In our society, more is more has become the new mantra. Everyone wants a bigger database, higher conversion rates, and more customers. How are you servicing the customers you already have? Are you spending more and more time to get incremental gains? Are some of your customers worth the time investment you have in them? Dan Kennedy’s blog talks about analyzing your time and what kind of return you’re getting from the investment. I’ll be featuring parts 2 and 3 of this article in later blogs, so stay tuned. And now, here’s Dan:
By Dan S. Kennedy
Entrepreneurs, by nature, instinct, conditioning, competitive spirit are very into “more”. So are sales professionals. More gross revenues. More sales. More customers or clients. More web site traffic. More leads. Even more square footage, more employees. But more is not necessarily better, not necessarily more profitable or even proportionately profitable. The unbridled lust for growth of any kind at any cost gets a lot of business owners into a lot of trouble. For salespeople, it can lead to burn-out. For both, their best clientele being poorly served and neglected as quality thins to accommodate quantity.
Few business owners take the time and trouble to carefully and analytically study their present customers or clients, account by account, for contribution to net profit. Few entrepreneurs analyze their own activities and time useage the same way, in terms of contribution to net profit. When they do, they discover the classic 80/20, 20/80 Rule is alive and well, and further, that there’s a 95/5, 5/95 Rule too. In brief, 80% of profits tend to come from 20% of clients and time. Usually about 5% of clients and 5% of time use prove infinitely more valuable than the other 95%. The results of this rarely done analysis are often: getting rid of the least profitable clients, stopping or delegating or otherwise altering the least profitable time use. In many instances where I’ve come in as consultant to a business, coach to an entrepreneur, I’ve made less into more, by pruning away the clientele consuming 80% of the resources but contributing only 20% of the profits, creating fewer customers rather than more, and enhancing the relationships with the 20% who contribute 80% of the profits. Most business owners are being supported by a relatively small, often shockingly small number of “best” customers; all the rest, the bigger number are illusion. Most entrepreneurs are also producing 95% of their income and wealth from only 5% of their time. Even a slight re-adjustment in time investment can multiply income.
In my NO B.S. TIME MANAGEMENT BOOK FOR ENTREPRENEURS, we begin in Chapter 1 with some math exercises, to accurately determine what your time is worth, what it must be worth to achieve your goals. Together, we shift your thinking about time to investing, to allocating, managing and measuring results in terms of investment and return on investment. The business operation changes and behavioral changes this provokes are frequently radical, dramatic, exciting and extremely beneficial. I promise, you’ll do some very serious thinking about the ways you invest your time if you read that Chapter.
About The Author: Dan Kennedy is the author of nine business books, including his newest, NO B.S. TIME MANAGEMENT FOR ENTREPRENEURS, available in bookstores or from online booksellers. Additional information and free chapter previews at www.nobsbooks.com. Included with the book, a coupon for a free kit of peak personal productivity tools. Kennedy is also a busy entrepreneur, consultant, speaker and direct-response advertising copywriter. Info at www.dankennedy.com.