In business, we often talk about leverage. Isaac Newton had famously quoted “If I have seen further it is by standing on the shoulders of Giants.”
Leverage as a concept is being talked about all the time, but it can both benefit or harm you depending on the leverage you are talking about.
Firstly, what is upside leverage? Upside leverage is how you get an opportunity to produce a more profitable yield for your business, than it otherwise would.
These are the specific drivers of revenue/sales growth, profit explosion, and market dominance that can be universally applicable to ANY business.
Marketing is perhaps the biggest leverage you can have to improve your business. It costs the same fixed effort, expense, time and opportunity to run an ad or send a sales letter, regardless of their conversion rate. So, why not maximise its potential?
The same piece of ad can bring 20%, 50%, 1000% ROI. The same marketing dollar spent on the ad can bring an equivalent 20%, 50%, 1000% ROI. That’s a lot of difference.
You should focus on improving each marketing efforts conversion rate and frequency of purchase. increasing your sales and marketing leverage would lead to exponential growth. This could increase your net worth, wealth and profits very signi
How do you accomplish this?
Create an internal marketing audit and inventory. Identify all marketing activities, processes, and elements and find ways to optimize them. Here are 3 ways to find them:
- Model, codify and replicate the highest performing people doing the selling or marketing processes within your organization and get everyone to add these best elements to their previous method.
- Learn from other companies in the same field and adopt their better ways of marketing, selling, lead generation, conversion, re-selling and up-selling
- Learn from the best practices in related industries that have achieved massive success. Are they using a powerful salesforce? Are they using telemarketing?Whatever they are doing, you can mimic toomimictoo.
Borrow, adapt, adopt, and apply these processes to your business. Adding these elements to your current processes and replace underperforming ones is vital to increasing your sales, your performance, the number of clients you attract and the referrals they generate.
This should be a continuous, regular exercise. Marketing is the most important upside leverage business “driver” of the 9.
#2: Your Marketing Strategy
Your marketing strategy is probably the biggest overlooked fact of business life. Changing your strategy is the easiest and fastest way to transform your business!
Most companies fixate on generating revenue to meet their overhead needs, make payroll and sustain the business.
They fail to maximize the revenue they make, the positioning they achieve, the growth they sustain and the value of the asset they create and grow.
But this can be achieved by changing strategy. Strategy is the master purpose of your business – the explanation of the entire operating approach your business is following, why and how every element integrates and advances the big picture goal.
How do you change strategies?
- First, understand that you have a strategy, even if it’s a reactive one. Now, it’s time to adopt a proactive long-term strategy
- Pinpoint what you are trying to achieve, build and sustain with your business
- Figure out the best operating approach, in terms of sustainability and endurance, that will efficiently and quickly get you the optimum outcome you desire. On this basis, think of your tactics
What actions, activities, concepts and approaches should you adopt to achieve your “big picture” strategy best? These are the tactics. The strategy could be: I’m going to upsell, resell and cross sell my products and services to profit.
List the most successful and formidable companies in the world.
- Think about their big business strategy. What are they trying to do with all the tactics they adopt.
- Think about how they are accomplishing it. This will break down the difference between strategy and tactics.
- Distil a combination of strategies then pick out the viable ones you can use to replace your current business strategy
- Keep in mind your ultimate strategic goal, the multiple contributing factors and work backwards. Visualize how it is supposed to look like when you are doing, sustaining and continuously delivering it.
When we talk about capital, most of us will think of it as financial capital, aka money or cashflow or investments.
However, in the real world, capital can come in different forms. Optimizing human, intellectual, and financial capital is the next key driver for your business. For many businesses, human capital is what keeps the business machine doing.
Training: Every dollar invested in staff training would produce 20-200 times return annually in yield, based on research. Check how well your capital expenditures are performing, then examine better ways to operate. Cut unnecessary expenses, become more productive in underperforming areas of the business, analyze and question all expenditures – ROI, ROE, ROP and ROA.
#4: Your Business Model
The whole integrated means you are using to achieve your strategy, which differs from tactics. In the Halycon days, the main strategy was to focus on building a lot of back end sales fuelled by repurchasing and advertising.
Tactics would adopt a free-mium model, in hopes of building a relationship with prospective clients. Figure out what the lifetime value of your buying relationship with your client is. Then add dimensions to your business model, at the front end and the back end and sides – through cross-selling and up-selling.
How can your new business model be expanded?
1.) How can you make it safer on the acquisition side?
2.) How can you improve the residual income or institutionalizing the relationship that we have with the client side?
Leverage on all the professional, collegial and mastermind relationships you have. Pick at their minds. Find out their optimum performing marketing systems/strategies, cash flow management techniques, methods of using capital and people, and their operating approaches.
Approach people who have solved the problems you are facing. Poach talents by calling your competitors top salespersons and recruiting them over the phone.
Your professional, collegiate, and personal relationships can introduce you to other successful friends and colleagues. Successful processes can be drawn from any industry. Share with them your goals and challenges.
Find out their highest performing activities, the secrets to their success, especially in areas you are weak in. Record them down and add them into your own operation. Keep in contact with your satisfied customers through email marketing.
Every relationship can offer insightful recommendations, referrals, knowledge, or access to their network base, which can lead to incredible upside leverage potential.
#6: Distribution Channels
There is a huge leverage opportunity in fully optimizing your unrecognized distribution channels. Use your distribution channel as an asset. With your strong business relationships with buyers and retailers, you can do deals to cross sell other related products and just collect royalty.
Distribution channels can be in the form of catalogs, mailing lists, supplier lists or seminar groups/trade shows you exhibit at. Figure out your best leverage and maximize it!
#7: Products and/or Services
Create new markets and new products? Combine and variate your offerings and adapt it to different industries or target demographic groups? Consider packaging it with other people’s offerings or making a premium/basic version to create a niche product line or enter a new market.
You could even license it to others. Analyze your buyer base for opportunities. Identify your innate allure to certain a demographic or any extreme deviations that could be the new market niches you could enter.
#8: Processes and Systems
Breakdown your business into its driving processes and sub processes. Measure and track your driving processes and improve them. Each process within an activity – be it revenue generating, production, operational, financial, and personnel – can be improved.
Scrutinize your processes by analyzing, monitoring and measuring them. Then, identify how other people are performing the same function more efficiently. Pinpoint the strategy, tactics and mindset to adopt in order to maximize their successful model. Implement this in your own business.
Codify processes you have a unique comparative advantage in, then license them, sell them or joint venture their use for a stake of the benefited user’s profits. What do you do that’s more effective than 90% of the other people doing it? What could you teach others and get paid for? Reflect and measure the performance of your processes that you could leverage.