Are you frustrated with lack of movement in your business?

Feel stagnant?

Wondering how you can accelerate your growth?

Ready to make more impact with the solutions you provide?

Great! Take a moment to find the GAP so you can identify exactly where you need to place some attention.

Growth Markers

Abilities

Positioning

Start with the Growth Markers

I know, I know…here we are again talking about the numbers. However, the numbers we are going to look at today are not just profit and loss, or expenses and income. These numbers point to future growth – not just the health of the business today.

AOV:  Average Order Value

Take a close look at the past 2 years of sales. What is the AOV? 

While doing this research also note how many repeat transactions most clients make and how many months/years on average they stay with your company. We will use these numbers to calculate the Lifetime Value of a client.

LTV: Lifetime Value

Again, taking a look at the past 2 years…what is the average LTV of your clients? Use this calculation:

AOV   x   # of transactions   x   Retention Time Period

When you look at these numbers you may already see a GAP. If the nature of your business is one-and-done then the AOV may need to be increased possibly by raising your prices, bringing in more clients (or increasing referrals from those clients), and/or adding valuable additional features/products/services your clients also need.

If you are not a one-and-done business then the LTV is a key marker to look at. Are you doing all you can to maintain your clients so they have repeat transactions for your products and services? Possibly a membership or retention model would make sense for your business. 

CAC: Client Acquisition Cost

Do you know what it costs you to acquire a new client? How much do you spend on advertising, fees for events, time prospecting, and writing and distributing value (‘free’ social media posts and blogs/articles still have a cost: your time being one of them)?  Don’t forget about the salaries you pay others to help in marketing efforts (production, creative services, etc.) and the hard costs of any SaaS or other technology you use.

CAC is important to know so you can determine your marketing strategies’ overall effectiveness and efficiency. You want to reduce CAC in order to see more return on your efforts. This is a great way to pinpoint which efforts are producing and which are not and should be eliminated. 

CAC is a difficult number to identify. Here is the standard calculation used:

Cost of the sale and marketing costs 

divided by the number of new clients gained during a specific period

Next, look at the ratio of LTV:CAC – it should be 3:1. In other words, you should get 3 times the amount from a client then you spent on acquiring them. Anything less that that you need to determine how to acquire new clients for less spend, anything more than that gives you the ability to invest more in advertising and marketing to increase new clients and thereby see growth.

Profit Margin Decrease

No, that is not a typo! In some cases you may consider decreasing your profit margin in order to increase your Net Profits. Sounds wrong – right?!? Let me explain:

If you look at your Profit Margin (AOV – real costs = Profit Margin) you may find that you have a profit margin of 50% or 80% or 20% or anywhere in between. Take a close look at that number (and what it is in real dollars not just percentage). Are you able to function with that number? Is it too much? Too little?

No one can determine what is right for you – but you need to decide what % you are OK with. If you are OK with a 25% Profit Margin and your current Margin is 45% then you can re-allocate the other 20% to efforts that will bring in more clients (thereby raising your overall Net Profit).

Retention Rate and Conversion Rate

Real quick without a lot of details…you should also know these two Rates. Retention is how many clients do you have this month that also purchased from you last month. Conversion is during the sales cycle. If you look at how many prospects you met with compared to how many became clients you determine how effective you are at converting prospects to sales.

Abilities

What got you here will keep you here.

You have forged the trail, made it this far – possibly all on your own. Congratulations! Well done! 

Now…how are you going to move forward? What do you not have in your wheelhouse or toolbox to get you to the next level? There is something or you would already be moving there.

Is it a new skill you need to acquire? A new understanding or efficiency in a technology?

Is it that you need people on your team you can delegate things to so you can remain in your zone of genius?

Is it your ego that needs to be tamed and pushed out of the way of progress?

I get it, status quo is familiar. Staying the same, right where you are, is comfortable. But the truth is, if you are not gaining ground you are losing ground at the rate of 2 times faster. Why? Because (1) you are not moving, and (2) your competitors are growing, (3) the industry is changing/improving/innovating along with the world. So relative to them you are losing ground twice as fast as they are going.

Here are some of the damaging things we see in business owners:

Creative Avoidance – filling your day with trivial tasks, doing the same thing day-in-and-day-out, always ending the day with a feeling of things never get done (but you sure were ‘busy’).

Procrastinating on the ‘hard’ stuff – doing the things you are comfortable with (usually in the form of delivering your product/service) and leaving the important things incomplete (like sales and other income producing activities.

Refusing to increase bandwidth – yep, you guessed it! Not using your time wisely, or outsourcing certain things to others, so you can have the space to focus on growth activities.

Fear of change. At the base level fear of change is self-centered. You are focused on yourself instead of others and what you can provide to them.  If you truly believe what you do can help others, then you can face the fear you may have for what it will take to provide that to more and more people.

Identify what you need – then seek out acquiring these new abilities.

Positioning

It is possible that the reason growth eludes you is that you are not positioned in the marketplace effectively. It s not enough to be different – you need to be distinct. 

Distinct means to be recognizably different in nature from things that are the same or similar.

This is a step above being different. It provides an instant ability for others to see your uniqueness, the distinct qualities that make you different.

Once you determine how you are distinct, then you need to place yourself in the right areas to showcase that message. If you try to position yourself in segments of the marketplace that are not relevant to your business you will dilute your time and resources, resulting in not positioning yourself in the best way possible to the best possible audience.

It is not about being in more places, with more topics, and more offerings. In doing that you can water-down your authority and credibility. You end up seeming less important, less distinct, and not being seen where you need to be seen.

Determine the segments you want to appeal to, and for each, design your messaging to be on target and showcasing your distinct qualities. 

GAP

Finding the GAP that is preventing or stalling your growth is uncomfortable, challenging, and takes time. But – it is vital if you want to see growth, or even scale, in your business.

Know the Growth Meters and get them in alignment

Identify the new Abilities you need to focus on & obtain

Position yourself as distinct in the right places with the right message

Need help? Get in touch with us – we are happy to see if we can help find your GAP!