The capacity to focus on what matters is fundamental to securing business growth. It is worth pointing out that understanding where not to focus your attention can be just as critical as recognizing the importance of concentrating your focus on areas with the highest return. The following article highlights five of the areas which are key drivers of business success.
1. The core value proposition (CVP)
All companies have their own USPs – or unique selling propositions. These are aspects of their offering which are truly valued by customers and which help to differentiate an organization from its competitors. It is all too easy for an ambitious company to become distracted from its core competences, the result being that it loses focus and dilutes its offer and/or position. It is recommended, therefore, that resources are channeled into a company’s existing, rather than its potential, strengths.
2. Customer centricity
Independent research has determined that the greater the importance placed on a company’s customers, the greater the growth potential of that company. In some instances, a mere rise of 5% in customer retention rates has resulted in an increase of profits of up to 80%. What’s more, it can be up to 20 times more expensive to win new customers than to retain existing accounts. It makes sense, therefore, to work on improving satisfaction and loyalty levels among existing customers as they can be considered lower hanging fruit with a higher return on investment (ROI).
The whole purpose of segmentation is to enable a company to focus on the groups of customers and/or prospects that deliver the highest return. It is commonly acknowledged that the top 20% of customers in any given business may generate as much as 80% of the company’s profits, half of which are lost serving the bottom 30% of unprofitable customers. Logic therefore dictates that companies should be prepared to let certain customers defect in order that they may concentrate on those which are more important to them.
Savvy marketers should closely target their offerings to the customer segments that most value them. These market segments are almost always the most profitable to a business, and are likely to be where a company enjoys the greatest competitive advantage.
4. People assets
One of the highest costs to any business is its labor. However, its employees are also one of its biggest assets. Research among Sears’ employees revealed that a 5-point improvement on its employee attitude scale led to a 1.3% improvement in customer satisfaction; this, in turn, boosted revenues by $250 million a year. It follows that more satisfied employees leads to more satisfied customers, who are then inclined to spend more.
Many companies are guilty of viewing staff as a means to an end, rather than recognizing them as the valuable asset that they are. Focusing attention on the likes of employee engagement and development of talent will help to maximize the ROI in labor.
5. Continual improvement
Complacency can be fatal. Businesses that believe they know everything about their customers and markets are setting themselves up for a fall. Every market evolves and every product has a life cycle. As demand increases, often so does choice, making it all the more vital to improve a product/service in order to increase its appeal, as well as continuously drive higher awareness through to loyalty levels.
Any improvements need not necessarily be confined to the product itself. A focus, for example, on improving the customer experience is likely to result in financial gain, with eight out of ten customers stating they would be willing to pay up to 25% more for a superior customer service.
Whatever the chosen point of focus, key to success is prioritizing resources for maximum return and never deviating from the ultimate goal.