5 critical actions that drive profitable growth

Have you ever felt out of control? If yes, there’s a good chance you are.  In fact, that’s probably true for most of us at least some of the time.

Let’s face it, we live in a world in which being busy is a badge of honour. When asked how we’re doing, we rarely focus on how we’re actually feeling, but tend to share the details of our schedule, all the time smiling because we’re just a little proud.

And while being busy may not be a bad thing, in and of itself, it’s a short jump to feeling out of control. It’s as if the success we always craved suddenly begins to pull us in so many directions that we don’t feel we are giving our best in any aspect of our lives.  And yet we seem to justify that feeling as a by-product of success.

The problem is this: if your level of activity is stopping you from doing your best work, it will have a negative impact on your growth, your client relationships and your own sense of fulfillment. More importantly, it doesn’t have to be that way. Sometimes feeling out of control is less a byproduct of success and is, in fact, a structural issue in your business.

It’s time to stop the madness.

Structural busy-ness

The problem is structural if you have built a business that puts demands on your time that cannot physically be met without too great a sacrifice (like your health, family or sanity). It happens all the time, we just don’t notice it happening.

Regaining control

To regain control, there are five actions that, if taken, will ensure you have the right offer, for the right clients, delivered consistently and profitably and in a way that is clearly understood and valued by clients. That would be a good thing.

Here I’ll walk through the actions and what they can mean for your business. You can also download a free guidebook we’ve created to help you assess the steps you need to take to regain control (and in what order).

Action #1: Define your ideal client

Imagine if you arrived at work each day and every client meeting was with someone who was completely right for your business.  They wanted, needed and valued the work that you are passionate about doing.

The goal is to work with clients who energise you and value what you deliver.

The action is to define your ideal client, including both a description of your target market and a filter based on the qualities of a client that truly reflects your ideal. From there you can translate that definition into a set of client acceptance criteria that will help you assess if you will or will not work with a prospective client.

Hint: Defining your ideal is part one of this process. Examine your definition to determine which characteristics are deal-breakers; those should become your client acceptance criteria. It’s this step that will test if you are really ready to build your business around your ideal client. It takes some courage.

Action #2: segment your clients

Imagine if you knew that your clients were receiving exactly the right level of service based on their value to the business, that nothing fell through the cracks and that you were investing the right amount of time in the right relationships. It all starts with segmentation.

The goal is to lay the foundation for a tiered service plan that reflects the value of each client.

The action is to create and maintain a robust segmentation model that ensures clients are segmented based on your definition of true value.

Hint: The most critical and difficult step in segmenting your clients is defining what real client value means to you. Limit yourself to three to five drivers and you’ll force you to get very specific on what contributes to value. Use too many drivers and your clients will all tend toward the average. Use too few and you’ll likely miss out on indirect forms of value (such as potential).

Action #3: Define your offer, by segment

Imagine if you knew that clients were receiving exactly the right level of service based on their needs and the value they delivered and that you could know you were investing exactly the right amount of time and energy in every client relationship. Imagine, further if nothing fell through the cracks because you had clearly defined exactly what clients in each value tier would receive.

The goal is to craft a client experience that supports deeper engagement and aligns service with client value.

The action is to define exactly what it means to be a client in each segment, determining the level of direct and indirect contact and ensuring that your plan can be reasonably delivered with existing resources.

Hint: It’s easy to get caught up in defining the perfect client experience because it feels right and we want to do the best for our clients. It’s just as easy to over commit so I’d recommend you do the math on your client experience before telling people about it. Assess if you can deliver with your existing resources or adjust accordingly. You may need to hire more, reduce contact levels or streamline the process.

Action #4: Assess client profitability, by segment

Imagine if you could confidently deliver on your service plan knowing that you not only had the resources to deliver, but that it was structured to ensure that clients, across all segments, were profitable based on the service they received.

The goal is to ensure your client experience is both meaningful to clients and profitable for you.

The action is to calculate the real profitability of a typical client in each segment based on an assessment of the fixed, variable and time costs.

Hint: While it’s tempting to assess the cost of a client relationship by taking all expenses and dividing by the number of households, that simply doesn’t reflect the reality of those relationships. At a minimum get a true grip on the biggest driver of cost – your time.  Assess how much time you invest in a typical client in each segment and assign a cost.

Action #5: Communicate your value

Imagine if clients and prospects fully understood the value that you provide on an on-going basis and were clear on the level of service they could expect. Imagine, further if they could clearly articulate your value to others.

The goal is to reinforce the value you provide and manage expectations.

The action is to create a process to articulate and communicate the service plan that you have created.

Hint: When we’re in the first blush of a client relationship we often do a good job at communicating what a client can expect. At that point we often begin to assume that the client understands exactly what we do for them day in and day out. That’s a risk and it’s important to review and reinforce your value with clients, in very specific terms, at least once a year. Read more about the Honeymoon Effect here.

I know there’s a lot here. While we’re focusing on the fundamentals we often don’t think about these things until we begin to feel stretched, rather than at the beginning. We’ll chalk that up to human nature, but at some point we need to examine our foundation to ensure there are no cracks and that we have a strong base to grow. No great business was created on a shaky foundation.

To help you take action, we’ve partnered with Nucleus to offer our Engagement Essentials programme. The programme provides you with the insights, tools and resources to take meaningful action.

Download your fee guidebook here and take a look at Julie's Engagement Essentials programme now available on illuminate learn.

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Categories: Articles and Practice Development.

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