If you look at the fastest-growing companies, you'll be impressed not just by the sheer amount of money they've made, but also by their ability to capitalize on what they already have. These businesses become multipliers -- scaling one idea fuels the need to scale others.
But entrepreneurs with growing businesses can feel deflated if they only focus on the most braggable metric: revenue. Cash flow allows you to invest in other innovations. But focusing exclusively on revenue means you're more likely to overlook opportunities to foster growth. Not every year can be gangbusters in terms of money, but nearly every year can be high-growth, one way or another.
Bonus: Growth in other areas is likely to pay off when it comes to your bottom line. Here are some areas to focus on in 2020.
As someone who helps businesses determine how to grow more efficiently, I'm a big proponent of referrals. Referrals from clients are some of the easiest sales you can make -- these people are primed to see you in a good light. Referrals from partners and vendors can also be great: They, after all, want your company to succeed so theirs will too.
How do you drive up your referral numbers? One way is by launching a campaign focused on referrals themselves. Put together collateral that your team can use to motivate people to refer others who could benefit from your products or services -- even if they don't themselves. Provide an easy referral link in team members' signatures. Offer incentives to existing clients, extra services that are valuable to those making referrals to you.
Remember that referrals are big motivators because they signal that your team is already doing something right. Referrals also make it easier for your sales team to locate qualified leads and close sales, giving salespeople more time for nurturing less primed candidates. Those two benefits alone can fuel more growth.
Efficiency doesn't sound sexy at all, but it's absolutely necessary to make whatever money you do have go further. If your team isn't following high-efficiency procedures or utilizing tools or technology to boost their productivity, you're giving competitors an edge. That can quickly negate any growth you've experienced and create long-term problems.
One company I visited had outgrown its legacy systems but hadn't acknowledged it. The owner was insistent that spending the money to upgrade would undo any cost savings they'd see from increased productivity. I encouraged him to research the tools that would automate some of their work and then take advantage of a free one-month trial to do his own assessment.
The result: In one month, his team eliminated enough work to take on three more accounts it wouldn't have been able to otherwise. Once he calculated how much money three more accounts would bring in, it wasn't just a wash -- his team would see real profit. Track your team's performance in different areas to see where you can invest in efficiencies that will have long-term repercussions. Making your teammates' jobs easier is a huge motivator, and constant improvement shows prospects and clients that you take your work seriously.
3. Churn Rates
Unlike the other metrics, you'll want to see this one go down. But this is great to track in terms of growth: The fewer clients you lose, the less revenue you'll lose. It's also a self-fulfilling prophecy -- if you keep clients on, you're more likely to attract those sought-after referrals.
Reducing churn isn't easy, but it's worth the work. If you haven't already invested in client surveys, do so now. As the year comes to a close, ask what they've loved from your team and what they'd like to see improved. Position these as if you're investing in your relationship -- it will help both sides take ownership for creating a sustainable future. Take a look too at the metrics you already have. Do clients tend to leave at a certain time of year? Do you notice a drop-off at specific points, like after a big win or after not interacting with a real person for a certain period of time?
Brainstorm how you can adjust those risk factors to reduce churn. Can you schedule check-ins with clients every three months? Do special offers during certain times of the year -- say, the holidays -- make sense? Could you start celebrating client anniversaries or milestones? Use your data to make educated guesses about what would be meaningful to customers, and track what happens after each change.
Revenue is necessary, but it's not the only metric worth growing. Look closely at how your team is doing in areas like referrals, efficiency, and churn. While some things are beyond their control, these things absolutely aren't -- and they can fuel a lot more growth in the coming year.