7 Levers Report
Gurus are usually talking about their specialty, not the big picture. And they are a lot of times talking about what has worked in the past or at the end of a cycle, meaning it could end at any moment.
The Truth That Nobody Is Talking About
Why do businesses fail? Here are some main reasons and why a business needs to be managed properly or be left to fall apart on its own.
- Prospects price-shop and try to jew you down in price. Tip: never negotiate!
- Some suppliers and partners looking after their own profit at the expense of yours.
- Employees or subcontractors hitting you up for high pay while giving back the minimum.
- Customers drain your resources with complaints, nit picking every little detail of your service.
Doing more to solve the problem:
- working longer hours
- investing in courses
- improving your product or service
- chasing latest and greatest
- ignore the problem and it will go away
Approaching things the wrong way:
- Throwing all your effort into optimizing one area of your business.
“How do I make more sales?”
“How do I get paid better for all the hard work I put in?”
“How am I going to do it all without burning out from the stress and demands on me?”
You’re going to take things away; focusing on only what’s necessary.
Chapter 5. The Leverage Points that Matter
The 7 levers always work and they work together to give you compounded results! Only these 7 Levers will grow a business without fail.
Work on your business, not in your business. “E-Myth”
You must get rid of frustrating and unprofitable tasks and clients who take you away from your 7 Levers Goals.
Improve the 7 aspects of your business and your profits will increase. These are not sexy but they work.
- First-time Visitors or enquirers. Every person who visits your website or walks into your store adds to your overall list.
- Prospects. People who take action beyond merely looking, generally before the buying stage. On your website they register their email address or fill out short-form. Or someone who tries on a shirt in a changing room.
- Conversions. Percentage of prospects who take out their credit card/checkbook and commit to purchase.
- Item Price. Average price of the items or service you sell.
- Items Per Sale. Average number of items purchased in each transaction.
- Transactions Per Customer. On average, how often customers make repeat purchases, buy from you again and again and…
- Profit Margin. Less the cost of making sales, what’s the overall profit margin of all sales as a percentage.
Measure and calculate these these numbers monthly or quarterly.
Chapter 7. The Principles in Practice.
If we increase all 7 Levers by 10%, there is an amazing compounding effect that takes place.
Lets work out the metrics for the last 12 months.
INCREASING ALL SEVEN LEVERS BY JUST 10% WILL EFFECTIVELY DOUBLE YOUR OVERALL PROFITABILITY.
Aunt Paulette’s Clothing Store
Lets work out the metrics for the last 12 months.
Now, lets work out the metrics for the last 12 months.
Here is my Aunt working on the 7 Levers to gain a small 10% increase in each one. Examples of activities you could implement to win, are included. Notice how small tweaks have a massive effect in the end.
SUSPECTS A new marketing initiative leads to a 10% increase in the store’s foot traffic.
That means you now have 110,000 people coming through the doors.
PROSPECTS You implement some basic sta training, and increase your Prospects by
10%. You now have a suspect-to-prospect rate of 22%
Already, this means that 24,200 people are trying on garments instead of the original
20,000. This is after only two 10% Wins.
CONVERSIONS Now you add some advanced sales training and increase your
conversion rate from 20% to 22%
This means of the 24,200 who try something on, 5,324 of them now go on to make a
purchase (up from 4,000)
AVERAGE ITEM PRICE Next, you’re able to slightly increase the prices of the items in
your store and/or encourage your customers to buy higher priced garments (with
better salesmanship), increasing your average item price to $110
ITEMS PER SALE At McDonald’s, they say “would you like fries with that?” You
implement a similar ‘up-sell’ technique and increase the average number of garments
per sale by 10%. You now have the average customer buying 1.21 items per sale.
Another quick recap:
With 5,324 customers, on average each purchasing 1.21 items with an average item
price of $110, so your revenue jumps to $708,624.40 (up from $440,000, but don’t
order the new car just yet!)
TRANSACTIONS PER CUSTOMER You’ve also implemented a little post-sale
marketing and start getting some repeat business. 10% of your customers return to
make a second purchase, so the number of Transactions per Customer is now 1.1
As a result, total revenue is now $779,486.84
PROFIT MARGIN Finally, after looking at the books and getting a little more savvy with
expenses, you’re able to shave some costs and increase your overall Profit Margin by
10%, taking you from 15% to 16.5%
Your net profit is now $128,615.33, a significant increase from the original $66,000.
Chapter 8. Road Map for Growth Hacking
10% Tweak to Double Your Business Profits in 7 Weeks
All my traffic is currently coming from SEO and content marketing.
For a quick 10% win, decided to put together a basic paid
advertising (Adwords) campaign