Will it SCALE?
We’ve prepped your sales team with Module 8 and 9 to boost their capacity. We are prepared to follow up with the clients for a great customer experience. We know how to measure success, now let’s take a product or service and scale it. But which one?
This module is short and sweet but it will culminate in a very specific product or service scaling very visually and affecting your bottom line positively.
We’re going to pick a product, Scale it, Measure it for success, and repeat the process on another product or service!
Using Metrics to Track your progress
Scaling is all about taking your product or service and pushing it to the limits of business. Aside from the basics, Scalability has many factors such as market evaluation and supply chain in some cases. Regardless, Lubbock Consulting has developed some simple tools to evaluate small business products and services for scalability and project those items into a highly scaled model.
The Scalability worksheet is all about ease of use and evaluation of 5 key products or services. In the example below I used a digital marketing firm that offers a few different services to their clients.
You’ll download and print the scalability exercise worksheet and fill it out with YOUR products or services.
Step 1 of 5: List Products and services that you offer
Pick the top 5 that you think you would like to scale - Don’t waste time doing ALL of your products and services right now, we just want to do a few of them. Let’s focus on NO MORE than 5 products or services for this exercise. Try to pick the top 5 that you think would be the best for scalability.
Step 2 of 5: Teachability
Please rank the products/services on a scale of 1 to 5 where "1" is given to products/services that are easy for you to teach employees to sell and deliver, and "5" is given to products/services that you must personally get involved with either selling and/or providing.
Step 3 of 5: RATE DEGREE OF PRODUCT/SERVICE DIFFERENTIATION
Please rate the products/services on a scale of 1 to 5 where "1" is given to products/services that your customers view as valuable coming from your company i.e. they like the product or service and see your company as uniquely qualified to provide it. "5" is given to products/services that are commodities where your customer has many alternatives for buying the product or service and can easily purchase from your competitors.
Step 4 of 5: RATE AT WHICH CUSTOMERS REPURCHASE
Please rate each of the products/services on a scale of 1 to 5 where "1" is given to products/services that your customers need regularly, and "5" is given to products/services that your customers only ever need once.
Step 5 of 5: Tabulate the Responses
Please calculate your responses using the results matrix next to the list of your products. Simply plug in the results and add them up.
The LOWEST score is the easiest product or service to scale.
In the example shown below, Social Media Posting (C) would be the easiest to scale. It’s extremely easy to teach, B2B clients build trust with their Social Media Marketing Agency and it becomes specialized in that way. Finally, social media marketing is used every day, meaning your client will be re-purchasing each and every month for years to come.
Using Metrics to Track your Progress
Take a look at the last year’s metrics. Not only what you brought in but what your COGS was for this SKU or Service. Start keeping track of both the cost and the revenue generated by this area.
Now let’s ramp this up. In the example we’ve decided to use the Social Media Posting. What are the steps to scale this?
First, let’s look at the three main criteria we used; teachability, differentiation, and repurchase rate.
Teachability starts with standardization of teaching techniques. As simple as a checklist of important items to go over with the person you want to sell or implement the service or as complicated as hiring or promoting a manager to hire a team and train them. You need to start building a trained team around this product or service.
Differentiation in this phase requires you to start marketing the difference. Why are you different than your competitors for this product or service? Advertise that and ensure you’re marketing that particular part of your business through Ads, and marketing collateral. Build a story and a sales technique around this to train your new team.
Your Repurchase rate should be expandable, people need this product and they need it regularly. You should incentivize repurchase in such a way that it’s almost impossible for your clients to turn down a long term agreement with you. Ensure you’re offering recurring purchase plans.
Your metrics in all three of these areas are
Time to train
ROI on employee (website is an employee)
ROI on marketing
Repurchase rate (increase, decrease?)
New clients on purchase plan
Remember your DMAIC system (look back if you don’t remember), but set a goal using these metrics, look back and adjust based upon the rate at which you achieved the goals.
Put 5 Products and/or services into the worksheet
Determine the most viable product or service for scaling
Come up with an implementation plan to scale your product or service
Speak with your Consultant about this plan to iron out any details
Implement your plan and start seeing the ROI