Daily Task: 15 minutes
Mine your leads. Instructions here.
Project Focus: ROI
This week, we’re going to improve the ROI on your expenses.
Today, we’re going to reallocate one resource from an area of low return to an area of high return. This is called “Thinking like an investor”. Viewing everything in your business as an investment – your rent, your staff, your inventory, your overhead – will help you get a better return on all of it.
Examples:
Reassign Staff from Low-Traffic Hours to Peak Hours:
Action: Analyze customer traffic data to identify peak hours. Reassign staff from slower periods to busier times to ensure optimal customer service and increased sales during peak hours.
If you own a gym, this means cutting your lowest-attended class. If you own a retail shop, this might mean opening later and staying open later. If you own a salon, this might mean closing Mondays and staying open Sundays.
Be available when your clients are available, not when it’s most convenient for you and your staff.
Shift Marketing Budget from Print Ads to Digital Advertising:
Action: Evaluate the ROI of current print advertising efforts. Reduce or eliminate print ads with low returns, and reallocate the budget to high-converting digital channels like Facebook or Google Ads, where ROI can be more easily tracked and optimized.
Move Underperforming Salespeople to Customer Retention Roles:
Action: Identify sales staff who struggle with new client acquisition but excel at relationship management. Transition them to roles focused on customer retention, where they can build long-term client relationships, thereby increasing customer lifetime value. We call these roles a “CSM” or “client success manager”. Client retention is really just client sales over time, but many feel less pressure to perform when keeping a client over gaining one.
Reallocate Space from Low-Demand Products to High-Demand Products:
Action: Assess product sales data to identify items that are underperforming. Reduce shelf space or storage allocated to these items, and use the freed-up space to stock more of high-demand, high-margin products.
If you can, use inventory on consignment or use pre-orders instead of maintaining a huge stock.
Redirect Training Resources from General Skills to Specialized Skills:
Action:
If you own a gym, this might mean training your coaches to sell better. If you run a professional practice, this might mean training your professional staff to do social media for you. Just because it isn’t their primary job doesn’t mean they don’t need to be good at it. Train people to be better on the things that drive revenue.
Reinvest Profits from Low-Yield Investments into High-Growth Opportunities:
Action: Review the performance of any financial investments or assets held by the business. Sell off low-yield investments and reinvest the proceeds into high-growth areas, such as new product development or expanding into new markets. Your business is probably outperforming the market; where would more money help you grow? Pull money back from things that aren’t helping you grow and put them in places where you could grow faster with more investment.
Transfer Marketing Efforts from General to Targeted Campaigns:
Action: Spend twice as much on retargeting as you spend on awareness.
Reallocate Office Space from Low-Use Areas to Revenue-Generating Activities:
Action: Assess how office space is being used. Convert underutilized areas (like a large break room) into revenue-generating spaces, such as a small retail area, additional client meeting rooms, or a pop-up event space. Staff doesn’t need a large place to rest. You don’t need a big office. You don’t need empty space in your gym. Remember that every square foot of space should generate 3x its cost in revenue.
Shift Focus from Low-Margin Services to High-Margin Services:
Action: Identify services that yield lower profit margins. Make a plan to phase them out and reallocate resources, including staff and marketing, to promote and expand higher-margin services that contribute more significantly to profitability. Stop selling sawdust and start selling art.
Reassign Customer Service from Non-Critical Channels to High-Touch Channels:
Action: Evaluate customer service interactions. If certain channels (e.g., email support) have low engagement, reduce focus on them and reassign resources to high-touch channels (e.g., phone or in-person support) that offer better customer satisfaction and retention rates.
