If you can’t answer these three questions, you won’t increase revenue

In the words of Peter Drucker, patron saint of business leaders everywhere, “there is only one valid definition of business purpose: to create a customer.” Many professionals in private practice, such as designers, health care providers, architects, etc., rely on the quality of their work to sustain the growth of their business. At some point, repeat business and word-of-mouth referrals become insufficient to supply revenue required to grow (or sustain) a business. Larger companies often face the same challenge, but this post is directed more towards small businesses run by professional service providers.

Whether you have just set up your own professional service business, or are looking for more “tech savvy” ways to grow revenue, invest time in understanding the answers to the three questions below and you will see the payback very quickly.

  1. Who are my contacts, leads, and customers? Customer Relationship Management (CRM) has evolved several generations since the Rolodex. A web-based CRM database gives you secure, fast, permanent access to the contact details and history of interactions with everyone who’s paid you, and everyone who hasn’t – yet. Ideally, your CRM system will be integrated with marketing and content management tools (see below) to work more efficiently.
  2. Is my most engaging content reaching my most valuable customers? Brand reputation is maintained by the quality of the products and services their companies provide. But at any given moment, a very small percentage of the customers who are aware of a brand is actually purchasing from the company. The rest are either recent buyers (potential repeat customers at risk of buyer’s remorse) and future buyers looking to learn more about a company’s capabilities and form an emotional connection (because all commitments, financial and otherwise, are made with the head and the heart). To establish and maintain this connection, a firm first needs to generate great content, and then ensure it reaches key audiences through the channels they use most. This requires content management across multiple channels: web, email, blog, social media, and advertising. A structured approach can prevent spinning wheels and slipping down rabbit holes: here’s a very pragmatic checklist for creating a blog from Build.
    • Which tools? Squarespace and Jetstrap are powerful and intuitive website building tools, WordPress is a leading blog management site that can easily add more functionality, Verticalresponse makes managing email marketing with analytics very straightforward, and a presence on LinkedIn, Twitter and Facebook are table stakes for any business these days.
  3. Which lead channels are producing the most profitable sales? Don’t forget, you’re doing all this to make more money…so the last step is to check that all your contacts are reading all your content and actually buying more of your stuff. To do this, make sure the tools you choose provide the data–or even better, a button to click that gives you the answer–about which lead channels are producing the most profitable revenue streams. Should you increase your advertising budget, block out more time for in-person events, encourage more personal referrals, or nurture more repeat business?
    • Which tools? The CRM tools referenced in #1 above will all provide a sales funnel and lead analysis package. Of course this can be done with good old fashioned spreadsheets, too: feel free to contact me if you need help getting started.

Hyperopic Leader Syndrome

No, I’m not talking about a leader who is overactive on Instagram. Hyperopia is the medical term for farsightedness, or the inability to focus on things that are right in front of us. Whether you worship at the temple of Jobs, or have gone from good to great, fallen or lasted with Collins, you will already be familiar with the emphasis on vision as a prerequisite for leadership. But tripping over the details can bring even the most visionary leaders down.

Recently Obama showed symptoms of Hyperopic Leader Syndrome when the White House scrambled to articulate it’s position on NSA operations and or the extent of the problems launching the government’s health insurance website. Are you the type of leader who spends too much time focused on the horizon, on not enough on the details right in front of you?

Here are a few tips to fight off Hyperopic Leader Syndrome:

  1. Hire detail-obsessed staff: use awareness of your strengths and weaknesses to recruit team members who are going to race to check if the table on slide 37 ties to the bulleted list on slide 16 way before you do.
  2. Create a culture that rewards catching errors early: we all make decisions balancing risks and rewards, and leaders have the opportunity to build a reward structure to encourage employees to raise risks for attention and action. This approach has been translated from aviation to healthcare, and a Cambridge restaurant’s motto of “we love new mistakes” sets the tone for new employees.
  3. Run a monthly “Dr Pepper Test”: either on  your own or with a trusted colleague, run through your portfolio of accounts/projects and ask “what’s the worst that could happen?” As a simplification of failure mode analysis, create a list of the potential ways a project or account could fail, how you would test for leading indicators and put mitigating actions in place.

Armed with this knowledge, we can fight to find a cure for Hyperopic Leader Syndrome.

What experience do you have with Hyperopic Leaders? What other techniques have helped you prevent it? Leave a comment and let us know.