How do high-performance companies outperform normal business? *LHF 1311
By Jonathan Castletine-Jackson, BIR solutions
Our free plug: if you want to be a successful and sustainable fast growth or high performance company, you need to be measuring what you need to manage. Full stop. We have a range of measurement tools covering customer satisfaction, customer referrals, employees and management as well as financial analysis. To find out more, give us a call on 1300 783 3091300 783 309.
Now back to Jonathan….
There are many options a business can take to try to increase its growth and performance. Many businesses measure the opportunity for growth and success through increased activity, for example more sales people, more training, more advertising etc. And whilst this results in more action, it doesn’t necessarily translate into more or better sales.
Many businesses ask the same questions when looking to grow:
• How do I get more business?
• How do I effectively manage and motivate my staff?
• How do increase production (but not at the expense of my clients)?
All the answers you need to create growth and performance are able to be easily found from within the structure of your existing business. High-performing businesses understand this and apply what they know to effectively grow. Any business can do the same.
What defines a high-growth business?
9 times faster growth and 50% more profitable.
In their book ‘Spiraling Up – How to create a high growth, high value, professional services firm’, Lee. W. Frederikson and Aaron E. Taylor (Hinge Research Institute, 2010) gave the following results:
There is a group of professional services firms that grow nine times faster and are 50% more profitable than average.
You’ll know some of these firms such as Apple and Google. These firms actually spend slightly less than average on sales and marketing and typically receive premium valuations in the marketplace.
This does not mean that they are run to the detriment of their clients or the staff, rather they have created plans and processes that allow them to grow in a way that engages the client, or in the case of dentistry; the client.
High-growth business achieve high growth through repeat sales and referrals, Dr. Tom McKaskill in his book “Marketing for High Growth” defines high-growth potential:
…the measure of success of the sales and marketing strategy is whether the customer would buy again and/or would recommend the same product or service to someone who was experiencing the same problem or need.
Put simply, the metric of repeat sales and referrals underpins high growth.
So, how do we achieve high growth?
There two fundamental elements in high growth:
• The processes that support your business.
• The client experience and how they value your services
The nature of all business people is to create processes that are hard to implement. If left unchecked, they become unwieldy and take up more of your or your staff’s time. Time has a cost against it and if you can reduce the time, you save in costs.
Ray Kroc who created the McDonalds chain of restaurants understood the value of processes with the single goal that the product needed to be uniform and consistent in its delivery. His processes ensured not only consistency, but that they could be followed by anyone who works in McDonalds, regardless of previous experience.
The client experience is the building block of understanding what your existing clients value in your service. If you understand this value, then you are able to communicate this to your future clients.
Dr. Tom McKaskill neatly explains this point:
What we will also see is that a carefully designed and delivered customer experience dramatically reduces the sales cycle of the repeat sale. The same applies to the sales cycle of a new customer who has received a referral or recommendation from a satisfied customer. There is a direct relationship between meaningful customer experiences and subsequent sales cycles.
Creating a communications platform that allows your clients to give you feedback will uncover how they rate your service, your staff and your practice. If you have raving fans for clients, they are more likely to refer you on and help generate new clients.
Professional relationships are built on three key components:
• The ability to do the work
• The ability to deliver the work
• The build of trust on a personal and professional level
Successful organisations recognise these values and have structures in place to provide them with data that charts their client’s experience and, most importantly, how their clients rate their performance; the higher the rating, the better chance for an increase of work and opportunity to be referred on.
Networking is often incorrectly associated with events. Networking is actually the opportunities that can be uncovered primarily from existing clients to strategically introduce you to new opportunities. This strategic approach creates better qualified opportunities and introductions as:
• Your client knows your capabilities and places a high value on them
Different professions demand personalised, non-confrontational communications plans that open the opportunity for referral opposed to a direct approach of “who can you recommend me on to?”
So, to go back to the challenges that businesses face, we can now answer:
How do I get more clients?
• By understanding how my existing clients value my services.
• If my clients are raving fans, they will refer me on.
• How do I effectively manage my staff?
• By giving them feedback directly from existing clients – most people like to know they are doing a great job.
How do I increase production (but not at the expense of my clients)?
• By tightening up the processes and understanding that time has an associated cost.
• Reviewing current processes and asking yourself “does it serve?”
Recently retired from the Richard Pratt Chair in Entrepreneurship at the Australian Graduate School of Entrepreneurship, Dr. McKaskill is the author of 30 books covering such topics as new venture growth, raising venture capital, selling a business, acquisitions strategy and angel investing.
If you are interested in Dr. Tom McKaskill’s book “Marketing for High Growth”, Tom has kindly allowed us to offer it to you at no cost as a download. You can also find out how BIR to unlocks the potential of your business by clicking here.