One of the best ways to grow your business and become more profitable is to improve efficiency and maximise your return on investment (ROI). A successful, profitable business will focus on marketing and sales to keep money coming in and efficiently to slow the money going out – make every penny spent work harder.
Sometimes a single factor can significantly increase profitability. However, for most businesses, a series of minor improvements are needed across several areas.
This guide aims to help business owners identify and implement simple improvements to each area of your business to increase overall performance and profitability to maximise your return on investment. Retaining customers is essential; having spent time and money on your marketing and sales activity, why not put effort into keeping them? Getting existing customers to spend more is also easier than finding new customers – but you must do both to be profitable.
Step one: Customer service
Customer service is where your product/service meets the real world – where the rubber meets the road. This is an important area to get right, and you should invest in good people and efficient systems. Firstly, keeping customers happy will ensure they continue to use your business and refer you to others. In addition, listening to their feedback can help identify new markets, tailor your marketing and sales messaging, and gradually improve your overall delivery.
Step two: Complaint handling
If you haven’t already, create a robust system for handling complaints. Humbly paying attention to negative feedback will make you a better business. Not all feedback is constructive, but simply ignoring negative feedback can be devastating. In some circumstances, receiving negative feedback and then demonstrating how you overcame a particular issue can become a winning sales message.
Step three: Managing your delivery
Essentially, this is delivering what you promised – both externally and internally. Before you begin, ensure you track and measure your delivery against your quotes. For example, if you quoted 10hrs and it takes 20hrs, you are losing money! You either need to increase your prices or improve your delivery. Likewise, if the situation is reversed, you should ensure you’re not short-changing customers and risking dissatisfying them – potentially eliminating repeat business.
Step four: Customer loyalty
It’s easier and more cost-effective to keep a customer returning than to find new ones. Businesses should reward customer loyalty as this helps clients continue to use your products/services over your competitors – especially if your product/service is easily replicated. For example, think of supermarkets; they all sell similar products at similar prices. Therefore, their loyalty programmes are essential in helping customers spend more in their store than with their competitors. Businesses can reward customer loyalty in several ways, including offering discounts on repeat orders, retainer rates and loyalty cards.
Step five: Account management
For business-to-business customers and larger retail accounts, an account manager’s role is to nurture a client post-initial sale. Account managers are important as they can help retain clients and grow accounts. They shouldn’t be too involved in the delivery and act more like project managers or translators between the client and the business. Having account managers will allow other departments to focus on their specific delivery tasks, significantly reducing the number of general emails and phone calls.
Step six: Employee performance
Regularly monitoring and measuring employee performance will help develop your team and ensure skill sets in your business are improving. In addition, workplace culture is becoming an important hiring factor. Working with employees to understand how to get the best from them will enhance productivity and identify potential hiring benefits.
Step seven: Outsourcing
Not every part of your business needs to be handled in-house. While it might cost you more short term, outsourcing can bring in additional services and skills that might be too expensive to implement fully. An obvious example is hiring a web agency to manage your website; it is probably too costly to hire a full-term website developer. A less obvious example could be to hire a specialist in a particular market or area; bringing in support short-term can allow you to meet a critical need without committing your business to a long-term cost.
Step eight: Finance
Keeping a close eye on your financial situation is critical if you want to remain flexible and grow. As early as possible, it’s usually advisable to hire an accountant. However, to keep costs down, learn the basic principles and pay attention to the essential numbers. For example, the difference between revenue, profit and cashflow – revenue is vanity, profit is sanity, and cash is king. Understanding your financial situation can make every decision easier, whether that’s hiring, outsourcing or which projects to take on.
Step nine: Management meetings
Every business should have a formalised management meeting – even if there are just two staff members. These meetings help to ensure top-level, strategic decisions are being answered. In these meetings, avoid getting into delivery specifics and focus on your progress towards achieving business objectives. These meetings should be regular enough to progress the business without stalling productivity. Typically, longer meetings are held once a month, and smaller check-ins are held once a week, depending on the size of your team
How ETC can help
If you need help streamlining your business operations and improving your return on investment, please get in touch.
If you are new to ETC, why not contact us for a free new business review? We’ll spend two hours with you, giving you professional coaching and will leave you with actions for immediate implementation.