Running a business is a challenging endeavor. For most owner/operators the business of the business gets in the way of the running of the business. The successful owner learns early on that the secret to a successful business is in systems. By creating a system for handling each of the phases of running the business, employees can be trained and their effectiveness measured. Great systems free up the owner to spend time with her family and to focus on the future, which are the places an owner needs to be.
The following six systems should be in place in every company. If you have these systems in place in your company, congratulate yourself. You are a testament to the value and benefits that these systems offer. Use this information as a stimulus to review your systems and look for ways to make them even better. If this is new to you, don’t be overwhelmed. Select one area, involve the employees in your company responsible for that area, and develop a well-defined, step-by-step, measureable system for that area. You’ll be amazed at the difference it will make to your success.
1. Prospect Attraction
You need to have a system for attracting your ideal customers. Most businesses try to attract everyone with a checkbook. They spend a lot of money and time then fail to attract valuable customers. If instead you do the opposite and get very clear about your ideal customer and focus a diverse and consistent marketing program on attracting just that person, you will find that you will attract more customers than you can handle.
2. Prospect Conversion
If you aren’t converting a very high percentage of the prospects you attract to customers when they call or come in to your office, the time and money you are spending on client attraction is wasted. Your customer engagement system should require every customer event from the first phone call to the close of the sale to be measured and evaluated for its effectiveness. The secret to making this work is to follow a script and a system every time anyone from your office (including you) talks to anyone on the phone or in person.
3. Customer Loyalty
You can attract and engage customers all day long, but if you don’t serve them well, you will eventually burn out. Traditional customer service is no longer good enough. Customers who are merely satisfied think nothing of using your competitor the next time. When you have a streamlined system in place for building customer loyalty, you can turn them into raving fans who constantly refer their friends and family, which in turn makes your customer attraction and engagement so much easier. This means making sure phone calls are promptly answered and returned and that the process of working with you is clear and understood by your customers. Here’s the key to this system: it can’t all depend on you. You’ve got to have a team in place to make this work. More on that below.
4. Customer Retention
Having a system in place for retaining your customers is the key to your happiness and your customer’s as well. This is the single most important component of creating a satisfying and sustaining business and represents the biggest shift you can make in your thinking as a business owner. You’ve got to have a system in place for keeping your customers for life—ongoing communication like a monthly newsletter, possibly a membership plan, and a plan for becoming your customers’ advisor of choice for matters related to your goods or services, the business they turn to whenever they have any questions, not because you are going to meet every need, but because you can help get their needs met every time.
5. Measure Performance
Whether you are a team of one or an office of hundreds, you cannot successfully do this unless you measure and evaluate the efficacy of your activities. Every one of these systems is designed to assure that you are getting the best from your activities each and every time. Performance measurements enable you recognize you’ve found an improvement in your systems. They also tell everyone on your team exactly what is expected of them and whether they are meeting those expectations. You have people around you who take care of things like answering the phone, taking and filling orders, and resolving customer questions. The key, though, is that your team has to be accountable to a system, processes, and standards. And it can’t be a system they create, because they won’t. You have to give it to them and hold them accountable to it.
6. Managing Your Numbers
I know it’s not exciting, but as a business owner, you’ve got to be watching your numbers. If you’re not watching the right numbers, you are losing a lot of money. Every week, you should know how many calls you received, how many of those turned into revenue, how much money was collected, from whom it was collected, and who owes you money. You should be receiving a dashboard of your key performance indicators regularly. At a minimum, your dashboard should include a profit and loss statement, a balance sheet, and a statement of cash flows. It should include graphic representations of key ratios and your performance against goals you’ve set in key performance areas. And you should receive a report that tells you by the tenth of the percent how you are varying from your budget.
© Copyright 2011 by Bill Gschwind, Alden Pearson, P.A. All rights reserved.