A simple approach to measuring your success To keep your business on track to success, you need to keep a close eye on specific Critical Success Factors (or CSFs) in your business. The best way to monitor these factors, is by measuring them against Key Performance Indicators (or KPIs). There are just three kinds of KPIs to be aware of. 1. Generic KPIs You can identify these by asking yourself:
For example, a radiologist may get 'sales' from doctors' referrals. Their first CSF then, might be in developing effective relationships with doctors. A good KPI to measure this may be the number of referrals they get from doctors. Others could be the average transaction value, number of transactions per doctor, and so on. 2. Industry-specific KPIs These are indicators that are specific to your industry. Using our earlier example, let's say the success of the business depends on getting the X-rays done quickly, reputation for safety and patient care. The KPIs here may be the number of x-rays performed in a day, the number of incidents, and the level customer satisfaction. 3. Initiative-specific KPIs These are specific to an activity or initiative. For instance, if your business comes chiefly from incoming calls, by training your team to better manage and convert these calls, you can compare conversion rates from before and after the training. Once you know how things are working, you're in a position to control and better manage your results. Key frustrations Seeking your customer's key frustrations is a major key to developing a great business. Once you understand this concept and implement what it means, you'll reap significant rewards. What are key frustrations? To explain, let's use an example. Time is a major frustration when people deal with many businesses today. For instance, when you arrive at the hairdressers in time for your appointment, are they ready on time? Most of the time, they're not. Imagine if they said, "If we keep you waiting, the next haircut is on us." Would that increase their business? It would certainly be worth testing. What about visiting your lawyer or dentist? Again, waiting time may be a key frustration. So any business that had systems to make sure their customers never experienced that frustration would surely see an increase in business. What do your customers say? There's no real secret to finding out what your customers' key frustrations are. All you need to do is ask them! And by defining your customers' key frustrations, and building systems in your business to reduce or eliminate them, you're giving your business an external and a powerful focus. Creating personal business plans There are so many elements within a business that are critical to growth of the company, and to the growth of the people within it. Creating personal business plans can be an effective way to manage these different elements. Steps
The 4 key areas of a personal business plan
They'll also need to define what metrics they'll use to demonstrate they've accomplished their objectives. Simulation: growing in popularity as a management tool According to a recent study more than 40% of companies have used a management tool called "simulation." The same survey also identifies this tool as one of the "Top 5 Tools of Successful Companies." What simulation does Simulation helps you learn the dynamics of your business in a short space of time, by providing a hands-on way of testing business and competitive decisions. In a successful simulation, you can pre-test how a proposed business strategy will stand up under the moves and countermoves that competitors might make in the marketplace. Can simulation help you? Simulation may be a tool worth considering if you answer yes to any of the following questions:
Holding a simulation session Simulation can vary from simple paper and pencil "role play" exercises to modelling complex scenarios using business simulation software. To conduct your own business simulation, you'll need develop a full understanding of your current situation by gathering all the relevant information you can about your business, including your market, your industry and your competitors. Using this information, you can then hold a simulation session with your team to test 4?6 different strategies under a variety of scenarios. Simulation can give you the chance to test possible short and long-range consequences of your decisions, without the 'real-world' risks. Checklist for success In business as in life, success comes from hard work and flexibility. Compare this ten point checklist to your business.
Getting your people involved This is a story of a business that started a short time ago, with very little capital, and that's now turning over $3 million a year and exports internationally. The business designs, makes and sells special equipment for handling sheep. One factor that played a big part in their success was in how they involved their people in the company's development and growth. Here's an example of the kind of thing they did: Let's say you're a woolgrower and you've just bought one of their machines. Within a week you get a 'thank you' letter. Naturally, you're impressed that someone cares enough to do that. But then two weeks later, you get another letter, this time from the person on the production floor who actually welded up the machine! The letter talks about how "it's good to know you've bought one of our machines" and how "I really hope it's working out well for you". The letter even suggests that "...if anything at all looks like it's not exactly right, please give me a call because I helped make it and I'd hate for the machine not to be performing exactly right for you". The effect was amazing. The owner reported, "I've had farmers on the phone almost crying with emotion they can't believe that anyone could be so human". "The guys on the factory floor say it's terrific, too. The effect on their motivation has been incredible". What a way to build a team. What a way to get everyone involved with the customer. Why not try a letter from your "factory" floor, a letter from the administrative support team or a letter from the front desk. You might be amazed what happens. Providing service a la carte Imagine going to a brand new restaurant and trying to place your order without having been given a menu. Do they serve French cuisine? Or Italian? Is it gourmet or simple fare? How much should you expect to pay? You may just decide it's all too hard and simply leave. Now consider your own business from your customers' and your prospects' points of view. Have you made it as easy as you possibly can for them to decide to do business with you? You don't have to be in the restaurant business to be able to offer a menu to your customers. Creating a 'menu' or schedule of the products or services you offer gives your customers a clear picture of how your business can meet their needs. Creating your product or service menu Start by looking at what your customers need. You may have already held a Customer Advisory Board with some of your better customers, to get a better understanding of their needs and expectations. With your team, review the range of products and services you offer and identify if there are any that are complimentary to one another. Now look at how you might package those various offerings into a 'menu' or schedule of offerings for your customers. Remember, the essence of really delivering extra value is in the fact that clients will value a service range more if it really delivers some tangible benefits to them. Here's one way to structure a customer menu, using a motor shop as an example: Choice 1. Bronze Care Six-monthly full vehicle service that includes- Oil filter change, check brake and transmission fluids, battery, tyre pressure, exhaust, electrics. Choice 2. Silver Care Bronze Care plus- Full car detailing, inside and out Choice 3. Gold Care You get all from Bronze and Silver Care plus- Full pick up and delivery service from home or office. By bundling your products or services into a 'menu', you give your customers a clear understanding of what they can expect to get and how much they can expect to invest. They're in a better position to make a decision to do business with you based on what they need, and you're in a better position to charge according to the value you're delivering for them. About Our Consulting Services
We are members of the Principa Alliance, an international network of business consultants and our goal is to help you build a stronger, more profitable business and enjoy a higher quality of life as a result. When you work with us to improve your business you're gaining access to a global knowledgebase and a wealth of consulting experience that is so much more powerful than any one firm could offer. By combining our knowledge of your business, the personal relationship we share with our clients and the consulting tools, support and networking power of the Principa Alliance, we can help you achieve more with your business than you imagined possible. In short, we can, and will, do so much more for you than just 'keep the score.' Contact us today to discuss how we can help you implement any of the topics described in this newsletter, and help you build a business that delivers on its promise. DISCLAIMER Information provided in this publication is intended as general information only and should be considered carefully for your own business situation before use. This firm and any associated companies accept no responsibility or any form of liability from reliance upon or use of its contents.
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