Posts Tagged ‘How To Increase Profit Margins’

NASCAR Racing Is Life! A Few Of These Tickets Will Increase Sales and Profitability

Wednesday, October 20th, 2010

In a previously posted article, Scorekeeping and Leaderboards to Drive Performance, the author discussed how measuring for performance cannot build fear and negativity into employees.  Driving bottom line performance with the right measurement will engage people and get people excited and committed to push performance levels.    Our experience with a retailer in Columbia, SC. proved that the right incentive can create a culture ready for the challenge.   In this case a large part of the company’s business plan was to increase their sales per guest visit.  The effort was a grass roots effort in which each employee picked a small, inexpensive item of the week that they would promote throughout the day.   At stake for the company was a goal of 2% overall increase in sales based adding an item of the week to one out of fifteen customer visits.   At stake for the employees was a pair of tickets to an upcoming NASCAR event.  It’s important to point out here that, for many folks from Columbia and points south, NASCAR is life.

Nascar_800px-Kurt_Busch_2008_Miller_Lite_Dodge_ChargerTo keep score they painted a miniature oval on the floor in the back office.    Each person got to choose a miniature car with the number of their favorite NASCAR driver.  Once the dust settled over who was going to get #3, Dale Earnhardt’s old number, the race was on.

Each time an associate sold their item of the week they got to advance their car one length.  The first ‘car’  to the checkered flag won.
It was a raucous week.  Lot’s of fun, lots of incremental sales, and the store increased its sales for the week by over 6.5% which was an unqualified success.

In addition to making the scorecard fun by picking a game board that the team related to and had an interest in, this team captured the essence of effective scorecards as motivators.  To be effective, a scorecard:

• Has to be about what I do

• Has to “talk” to me

• I Have to touch it and own it to believe it

• At some point is has to make me feel successful, whether it is hitting a target, showing improvement, or reinforncing my contribution

Simple, daily profit focused scorekeeping can be and should be fun.

Leave a comment telling us what was the most unique or innovative score keeping method you have seen in your company or another?

Or read this example of a poorly done scorecard: Scorekeeping and Leaderboards to Drive Performance

Who Is Holding Back Your Business?

Monday, June 7th, 2010

Box with Arrows_thumbnailYour people drive your business. Most have the best of intentions when it comes to making a solid contribution to the overall success of the enterprise. They do good work so you give them more work to do. They were your best account rep, your best payables clerk, best welder or project engineer so you made them leaders of people. The problem is that these outstanding individuals have neither the experience nor the training to be outstanding leaders, leaving them ill prepared for the job that they didn’t sign on for in the first place.

Take John for example. John recently became the team leader of 14 people who are responsible for $1,000,000 in production. Doing their very best, John’s team delivers 90% of the million dollar production budget. Managing by instinct, John tends to avoid conflict, uses the relationships with his former co-workers to emotionally bribe them into doing additional work, and measures success in the number of days passed where John manages to fly below the radar of the management team. John deserves better. He needs to be given the tools needed to do his job well. A small investment in his bottom line leadership skills will have a two-fold return: A gift to John that will last a lifetime and the opportunity for you to close your $100,000 budget shortfall.

Who’s holding you back? Who, not what, is standing in the way of your initiatives to increase sales, cut operating expenses and learn how to increase profit margins across the board? There is a John in your organization. He deserves a chance to succeed and continue to grow his contribution to the organization. An investment in John is not just an investment in John; he has 14 people reporting to him and they will also reap the benefits of his development. As John becomes a better leader we create the culture that will meet the demands of your business tomorrow and build ownership and commitment in the next group of potential leaders.

Do you think it’s too hard to find the time? Too hard to find the money? Stop for a moment and do the math. Can you really afford not to?