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If It’s Going to be Done Right I Have to Do It!

Do you ever find yourself making that statement? Do you struggle with your staff delivering inconsistent service quality or handling customers with your level of professionalism? Do they sell your products or services as well as you? For many business owners, the answer is NO! So what is the solution?

The default solution for too many entrepreneurs is to work lots of hours and do it yourself. If this sounds like you, how is this “solution” affecting your lifestyle, time with those you love, and your amount of recreation? There is a way out! Put systems in place so others can do the tasks the same way you would, or possibly even better.

Develop and Implement a System

Systems are your way of empowering your team to perform the work on a level as if you were doing it personally. View the word SYSTEM as an acronym for: Saving You Stress, Time, Energy, & Money! Systems reduce your hours and stress by empowering average people to do great work. Systems also insure that customers receive the consistency they expect - each and every time. Sound too good to be true? Ask yourself: “How do other businesses grow beyond the owner?” - by creating systems to run the company, freeing the owner for strategic growth initiatives. Below are some simple guidelines for creating systems that work.

Keep them simple

If the system or documented process is complex, then keep working to distill the activity down to its critical essence. When you thoroughly understand something, and present it well, it will become simple for someone else to replicate. When is it truly simple? - when someone else, unfamiliar with the task, can complete it using only what you have documented in the system.

Write only systems that make money or reduce risk

You are not in the business of creating manuals, so only create a system if it simplifies a task, improves quality, or speeds up a service. This will keep you focused. Start small and grow the system(s) with time.

Assure the systems you develop are used

Have you heard of the proverb: “What gets measured or monitored gets done”? As you create systems or document processes, include a monitoring or measuring protocol to insure the systems are used.

Make the system selectively accessible

Not every team member needs to use every system. Your master manual should contain all of your systems. Individual team members should have copies of only the systems that involve them. This makes it easier for someone substituting as backup or when training a new team member.

Get the team involved

Who better to help document the systems than the people who are currently doing the tasks? The team can also help you improve the current systems by identifying redundancies and what’s not working.

Make sure the team knows their role in the overall process

Unfortunately, it is normal for team members to disagree on the sequence of tasks and how to best complete them. Team members need to know their role and how it affects the overall results. Clearly written and agreed upon roles (job descriptions) go a long way toward accomplishing this. So start the systemization process with clearly written job descriptions.

Documenting the systems in your business may seem overwhelming. Don’t try to do them all at once. Document one or two systems, implement them and monitor the results. Once you are satisfied, move to the next one.

So where do you start? That’s easy – select a task that you are currently doing (but shouldn’t be) or one that can fix a problem you are currently facing such as product rejects, low sales conversion rates, poor service or customer satisfaction, etc.

A final thought: take it one step at a time – but just do it!

How to Craft a Raving Fan Strategy

Imagine what your business would be like if you had 500 raving fans on the street? What would you be able to do? What would you be able to accomplish?

Raving fans are more important than any sales team you could assemble because they have credibility. A sales team has to rave about your business a customer doesn’t. If a customer is a raving fan, people pay attention.

This article will describe a step-by-step process for creating a raving fan strategy, which involves developing the ideal buying experience for your customers.

Step 1: Draft a list of possible touch points that your business has with your target market. Start with advertising, social media, and any other method that you might use to reach out to your potential customers.

Step 2: Detail expectations for each touch point in the process (i.e. how would the customer like the process to work in an ideal world). What matters to your customers most is how you make them feel. In this step it is critical that you identify the emotional factors that you think are most important to the customer.

You should also include a few positive surprises, CNEs, (Critical Non-Essentials). CNEs are little touches that will result in your customer’s experience significantly exceeding their expectations. Obtain input for this section from your own experience as well as customer research and feedback information to which you might have access. A well designed survey will also provide valuable insight.

Step 3: Describe your recommendation for the ideal process that can actually be executed by your company. This recommendation has to be realistic and should address the customer expectations in a way that will differentiate you from your competitors. Your recommendation should be aimed at the best that your company can accomplish, not average or good enough. Provide as close to the customer ideal as possible while still being able to deliver, at a superior level, those experiences that are most important to your current and future customers.

It’s probable that you cannot meet every customer expectation down to the smallest detail, due to organizational constraints or some other very good reason. But keep in mind that if you cannot operate at a level that exceeds their expectations, you gain no competitive advantage.

Step 4: Detail how the new process will be implemented. This section should include a description of the changes required, the new standards to be implemented, who will do the implementation, how they will be paid (if there are financial implications for the change), and how the changes and the reasons for the changes will be clearly communicated to all involved employees. You will also need to ensure that the expectations of your customers are clearly communicated to each employee.

Step 5: Provide the measures and goals associated with each new customer experience initiative. For example: a new measure might be the percentage of deliveries completed as promised to the customer, with a goal of a 95% compliance - i.e. 95% of deliveries are completed as promised to the customer. This section will also indicate who will be responsible for the development of the measurement process and tools (e.g. development of an Excel template to be used by all stores or departments), who will be responsible for the weekly tracking/data entry, etc. This section should also include a sample template for the measurement process.

Step 6: Create an implementation timeline that illustrates when the process will be developed, when it will be implemented on a test basis, when will it be reviewed and fine tuned, etc. Be sure to include human and other resources that will be required in your timeline planning.

Step 7: Describe how you will measure customer reaction to the new customer experience enhancements. There are numerous ways to accomplish this, from surveys and refer-a-friend rewards programs to simple POS (Point of Sale) questions.

Step 8: Create a plan to ensure that the changes and new processes will be sustained. These new enhancements should become an integral part of how each store or department functions. Remember, what you don’t measure will eventually fade away.

Never underestimate the effort required to create effective organizational change. Not all employees will embrace the change in the beginning. In fact, some will openly resist it. Clear communication of what is being done, why it is being done, and your expectations for each employee, along with a healthy dose of persistence will lead to success. In most organizational change efforts, setting aggressive, but realistic expectations of all employees is your greatest source of leverage. Employees will rise to your expectations if they understand why the change is important and what you want them to do. Involve employees in the development of the new processes. Many times they will have a different perspective than the owner or your coach. We can benefit from that additional perspective.

The only way to enjoy the benefits of a raving fan base is through continuous improvement of your customer’s experience. We all know that there is no standing still in business. We are either getting better or going backwards. It’s up to you!

What is Your Conversion Rate?

When I ask business owners this question, most reply with either “I don’t know” or “What do you mean by conversion rate?” On a macroscopic scale, conversion rate is simply the percentage of sales leads that you convert into a sale. However, there is much more information and value to be gleaned from tracking your conversion rates.

In coaching my clients, I focus on five ways for increasing the profitability of a business:

1. Leads

2. Conversion Rate

3. Number of Transactions per year

4. Average value of sales for the year

5. Profit Margin

 

Of these five ways, increasing conversion rate is generally the second easiest and most cost effective area for improving sales. Despite conversion rates being one of the easiest areas on which to focus and improve, from my experience as a business coach, it is also the one most neglected by business owners. Here is how to change that!

Why is conversion rate so important?

First, understand its importance and why conversion rate warrants your focus and monitoring. Do you realize that if your business has a conversion rate from lead to sale of 20 percent and we work together to increase that conversion rate to 30 percent the result is not just an increase of 10 percent. It’s a whopping 50 percent increase! This in turn means that your revenues (on average) would increase by 50 percent! Do I have your undivided attention now?

Test and measure your sales gates

 

Second, the key to increasing your conversion rate is to test and measure it at every level of your team’s sales process. To do this you need to identify and break down your entire sales process into the smallest “chunks” possible so that you have a series of standardized “steps” your team performs with clients as it takes them through the sales process. Let’s call these steps “gates within the sales funnel.” The key to closing a sale is to get each prospect through all of the gates within the sales funnel.

For example, let’s say you are in the IT business. Your sales funnel could look something like this:

Gate 1. Initial contact: begin a relationship with a decision maker from a large list of leads

Gate 2. Discovery: invest time learning about prospect’s issues, and how you can help, as well as meeting others involved in the decision, and determining the timing and budget available for purchase.

Gate 3. Demo of Product: get them excited about wanting to purchase

Gate 4. Proposal: include in the license agreement, if not too complex.

Gate 5. Signed agreement: get down payment. Measuring the conversion rates from Gate 1 to Gate 2, Gate 2 to Gate 3 and so on is key to knowing what your conversion rate is at each critical stage in the sales process.

Work on the bottlenecks

Third, have every sales team member measure their own conversion rates so that you identify the individual conversion rates of each of your sale team members. Then average all of these percentages to obtain an overall team conversion rate for your sales.

 

Finally, identify where the largest “bottlenecks” are for individuals and the team. Then work on improving the conversion rates between these gates first. Innovate and coach your team to dramatically improve the percentage of prospects they get through that gate. Let’s flesh out this example.

 

Let’s say that out of 1000 leads your sales force, on average, has discussions with 100 decision makers. That is a conversion rate for Gate 1 of 10%. Next let’s assume that your sales force averages scheduling 30 discovery sessions. Your conversion rate for Gate 2 is 30%. From those discovery sessions your team has determined that they can help a certain number of the prospects with your product and are able to schedule a product demo with 15. Gate 3 has a conversion rate of 50%. After providing a demo of your product, your sales team averages 3 who are interested enough to entertain a proposal or discuss making a purchase. Your conversion rate for Gate 4 is 20%. Finally your team is able to convert an average of 1 out of 3 into a sale, resulting in a Gate 5 conversion rate of 30%.

 

What is your overall conversion rate? It is 0.1%! Just increasing that to 0.2% will double your revenue! Do you see the value in monitoring your conversion rates for every step in the sales process? Where would you focus your attention to dramatically improve your sales? Instead of wringing your hands and saying “I have to get more sales”, you now have the information enabling you to do exactly that!

I Just Can’t Get Good People!

Do you find yourself saying this?

 

The US Department of Labor reports that 2 out of 3 new hires prove to be a mistake within the first year – at a cost of thousands of dollars for each departing employee. Hiring mistakes negatively impact productivity and erode your company’s profits. In Jim Collins’ landmark study and book “Good to Great” he states: “The good-to-great leaders understood three simple truths.”

  1. “If you begin with ‘who’, rather than ‘what’, you can more easily adapt to a changing world”
  2. “If you have the right people on the bus, the problem of how to motivate and manage people largely goes away”
  3. “If you have the wrong people, it doesn’t matter whether you discover the right direction; you still won’t have a great company.”

What would your business look like if your hiring system delivered the right person 75% of the time? Here are some tips to stack the odds in your favor.

 

Create thorough job descriptions
Most business owners use job descriptions to insure the candidate understands the positional duties and responsibilities; but here’s where many fall short. A good job description should also include a list of the skills and competencies required to perform the tasks and duties expected. Other information that should also be included:

  • Certifications, education, and experience required or preferred
  • Work environment and any special physical requirements, such as ability to lift 70 lbs, stand 8 hours per day, etc.
  • How we measure success; the Key Performance Indicators (KPIs) you will use to evaluate performance for this position.

Well-written job descriptions for all team members help keep you focused on what you want, facilitate quick hiring when the need arises, and communicate your expectations to candidates and current employees.

 

Market for employees, just like customers
Recruiting, like marketing, is most effective when it is targeted, planned and executed with consistency. Start with the basic question, “What makes your company a great choice for potential employees?” Having a written Culture Statement that is alive and well will help you to answer this question. Cross checking your Culture Statement with your employees’ experience should be a regular practice. Now is a good time to ask your current team – they’ll tell you.

 

Next, identify the best ways to reach potential employees for the position you are hiring. It will likely vary based on the position. Develop the ‘advertisement’ to attract them and be creative. The rules of good advertising apply – great heading, good content and a call to action. Include the aspects of your company that make it a great place for the type of person you wish to attract, as well as the “spirit” of the person you desire. Additionally, always be on the lookout for good people who can bring value to your organization. Make recruiting something that is ongoing, not crisis driven! Remember “Good to Great”.

 

Make hiring a De-Selection Process
Your time is valuable! Don’t waste it interviewing potential employees who don’t possess the character qualities you need or don’t fit into your culture. You can improve your results and save time by incorporating a de-selection process, using a phone screen and group pre-interview assessment to test for integrity, work ethic, and passion. If you design the group pre-interview assessment properly, those that have the “fire in the oven” will stand out and those who don’t will leave (de-select themselves), saving you time and hiring mistakes.

 

Your written Vision, Mission, and Culture statements are a valuable tool at this point to assist in the de-selection process. During the group pre-interview meeting use these tools with the position’s KPIs to communicate the high standards of behavior and performance expected by all within your company. If you effectively communicate these criteria, those that you would not want on your team will depart, leaving you with the “cream of the crop”.

 

What are you looking for at this stage? – Passion, confidence, and the desire to grow. These attributes are much more important than knowledge or experience, which can be taught. Stay disciplined and only interview candidates who make it through both the phone and group interview steps.

 

Once you decide to schedule someone for an interview, email them the job description so expectations are clear before they arrive. Have the candidate meet with multiple people, when possible, and employ behavioral interview techniques and tests to probe for the skills and competencies that are most critical. Be willing to turn down candidates who are not the right fit and don’t settle for less than the best!

 

Believe You Can and You Will
Sounds simple, but too often we defeat ourselves before we start. Telling yourself ‘I just can’t get good help’ becomes a self-fulfilling prophecy. Instead, start telling yourself “I have a great team committed to achieving our goals”. Even if it’s not yet true – YOU can make it so. Remember the objective when hiring is to be able to say 3 years later that, “Knowing what I know now, I’d hire this person again in a heartbeat!”

 

 

 

Is Your Business Working Harder Than You?

Are you working harder than your business, or is your business working harder than you? If you are working harder than your business, you are among the many self-employed who have succeeded in purchasing a job for themselves! Do you aspire to be an entrepreneur? Then you must figure a way to create a business that works harder than you, so that you can use your spare time to launch other business endeavors or to enjoy the lifestyle that typifies the successful entrepreneur – time with family and time for personal leisure pursuits. So how does one get their business to work harder? There are 6 steps to creating a profitable business that works without you having to be there every day:

1. Mastery: Of time, money, delivery, and destination.
2. Niche: Mitigating price-discounting pressure.
3. Leverage: Systemizing the business.
4. Team: Getting the right people on the bus.
5. Synergy: Able to grow a strong stable enterprise.
6. Massive Results: Multiple streams of income.

Each of the six steps builds upon the previous so let’s dig a little deeper.

Mastery: from chaos to order

Time is our most valuable asset. We can regain lost income, but can never regain lost time. There are four activity categories into which we can invest or waste our time:

1. Not urgent, not important (time wasters used for escape)
2. Urgent, not important (day stealers that scream for our attention)
3. Urgent, important (must be handled right away)
4. Not urgent, important (strategic issues that will determine our success)

1 and 2 are time wasters for the business owner. 3 and 4 are the difference between working in your business and working on your business. 4 is working in what I call the Zone and should represent 80% of your time. Working in the Zone will prevent many of the urgent/important from occurring.

Do you know where your business is financially? What is your breakeven? How about your cash flow – can you predict it? What is your profit position – how accurate and real-time is your information? Is your most valuable tangible asset (your business) increasing or decreasing in value? Is your business consistently delivering your value proposition to the marketplace in such a way as to not just satisfy your customers, but create many raving fans? This is called the WOW factor. And finally, are your business goals aligned with your personal goals so that when your business is working harder than you, you are living your desired lifestyle?

Niche: effectively marketing your USP equals predictable cash flow

Discounting your prices in the face of competition is devastating to your bottom line. Let’s, for example, assume that your gross profit margin is 40%. If you discount your prices by 10%, your sales must increase by 33% to maintain the same gross profit dollars! How does one avoid such damaging action? By creatively crafting your marketing around your USP (Unique Selling Proposition)! Done correctly, this will carve a niche in the marketplace that you alone occupy, thus insulating your business from the discounting frenzy produced by a market crowded with competitors.

Leverage: creating efficiency equals more time for the owner

If you are the typical business owner, you are the hub of a wheel. The spokes are the channels of decision making from all aspects of your business. Get the picture?

In our desire to control our business we have imprisoned ourselves, the owners. Additionally, because we have not implemented written systems to run our business we have become vulnerable to certain key individuals within our organization. These key players are very good at what they do and if they leave the company, the consequences will produce a significant setback for the business.

The answer is to systemize the routine and humanize the exception. Systems should run the business and people should run the systems. The Japanese taught us this hard lesson in the 80s. Systemize your business and you will leverage your capacity as the owner. Until systems run your business, you have a job. You will never be able to extract yourself to work on your business instead of in your business. Lifestyle improvement will remain an unreachable dream.

Team: having the A-Team run your business equals structuring for growth

Ask business owners what represents their greatest headache, most will tell you “employees.” You’ve heard it said:

“People are a company’s most valuable asset.” That is not true! The right people in the right positions are a company’s most valuable asset. In the book “Good to Great” Jim Collins writes, “Those who build great companies understand that the ultimate throttle on growth for any great company is not markets, or technology, or competition, or products. It is one thing above all others: the ability to get and keep enough of the right people.”

Synergy: a well-oiled business machine equals freedom!

This is when 2 + 2 = 5. Too many business owners after experiencing a little success try to expand through duplicating outlets or franchising before they have successfully completed the four previous steps. As they grow, because of insufficient systems and/or the wrong people on their executive team, cracks start to appear in the foundation. So they retreat and go back to when it was only one business location that they can control with their presence. In fact, if the owner carefully built a strong foundation on the four previous steps, the cumulative effect of this smart work will be significant income with time to enjoy it. Congratulations – you now no longer have a job! You are a successful entrepreneur!

Massive Results: diversification through multiplication or acquisition

As a result of what you have learned by taking your business through this process, coupled with the time and money to leverage, you can create multiple steams of income and wealth by multiplying your business concept or acquiring other businesses and taking them through the six steps. Or, you can retire with a lifestyle that is the envy of most.