In today’s blog post, I want us to play a little game – the numbers game, to be exact.
Don’t worry – I’m not going to ask you all to put on your accountant hats and start calculating your accruals.
My friend and mentor, James Wedmore, is going to help you all reverse-engineer your goal and identify the Indicators of Performance that are going to help you put your business on the fast-track forward! These are the down’n’dirty numbers that will keep you and your business on the ball on a day-to-day basis.
Are you ready?
First, you come up with a goal – maybe you want to hit $10,000 in sales. So far, so good. But this is where most people stop. Just writing a number down on a piece of paper doesn’t get you any closer to hitting that goal! You need to figure out how you’re going to get there!
As James explains, having a series of action items is one thing, but how do you know if you’re taking the right actions? And, for that matter, the right number of actions?
Let’s look at an example:
If you knew that you could close one out of every two clients that you cold-called and you knew each deal would be worth $1000, you’d know that you’d have to make 20 phone calls to hit your goal. So, your Indicator of Performance (IOP) is to make 20 phone calls.
Most people don’t actually take the time to figure that out!
James says that a little TLC is just what your company needs – no, not tender loving care (although everyone needs a little of that as well!) In this case, TLC stands for:
Traffic – Leads – Conversions
TLC is the natural path that you take to get to your goal. Each letter has a different value – those values are the IOPs you need to hit in order to hit your big jackpot goal!
We figure these goals out in reverse.
That goal of 10 sales that we figured out earlier? That’s your Conversion IOP. If you know that your Conversion IOP is 10, then the next step is to figure out you Lead and Traffic IOPs. If you’re converting 1 out of every 2 cold calls, then your Lead IOP is 20. So how much traffic does it take for you to get those 20 leads? Maybe you need to reach out to 100 people in order to book those 20 calls – that’s your Traffic IOP.
So, how do you reach your IOPs?
For example, say that you’re planning a webinar – you can use Facebook Ads and your mailing list to drive people (your Traffic IOP) to your webinar (your Lead IOP) and then, at the end of the webinar, make your product offer (which will hopefully hit your Conversion IOP.)
James prefers to take money out of the equation entirely and boil the IOPs down to just 1s and 0s. 1 means you did it, 0 means you didn’t. Did you make those 20 phone calls or did you not?
If you base your success and sense of self-worth entirely on whether you hit the $10,000 goal, you’re going to be in trouble. Instead, make the focus of your day hitting those IOP goals – what is important is that you make those 20 phone calls!
So what indicators of performance do you currently use in your business? I’d love to hear about them in the comments!