The best part of the year is that brief moment when I can look back at what we have accomplished, and plan for the future. Numbers don’t lie, but if you don’t listen closely they can definitely bamboozle you. This is why I look at the numbers through a REAL-W filter.
The REAL-W filter allows me to look at all the streams of our revenue, because all streams are not created equal. When I am speaking of revenue streams I am not speaking of drop-off (dump and run) or full-service or rentals or event planning. These are all different revenue streams, but I am speaking more to the sustainability of any one stream. When we consider the 80/20 rule (80% of your revenue comes from the top 20% of your customer base), and apply that to a stream we can see.
Bearing this in mind, I look at my entire account base and consider where the greatest opportunities are for improvement. Those areas are what is REAL-W: Retention, Engagement, Acquisition, Loyalty, and Winback.
Retention is how we look at our existing client base. We can spend $1K or more to acquire an account, but what is the value of the account we add to our book of business? If we spent $1K to acquire the account, are we maximizing the potential of that account? I mentioned earlier that the top 20% of our accounts generate 80% of our annual revenue. But how many of that top 20% are actually ordering? Dig deep, I found that there was easily room to improve our revenue by X% just by getting five additional accounts in our top 20 to order. Do you have money stashed in the cushions you could add to your top line?
Engagement has less of a direct impact on the bottom line. But it does lead to both retention and acquisition. The marketing game has changed. We all need our brands to be top of our customers’ minds to ensure we are their first thought. But this requires that we have a solid content marketing plan. For efficacy we need a defined brand voice, and our content bus be consistent and varied. Did I mention that depending on our customer avatar, we need to be operating on the platform that makes the most sense? The “Gram” is great, but because of the amount of noise on that platform–and what would be required to cut through that–we don’t want to miss our opportunities on TikTok, Pinterest, and/or LinkedIn.
Acquisition is the area where we can never let up. With an attrition rate of 8%, we need to always grow by a minimum of 15% to ensure our operation is growing. So we need to dedicate time and effort to always bringinig on new clients. Do you have a wish list? How many clients are on it? What is your deal velocity (how long does it take to take an opportunity from suspect to client)? If you fail to plan to acquire business, you plan to fail.
Loyalty is the area where our marketing (content and brand) focuses on keeping the company story in our clients minds. Clients buy because they like the solution we provide for them, but they stay because they connect with our story. Your company story provides the stickiness that keeps your clients emotionally connected to your brand. Focusing on this gives us the strength of relationship to keep us out of the commodity zone. When we are a commodity and our only value is a low price, our clients can go somewhere else for a lower price: if you sell on price you will lose on price. But if we can connect our clients to our company story and mission, they are more likely to provide us return business and or refer us business.
Lastly we have the Winback opportunities. The number one reason why we lose a customer is lack of contact. Situations happen. But if we stand up and are immediately accountable we exponentially increase our retention rates. When we fail to do this and the account sits dormant for an extended period of time, we can still revisit that account–in some cases–and work to win them back. It requires courage and patience. But at the end of the day the account that you can win back after an unresolved issue will be two to three times more loyal than the account that never had an issue. It is like a relationship. You grow through working through your issues together. That strengthens the bond. It is no different with your book of business.
At the end of the year or quarter when you have a moment, take a deep dive in your numbers to understand where your bread is buttered. You will be shocked to find (when you look through the REAL-W lens) how much money was left on the table. Once you take a look and you identify the opportunities, make a plan and work that plan. And see if by increasing the number of your accounts by 30%, your average deal size by 30% and your deal frequency by 30% if you too can’t double your revenue.
If it makes sense…it will make money.
