From the August 2011 issue of Investment Advisor • Subscribe!

July 28, 2011

Use Exponential Difference Makers to Grow Your Business

Small, strategic changes can have a big impact on your practice

As a child, we learned that any number multiplied by itself several times in a row will generate a much bigger number: for example, 2 x 2 x 2 x 2 x 2 = 32. We can also express that as 25 and we call that an exponential expression. Applying this mathematical concept to your business can help you double or possibly even triple or quadruple it.

The PGA Tour is a great example of how to get a huge result by multiplying a small improvement many times over. In 2010, Phil Mickelson won $3.9 million in prize money on the tour, had $52 million in endorsements, and his per round stroke average was 69.97. Contrast that with Justin Bolli, an unknown, unheralded pro who won $74,000 on the tour, had minimal endorsement money, and his per round stroke average was 72.89.

Phil Mickelson shot only three strokes per round better than Bolli, yet Mickelson earned 754 times more money. Mickelson’s three stroke advantage per round—multiplied over 76 rounds in 2010—translates into just a 4% advantage per round, but in the money column, it translates into a 75,440% advantage!

Just think, one missed putt or one wayward tee shot every six holes made the difference between mega-million dollar riches and complete obscurity. It’s the same in our business. One poor first impression, one ill-timed comment or one neglected marketing activity each week could be the difference between the President’s Club and the Pauper’s Club.

The key to doubling, tripling or quadrupling your business is to identify the exponential difference makers (EDM) in your business and make modest improvements in each one of them on a continuous basis. Look at the following partial list of EDMs and ask yourself, how difficult they would it be to:

  1. Increase your A+ referrals by 4%.
  2. Add 4% more A+ clients.
  3. Get 4% more of your A+ clients’ total assets.
  4. Reduce your expenses by 4%.
  5. Reduce your client turnover by 4%.
  6. Get your staff to give 4% more effort.
  7. Improve your communication skills by 4%.
  8. Perform 4% more random acts of kindness for your clients.
  9. Deepen your A+ client relationships by 4%.
  10. Return client calls 4% faster.
  11. Improve your first impressions by 4%.
  12. Increase you and your staff’s passion for success by 4%.

If you only perform one or two of these items, you will not get exponential results. You have to do a significant number of these EDMs on a continuous basis before the power of exponential mathematics kicks in.

It is not as difficult as you might think. The key is to be intentional and be fully engaged in every activity you and your staff perform. Be on the lookout for insights, new twists and nuances as you go about performing your activities. For example, let’s say you’re meeting with a prospect and in the course of the conversation, you say something brilliant that really lights up the prospect. That’s an insight that you need to be aware of and make part of your repertoire.

It’s the same for your staff. Remind them that they should be on the lookout for new and improved ways of completing tasks, communicating with clients and prospects, and elevating the level of service they provide. When they find a new and improved way to do something, make sure they document it.

The Japanese have a word called kaizen, which means gradual, orderly and continuous improvement. It applies not just to business, but life as well. If you adopt the philosophy of kaizen and focus on making small but steady 4% gains in your exponential difference makers, your incremental improvements will turn into quantum results. Before you know it, you will have a Four Seasons practice with Southwest Airlines efficiency and high profit margins.

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