Something’s not right. Your company’s growth is limping along, or worse — you’re tumbling toward serious trouble. You know you need to make changes, but taking action can feel a bit like playing that arcade game Whac-A-Mole. Like hitting the vinyl-covered cartoon moles every time you see one, you keep trying to address new problems as soon as you find one.
But, no matter how many times you hit them, the moles — and the problems — keep popping up.
You’re keeping “start-up” hours, you can’t remember the last time you took a real vacation, and your big plans for a new offering seem destined to remain in that folder on your desktop. You know the one — you put it there to remind yourself to do the work you love, and now it’s buried under drafts, spreadsheets, and a few stupid booty-dancing GIFs.
Clearly, fixing daily screw-ups and “urgent” matters won’t turn your business around. You need to address the core issue. But how are you going to solve whatever is wrong with your business, if you’re not sure what that is?
How are you going to jump-start your business, if you aren’t sure what problem to fix first?
Turns out, it’s not that hard. By the end of this article, you’ll have a system to help you figure out the one thing you need to fix in your business.
A couple of years ago, on my quest to design my business to run itself, I had the privilege of having dinner with business consultant Adrienne Dorison, who explained that every business goes through a flow of steps to be sustainable: leads, conversions, and deliverables. She explained that bottlenecks typically happen in one of those three steps, and that if you look at each one separately, you can find whatever is slowing down your business.
I was fascinated. Like you may have done once or twice (or dozens of times), I had tried to add products or services in order to increase sales, but when an offering didn’t bring in the clients — or enough cash — I determined it was not meeting my ideal client’s needs and moved on to the next mole, er, idea. I hadn’t taken the time to evaluate each step in the sales process to figure out which step needed to be tweaked.
When I further collaborated with Adrienne, we realized that are actually four steps. The fourth is collections, or cash.
In writing my latest book, Clockwork: Design a Business to Run Itself, I renamed these four steps:
- ATTRACT – Bring in new prospects interested in the company’s offering. Every business needs to attract prospects, or leads, which are inquiries into your product or service. Leads feed your sales. No leads and your sales will dry up, because you have no one to sell to.
- CONVERT – Turn a portion of those prospects into customers. The responsibility of sales is to convert a lead to a paying customer. If you have all the leads in the world, but you can’t convert them into sales, your business is going under.
- DELIVER – Supply the customer with the product or service as promised. Deliverables are the processes and services necessary to properly deliver on what you sold the customer. If you don’t deliver on what the customer buys, they will seek a way out … sometimes canceling their order, sometimes seeking a refund, possibly spreading the word about how you stink. Can’t deliver? You can’t stay in business.
- COLLECT – Ensure that the money promised by the customer is gathered.
If the customer doesn’t deliver on their promise to pay you, you are in trouble. If you don’t collect the money for the work you do or can’t keep the money (because the customer takes it back or you blow it), you are out of business.
(Confession: I renamed the steps as an homage to one of my favorite bands: AC/DC. What? It’s easier to remember!)
Think of the steps like links in a chain. Your chain is only as strong as its weakest link, which means in business, we must do all four steps well. What you need to do is find the weakest link — the area of your business that needs tweaking — and then fix it first.
So, how do you know which link in your chain — which step in the sales process — is the weakest?
What you need to do is first identify how you measure progress (or lack thereof) in each of these four steps, and your goal for each. The goal of metrics is to measure the effectiveness of your company, and likely areas to find bottlenecks. The metrics act as a simple initial indicator that something is askew and needs your attention.
A metric is usually a number. It can also be a binary (yes/no or on/off). Or it can be something else, but a metric is always measurable and comparable. A metric sets the expectations, and when the actual events that the metric is measuring are higher or lower than expected, it indicates that an investigation of the situation is appropriate, and a resolution may be required.
Ideally, you want at least one or two metrics for each of the four steps, and no more than eight in total: Attract, Convert, Deliver, Collect. Let’s go over some examples of metrics you could use to evaluate your business:
- ATTRACT – How many new prospects do you need to attract every day, week, or month? How many new walk-ins do you need to get in that same period? How many referrals do you need? You could also break these numbers down into marketing categories. So, for example, you might track how many new prospects you must generate from email campaigns vs YouTube vs conventions.
- CONVERT – What percentage of your prospects do you need to convert into paying customers? How many sign-ups do you need for your program? How many prospects do you need to buy your big-ticket item?
- DELIVER – What percentage of your clients or customers do you need to transition to deliverables? So, how many do you need to remain with you through the delivery process? How many do you need to go for the upsell, if you have one?
- COLLECT – What percentage of your clients do you need to pay in full right away? How many do you need to pay on time? How many do you need to pay within 30 days, or a week, or within 24 hours?
Once you’ve set your goal metrics for each of the four steps, then you need to track your success in these areas. By setting up a simple spreadsheet, you can easily get a visual on the health of your business within the flow of the four steps.
It’s simple: If you don’t meet your target percentage in one of the four steps, you know you need to fix that area of your business first.
Let’s say your business teaches entrepreneurs how to get publicity and media attention. You have a live event every six months, which usually sells out in the first week of launch. And let’s say your successful run ends. More than once, you’ve struggled to sell all of your tickets before the event. The last event didn’t sell out.
As I said above, something’s not right. But what is it?
If you didn’t have your ACDC metric system in place, you might think…
“Maybe I shouldn’t do live events anymore.”
“Maybe I need to do one live event every two years, instead of twice a year.”
“Maybe I need to charge less per ticket.”
None of those ideas are based on any information. You’re just whacking at the problem. Maybe it’s this; maybe it’s that. Maybe it’s everything.
Fortunately, you’ve been paying attention to your numbers.
Since you know the problem is one of the four steps — Attract, Convert, Deliver, Collect — you go to your spreadsheet and look at your percentages. You notice that you are still generating enough leads to meet your goal. Then, you notice that your conversion rates from speaking engagements are right on target, but your sales page conversion rates are way down.
By tweaking your sales page, you are able to get your conversion rates back up to the target percentage. Ticket sales pick up and you’re back on track.
Will there be other problems you’ll need to address? Sure. But when you look at each of the four links in your chain one at a time, you’ll be able to figure out which one you need to fix first.
The beauty of this system is, once you’ve tracked and tweaked for six months or so, you won’t have to bang around trying to solve this problem and that crisis in constant stress mode. Nope. No more.
Now you’ll be able to take a look at that spreadsheet and assess the health of your business in minutes.
Even better — you’ll be able to fix the problem quickly, grow your business efficiently, and have time to do the work you love.