Do you ever wonder why you’re business isn’t growing?
A 14th Century monk can give you a clue – he came up with Occam’s Razor, which is the principle that when you’re trying to solve a problem, the simplest answer is usually the right one. We can use Occam’s Razor for business growth, believe it or not.
Here are some examples of how you can use it in your business…
If you need more customers, look at how you got the customers you currently serve. What have you done in the past to attract people in that worked? Now do more of it!
It sounds simple, but lots of people never really think about where customers came from, so overlook the idea of going back for more.
This becomes very powerful when you’re getting frustrated with a problem in your business. For example, I’ve worked with one client over the past few months to increase footfall into his restaurant. It’s up by around 25% and the business is really buzzing with people now.
But in our last session he got a bit fed up when we reviewed his figures. People just aren’t spending so much, he lamented, and there was just a hint of gloom and doom about him.
Turning this on its head, I asked how much difference it would make to increase the value of each customer by £2, or even £4. The difference is staggering, both in terms of profits and in terms of turnover.
I always think of a simple equation to help me find the answer to problems like this. By keeping it simple, I’ve got the best chance of finding the easy answer. Here it is…
Profit = customers x average spend
Looking at this case, we’ve seen customer volume increase by 25%, but overall sales are stubbornly staying low, so the issue is with average spend.
It reminded me of an anecdote that McDonald’s something like doubled their profits, way back in the beginning of their business, simply by asking the question “Would you like fries with it?”.
Staggering eh? Which was why they then scripted this phrase so that you hear it in every single restaurant globally. It must be asked thousands of times every day.
So for my client, we have to find some similar ideas to offering fries with every meal. Only his restaurant is a lot nicer place than a McDonalds. Here’s a few of the things we came up with…
- Aperitifs – who can resist a Kir Royale, for example!
- Additional side plates with starters (Italian can offer garlic bread, Indian can offer Poppadoms, etc)
- Promote higher margin main courses
- Sell side-dishes by enthusing about their flavour
- Offer a plate of cheese in addition to a sweet
- Sell some interesting and unusual liqueurs
Just selling one or two of these as extras to each customer increases the value of the sale tremendously for a restaurant. Just remember to look for the solution in the most obvious place. Life’s complicated enough without adding to it ourselves, which is a great reason to love Occam’s Razor to solve business growth problems.