I wonder if you share the dream of most business owners and leaders of breaking through profit plateau?
I know the dream for your business is to break through profit plateau. You want to have a nice healthy graph plotting steady organic growth; a consistent but manageable increase in revenue, with controlled overheads and sustained profit margins; a business that is developing new customers steadily and regularly maintaining growth targets.
If you do dream of this, I may be about to burst your bubble.
In over 25 years in business, I have rarely seen a company that has achieved breaking through profit plateau. Without a complex merger or acquisition. Businesses who rely on achieving growth by increasing output always, at some time, hit the profit plateau. They grow effectively for a number of years; they achieve this as they have a solid offering, they are delivering some proactive engagement with their market, they work hard, and they achieve sales.
Inevitably at some point the growth slows down. The practices and processes internally within the business reach their saturation point. They cannot break through the profit plateau without doing things differently and all the small changes they make stop yielding results.
At this point the organic growth that the business is capable of has stopped delivering what the business needs. It’s time to think about something new and if you are not inspired by growth through merger or acquisition you need a new idea to generate dynamic growth.
Dynamic growth is about constant change.
It’s about stimulating different results by taking new action, and it’s what needs to happen when you reach a profit plateau.
Choosing to be dynamic about your approach to business may be the thing that propels your business to really transformational level of growth, but where do you start?
Over the last 10 years I have been working on defining the characteristics of highly successful businesses to understand how really great business harness growth.
When you are thinking about what you need to focus on to break through the profit plateau there are three key pillars to focus on. These three areas will allow you to make the changes to your organisation that will ensure you burst through the plateaux.
Pillar One: Your Customer Journey Pillar
The experience that your customer has when they work with your business is everything.
You have a responsibility to shape a journey that not only educates your customer on the value of your offering, but also ensures that they experience your business as credible and professional.
Really robust businesses, that exceed their own growth expectations, have very diverse and well-planned customer journeys; they consider carefully the stages through which their customers travel and the impact that that has on their decision making journey. As well as a highly tuned customer experience they have internal processes that create productivity and efficiency.
When understanding the challenges of breaking through profit plateau to business growth, the first place to look is in the detail of the customer sales process.
A well planned and diverse customer journey that is implemented effectively internally will absolutely maximise the conversion rate and revenue generation.
Dynamic businesses will be thinking today about specifically what experience their customer has when dealing with their business and will be asking questions about how to enhance the quality and content of that journey.
Really high quality sales process methodology will allow your business to draw in more customers and make more revenue and ultimately generate more profit.
Action:
Take time to interrogate the experience that your customer has when working with you. What stages do they move through, is the way that you interact with your clients diverse and well defined? Do they have a consistently high quality experience? If your customer journey is not smooth and effective you won’t break through that profit plateau.
Pillar Two: Your Customer Communication Pillar.
In simple terms, one of the most powerful tools your business has is the communication that it uses to reach out to its customers. What we say and how we say it has a huge impact on breaking through profit plateau.
The customer communications pillar within your business deals with every communication that your customer is exposed to and looks at how it impacts their decision-making. As the range of channels increases and we have ever more marketing and sales communications to explore, a smart business will look closely at its communications pillar.
Whether it be the business cards you handout at face-to-face meetings, the software you use to generate proposal, or the quality of the telephone calls that your sales team are making to your customers, a really strong communication pillar embraces multiple channels an creates high quality guidelines around how these channels should be used.
It is not simply a case of using email it is a case of crafting an email that has a powerful impact within the sales communications pillar. Never take your eye off the content, structure, tone and delivery of every sales and marketing activity that comes out of your business. The message here is that if your communications to your customers are not of the highest possible standards, you will not be achieving the highest possible results.
Action:
Make sure that you evaluate your customer communications. Go back to basics. Look at all your communications and check them for impact and quality. Create clear communications guidelines and ensure your entire team is across them and implementing them.
Pillar Three: Your People Management Pillar
The management area of your business refers to the processes and practises that your organisation uses to ensure that your customer journey is implemented to the highest possible standard.
Management is not simply about the leadership that your team receives. It is about the practises that your business embraces to drive the right outcomes.
Within the area of management, you need to look at the structure of your organisation to ensure you have the right number of resources and that each person is working in the right fit in the right role.
In a really powerful business, every resource in the organisation is lined up behind the customer journey in order that it can be delivered to the highest possible standards.
Once you’re clear that the people in your team are right, you then need to be thinking about how those people communicate with one another internally.
Think about how you train and develop those resources to ensure they have the highest possible skill set; understand how performance is managed in an organisation to ensure that everyone is driving towards the right goals and achieving the right targets.
All of these areas of your organisation come together to form the management culture that is shaping your business.
If you are focused on ensuring that your people are in an environment where they can perform to their maximum you will achieve better results.
So, really dynamic businesses are asking; is my workforce well trained, well recruited and well developed? If the answer to any of those questions is no, it’ll have a negative impact on the amount of money you’re generating.
Action:
Look at every member of your team. Are they where they can best perform and let their skills shine? Do they need additional training? Are they the right fit? Are you helping them be the best they can be? Are they all aligned with the vision for the business?
Any business that wants to grow and break through their profit plateau, needs to be dynamic. And being dynamic means taking control of the destiny of your business.
As a business owner or leader having the tools to drive constant growth in your organisation is one of the most powerful skills you can develop.
If you want to break through profit plateau look at the areas above and really interrogate how dynamic you are being.
Author
Karen Dunne-Squire