In this month’s Insight, Paul McKibbin of SPS North West looks at how increasing the effectiveness of each process in your business can be a real driver for growth. Getting value from increasing your transaction base can only come about if the processes involved in delivering those sales happen efficiently. Without improving the way your business operates, it will be very difficult to successfully implement the strategies we’ve discussed.

A business is nothing more than a group of processes and it’s the actual quality of these processes that determines the level of success. So, increasing the number of customers will depend on the effectiveness of your marketing processes; increasing customer retention depends on how well you handle customer service processes; increasing the average value of sales depends on the effectiveness of your selling process. Making all processes cost efficient will increase profit and build the value in your business.

 

1. Take the time to understand your internal processes
How do the key processes work? Are they operating efficiently? Is there a cost of non-performance? For instance, a business may not be getting enough new customers. The immediate reaction, in the absence of knowing exactly why, might be to increase marketing spend and widen it out to all sorts of channels to attract more leads. In fact, it may turn out that the business is getting plenty of leads but is failing to convert many of them. That's a sales process that needs improving, and the solution might be in getting sales reps to perform more effectively or getting back to telephone enquiries faster rather than throwing more money at marketing.

2. Your business is a series of processes.
Each one needs to be analysed at some stage to see how efficiently it is working. If the right drivers (e.g.  conversions per sales rep., average call response times) are being measured so that performance can be tracked then the real reasons for poor performance will be identified.

3. Establish the correct drivers for your business
Deciding what drivers to track can sometimes be a bit involved and it’s good to work out which ones are relevant to your particular business in conjunction with a business advisor. There may be industry benchmarks you can use or, alternatively, determine which of your own operations adds the value to your business.

 4. Undergo a business ‘health check’
A business health check can look at both what is happening in the business world around you and at your in-house operations. You may be tempted to look just at in-house operations, but consider how changes in technology, for example, could affect your production methods, or upcoming legislation in, say, managing pollution, which might alter the way you need to handle waste. Those things may not necessarily be negative – sometimes a review of the wider world opens your eyes to new opportunities as well.