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Six steps to add value to customers

Module 1: Five questions every CEO must answer

So far you have identified who your company is, why you exist, the values that define your business, and where you see the company in three to five years. You’ve identified your ideal customers, determined what they value, and decided how to measure the value you provide to them.

All this leads to the final question: What’s the plan to add more value to more customers? In other words, what’s the growth plan? Use these steps to develop such a plan.

1. Pre-plan

Before you even develop your plan, discuss the planning process and activities with your executive team. Determine who will be involved in which steps of the development of the plan. Describe the process and timeline. Then, assign roles and responsibilities.

2. Take inventory

Take a close look at the external environment in which you are operating (e.g. your markets, customers, competitors, trends, opportunities and threats) and look for:

  • changes in environment (e.g., trends or tech developments)
  • changes in customers, markets, channels
  • new competitors or new moves from old competitors
  • changes in customer behaviour and satisfaction.

Look internally at your strengths and weaknesses, including your people, and especially your organisation. It’s critical that you have the right culture, people, executive team and infrastructure in place. Plus, you need to be using the right leadership skills at the right stage of growth.

3. Paint the vision

Write down where you want the company to be in three years. Discuss this with your executive team. Identify potential risks and pitfalls that could derail you, critical staff you need to add, and how you will know if you have succeeded.

4. Set goals

Select five goals and tactics for the current year:

  1. The money goal: You can express this as an increase in revenue, profit or EBIDTA₁, depending on your priority this year. Include two or three tactics for achieving that goal (e.g. increase prices by 5%, introduce a new product in Q2 that will generate $1M revenue by end of year, or cut travel budget by 15%).
  2. The customer goal: This goal could be to increase the numbers or percent of new customers, increase customer retention or customer satisfaction, break into new markets, or perhaps weed out unprofitable customers.
  3. The product or service goal: This goal could be to develop or introduce a new product line or service, add features to your current product, bundle a set of services with a product, or even buy a new company with products your customers will want. In effect, this goal is about expanding your offering so that you can sell more to current or new customers.
  4. The marketing goal: This goal should focus on how you’re going to get your company’s message to more customers to sell your products and services, and achieve revenue goals. Tactics could include updating your website, getting each customer to provide a referral or recommend the product to another customer, TV sponsorship, or attending trade shows.
  5. The infrastructure goal: This goal is focused on creating a strong organisation that will support growth. When your company is growing you need processes for hiring people, providing them with new and better tools, moving into new space, opening up offices in other cities, transitioning to more sophisticated hardware and software systems, developing training programs which enable you to promote from within, and keeping everyone on the same page.

Develop these goals and tactics with your executive team, and then announce them to the whole company.

5. Develop the plan

The tactics associated with each of your goals will become your plan to add more value to your customers. Each member of the executive team should review the planning document with their direct reports and develop a proposed set of activities their unit could undertake to achieve these goals.

6. Implementation and execution

All unit heads are responsible and accountable for executing their individual plans and should meet monthly with their team leader to review progress on the plan. One good way to ensure your plans are enacted is to have team leaders meet quarterly to review and discuss progress. Any new ideas can be parked for consideration until the next quarterly meetings. On this suggested timeline:

  • Q1 reviews occur 15 days after end of Q1
  • Mid-year reviews occur 15 days after end of Q2
  • Q3 reviews occur 15 days after end of Q3
  • The Q4 sprint is a focused effort to achieve the year’s goals and develop the plan for the next year.

Developing a plan and a planning process will align your employees around a few goals and a small number of tactics, which should enable them to add even more value to your customers.

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EBITDA - earnings before interest, tax, depreciation and amortization (EBITDA) divided by total revenue

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