Are you getting the best results from your business?

 

Part of creating a successful business is to focus attention and effort on the areas that are going to bring the most reward.

There is a fundamental economic principal sometimes referred to as the law of diminishing returns where the first additional resources applied to a production process give far greater output results than those applied later.

One way to imagine this is to think of a seized wheel where the first few drops of oil enable the wheel to move. Adding more oil will improve the lubrication and the process, but those first few drops make a massive difference.

In business, it’s really easy to keep adding more oil to the process that is running. You’ve done it before and you know that it had a good or even a great effect. You don’t have to think too hard about it!

Fixing the thing that isn’t working, or starting a new project or process may well require you to put in greater initial effort but the return may well be much larger.

Applying this thinking to a sales & marketing context, perhaps you are well established in a market, with a particular type of customer. You understand their needs, you have a presentation and a product or service that has been successful in the past and you know how to win more business. There will come a point where doing more of the same will not have the same effect, and it will take more sales & marketing effort and expense to win new customers.

The alternative strategy might be to identify a new market, where you are not established and you don’t have the same level of knowledge. The initial resource required – especially from leadership – will be greater – but the returns may be even greater still. If you now have two markets where you are established, instead of one, you have a more robust and less risky business.

You can apply this thinking to many different aspects of the business. You don’t have to keep doing more of the same if the results don’t warrant it. Are you getting the best results for your efforts?

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