The understanding that there are basically just four ways to create a better business can play a crucial part in the philosophy of the entire business development process. The four ways are:
1. Increase the number of customers of the type you want to have
2. Increase the number of times customers come back
3. Increase the average value of each sale
4. Increase the effectiveness of each process in the business
That’s it. There are no more. Incidentally, you can, of course, deliberately reduce the number of customers with whom you deal. This can simultaneously increase what we might call “the quality” of those customers. This strategy is a combination of the last two factors.
These four factors will give you critical focal points for your business. When combined together, they also give you leverage.
For instance, given that you could increase each one of the factors above by just 10% (not too difficult a task), the total combined effect of that is an impressive 46.4% increase in your business.
Is it possible to do that? Yes, it is. Also, by judiciously applying the skills and concepts in our business development program, you can make that percentage increase not just possible, but highly probable. In building your business, you will discover that every single one of the strategies you’re given relates back to these four ways to grow your business.
For example, creating better scripts for incoming phone calls (improving effectiveness) might have a profound effect on the number of new customers a business creates.
That in itself is an interesting example. You see, when you ask most business people how they can increase their number of customers, they believe better advertising is the way to go. Yet, that might be the worst possible strategy to adopt!
Why, you ask? Here’s an example.
Suppose you were in a business where the majority of your sales came from phonecalls. Further suppose that you wanted to double your sales.
And assume you knew that your conversion rate (the number of actual sales you get per 100 calls) was 16%.
Then, given that you could not change the effectiveness of your advertising (although we will show you how to do that if you work with us in our coaching program), all you need to do to double your sales is to double your conversion rate. You might do that by training, by having much more effective scripts in place, and so on.
Clearly, this strategy, which concentrates on the conversion rate (increasing your effectiveness), is likely to cost far less than doubling the number of advertisements you run.
Not only that, but there is also another benefit.
Let’s say your current advertisement produces 100 prospects, and that you convert 16 of them. The likelihood is that you will turn away those remaining 84 (that is, the group of people who will most likely not deal with you again).
So, as perverse as it may sound, if you double the effectiveness of your advertising WITHOUT changing the conversion rate, you’re actually creating 168 people who will not deal with you now.
That’s why it’s critically important to always look at the total process by which any business is creating sales. After all, there is more than one way to do this!
And that’s why one of the keys to our coaching program is looking not only at the ideas themselves, but at the permutation of the ideas together.