I often recommend using a simple sheet of paper with check marks when possible.
The value of measuring metrics
The value of metrics is in their specificity, but that’s also what can make them so challenging. The balance between specific measurable metrics, and the administration to keep track of what you’re measuring, is a delicate one. Once you’re clear on what you should measure, then think about what easy measuring system can give you most of the information you need to know to determine whether you’re on track or not.
Bringing it all together
Let’s combine the two thoughts – selling smart, and getting lean.
Here are some measures that could track how well you’re selling:
Proportion of customers who buy more than one offering
Proportion of proposals accepted
Profitability of each job/project (if it’s hard to measure, just use Hight/Medium/Low)
Number of hours needed to close a prospect
Conversion rate of a single page on your website
There are lots of possible measures, and the ones you should look at depend on what you want to improve in your business. The more you measure, the more accurate picture of your business you develop. By measuring key areas, you can improve sales, identify new opportunities, and improve the bottom line.