Do you want to take your business to the next level? What can you, as a business owner, do to increase your customer satisfaction and improve your company’s bottom line?
With business—as with anything in life—there’s always room for improvement. Once your business starts turning profit, the next step is to identify ways you can improve so you can keep growing and adding value to your customers.
Here are four strategic tips on how to improve your business’s bottom line.
Tip #1: Hire More Top Performers
In his book The 80/20 Principle, Richard Koch gives a few tips on how to improve your business. First, Koch suggests hiring more top performers like the top 20% you already have. To do so, he suggests looking beyond candidates’ credentials to assess their personalities and attitudes, which are often stronger indicators of their potential to perform at a high level. Koch recommends gathering your current top performers in a room and working out what they have in common before you start recruiting. Also, ask your top performers to help you identify and recruit qualified candidates.
(Shortform note: Koch doesn’t elaborate on the value of getting referrals through current top employees, but this approach can save you time and money. Studies show that employee referrals reduce the “time-to-fill” by 40%, and companies spend 40% less hiring referrals than they do recruiting candidates from job boards.)
Tip #2: Revisit Past Customers
Second, Koch says that another way to increase sales is to get back in touch with previous satisfied customers. If customers bought from you in the past, they’re inclined to buy from you again (assuming they had a positive experience). So, assign your salespeople the task of calling old phone numbers to quickly increase your bottom line.
(Shortform note: Research backs up Koch’s claim that past customers are a worthy investment. On average, 65% of a company’s business comes from previous customers, and 86% of customers with great purchase experiences will buy from the same company again.)
Tip #3: Hire a Project Manager
The more people involved in a project, the easier it is for complexity—and inefficiency—to spiral out of control. Therefore, Koch thirdly recommends hiring a skilled project manager who will keep all employees focused on the 20% of critical tasks that really matter. This will improve efficiency and productivity, generating higher profits.
(Shortform note: As Koch notes, project management can lead to greater profitability. Other benefits include improved morale, reduced costs, and better collaboration. A good project manager will create a communication plan that keeps team members connected and clear about their roles so they can easily coordinate their efforts in the most efficient way, thereby allowing the company to do more with fewer resources and in as little time as possible.)
#4: Innovate New High-Performing Products or Practices
Fourth, Koch emphasizes that innovation is vital for your company’s future competitive success. Although we often think of innovation as difficult and expensive, Koch notes that small improvements and simple ideas can result in significant gains for your company. For example, you could save a lot of staff time by having them deliver services over the phone rather than in person, or by giving customers the option of scheduling appointments online without any assistance.
(Shortform note: How much should companies invest in innovation? Koch doesn’t say, but a survey of 1,000 companies revealed that, on average, businesses devote 3-4% of total revenue to innovation, with wide variation across industries and regions.)
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