Three Approaches to Expand Margins in 2019
Will you lead your company to profitable growth this year? Here are three approaches to consider in 2019:
1. Frontload the value your customer’s experience. Conventional wisdom is that customers receive the benefits and value of your work after they sign on the dotted line. Give it to them early by providing significant value during the sales experience, offering insights and expertise instead of just selling a commodity. To escape from price-only focused sales, get your teams to execute your strategy, and you will create valued partnerships that endure.
2. Cut hard BUT carefully. Most leaders understand the necessity of optimizing the cost structure and attacking costs that don’t bring value to your customers. Thoughtful cost reduction is the key to follow the old adage to “measure twice and cut once.” If you cut too much, there is a high risk your company will be starved for the resources that create value and help you earn a premium with customers. The only source of operating income is revenue, so don’t do this blithely.
3. Go all-in on one investment to help you compete and win. Focus your resources to build a capability you need or fix a significant problem that’s preventing you from earning more business. Put all of your strategic time (time that you aren’t managing the daily operational priorities of your business) into this effort to the exclusion of all others. You’ll massively increase your odds of successfully executing, and it’s far better to advance your top priority by miles than to advance a lot of small projects by inches.
Each of these approaches is useful on their own. But employing all three creates a multiplying effect that results in 1+1+1 equaling much more than 3. I’ve seen successful companies effectively apply these three strategies in tandem to grow their business, provide greater value to customers and earn a premium in the process.
My latest article in Harvard Business Review addresses how to get the strongest ROI from your investments in CRM technology. If you are looking to implement a CRM this year or improve the return you are getting, you may find this valuable.
A Slice of Life Balance
You probably received holiday cards from friends you haven’t spoken to within some time. Maybe even years. Before you throw them all away, choose one and give that friend a call. You needn’t have a long catch up, but a short call to let them know that you’ve missed them, that they are important to you, or that their card brought back good memories will make you both feel good. Even if you’ve thrown all the cards away, just choose one friend you would like to reconnect within the New Year. Enjoying strong friendships is energizing and good friends provide a healthy escape when work gets overwhelming.