Your plan and goals have to be flexible. You need to monitor and review them on a regular basis, updating your plan as necessary. For example, if your goal was to increase sales by 100% by the end of year 3 and you achieve that by the end of year 2, the plan will need to be revised upwards.
You need to establish the Key Performance Indicators (KPI’s) for your business to track where you are on your plan. By measuring your sales, using the same goal as before, you will be able to consider what actions may be needed to ensure that you reach your target.
Paul Shrimpling of Remarkable Practice has an alternative meaning of KPI – Key Predictive Indicator. So what is a Key Predictive Indicator? Let’s say you are measuring sales. If you go back through the process that led to that sale you may find that:
- 60% of quotes are accepted leading to a sale.
- 35% of prospects receiving a sales presentations or being sent brochures ask for a quote.
- 20% of leads that you market to ask for a brochure or a presentation.
- 80% of leads come from referrals.
Hopefully, you will have a system in place to measure 1 to 3. All of these are predictive indicators. You could then consider what has to be done to increase each area by, say, 10%. If this could be achieved the result would be: 66% of 38.5% of 22% of leads producing a sale i.e. 5.59 sales from 100 leads as compared with 4.2 sales being currently achieved. How much income would that 1.39% increase in sales conversion produce?
In this example, the vital predictive indicator that may not be measured is the potential number of referrals. What system do you have for asking for referrals and how is it monitored? If you could measure each time a referral was asked for you could start to measure the number of referrals received for every request and then PREDICT the likely sales outcome.
This could have a powerful effect on the success of your business!