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Why a mid-year business assessment could be what you need to achieve your 2022 targets. 

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Business Owner’s Mid Year Assessment

It’s June 2022, the mid-point of the year and a perfect time to conduct a  mid-year business review to take stock of how your company is really doing. 

Are You Hitting These Crucial Points In Your Mid-Year Business Review? 

A typical mid-year review breakdown involves looking at all aspects of your business including: 

  • Financial Health: Are you meeting your financial goals? How well are you performing against your budget (you do have a budget, right?)?  How are your ratios and KPI’s vs. expected results? Dedicate the needed time to evaluate your cash flow and what areas of your business you’re spending too much on. Your financial health at mid-year can foreshadow what is to come so it’s crucial to resolve any financial issues. 
  • Employee Wellbeing: How has your employee retention rate been? When was the last an employee survey was conducted? Are you taking proper measures to make your team feel heard? Do you need to re-evaluate team structure? 
     
  • Sales & Marketing Efficiency: Have you checked up on your target audiences lately? What audiences could you be reaching that you haven’t yet? Has revenue met your expectations? How can you increase your ROI on your marketing expenses? Are sales numbers growing, declining, or hitting a plateau?  
     
  • Logistics and Operations: Are your products/services being delivered timely and accurately? Have your margins changed/costs increased (i.e. service & installation costs)? Have quality or customer satisfaction changed? 

This year, these points are more important than ever. 

2022 has had its own challenges whether it be watching consumer behavior reflect the inflationary times, the supply chain shortages, or the Great Resignation. In result, business owners and CEOs like you are adjusting your pricing models, services and overall strategies to combat what continues to be an even “newer” and evolving normal.  

Below is the nitty gritty snapshot questions to review during this mid-year assessment. 

Financial Metrics: Bottom line, are you meeting the goals you set at the start of the year? Are you growing your revenue or at least stabilizing? Are you consistently meeting your target income? If not, what is stopping you from doing so?  Where are the gaps between your goal and its completion? 

Regardless of your specific business and situation, there are some important points you need to consider: 

  • Any collection issues that need attention?  
  • How well are your expenses being managed? 
  • Is it time to raise your rates/prices? 

 
Inflationary Strategies:  Prices on almost anything and everything has gone up. Have you been adjusting your pricing accordingly? Are you taking note of the pricing changes whether it be with your supplier, your deliveries, your sourcing, or cost of production? Have you thought about creating long-term contracts with vendors, suppliers or shippers so that the pricing isn’t impacted as much by inflation? Are your customers staying loyal through your higher prices and are you being transparent with them through the process?  
 
When you do have to raise prices make sure your customers have many other reasons to stay with you and are not motivated to price shop.  
 

Supply Chain Risk Assessment: Supply chain shortages, empty shelves and long wait times have become a staple of 2022 and it definitely impacts the way a business can operate and serve their customer’s needs. Do you have a supplier who is constantly delaying shipments? Are your products constantly out of stock? It might be time to look at new and additional relationships or find more local sourcing.   
 
After a stream of supply-chain issues, business leaders realize the strategic importance of supply chains to the overall health of their organizations. During your company’s mid-year review, take the time to conduct a supplier risk evaluation to spot warnings signs of your company’s exposure to supply chain risks.  
 
Great Resignation Review: This generation is really fighting for work-life balance, career growth and company recognition. Many companies are struggling to win and keep the right talent in their organization.  The constant turnover and lack of loyalty is costing American business owners.  

Assess your current workplace culture, turnover and retention incorporate strategies for the rest of the year and beyond. Understand how employees’ needs, priorities and expectations have changed. Address burnout – it is real. Utilize outsourced and fractional talent when and as needed.  
 
Customer Satisfaction Measurement:  A mid-year review is a great time to measure customer service performance. When considering how to assess customer service at your company, you will quickly realize that there are quite a few different factors that you could measure. It might also become apparent that focusing on just one area at a time will leave major blind spots. 
 
What is your customer retention rate?  Do you know if your customers are completely satisfied with your service, products, quality, and prices?  Do they see the value you offer, or could they easily be swayed to go to a competitor?  Customer surveys are an ideal tool to get honest, constructive input that you can quickly implement resolution strategies and reach out to customers to further build the relationship.  
 
Resource Allocation: Have you sat down with a business advisor and gone over your cash flows, your allocated funds, and your budget? Where is your money going? Where is your money coming from? What department spends the most and why? Are there certain activities and expenses that aren’t adding value, or a product you sell that costs more to make than the ROI it brings in? Have you invested in programs, machines, equipment, etc. that can actually bring you revenue in the long run?  

There are many touch points in building a great business, so taking the time to truly be real and  honest about your company’s performance in these key areas can impact the next six months and beyond. 
 
Here at AETucker Consulting, we can help you get there! These unprecedented times continue to create obstacles we haven’t easily foreseen, and we can all use a bit of help to navigate each one accordingly. Contact me, Andrew Tucker, for help with this process. We can guide you through an effective midyear assessment and provide action plans to keep you on course. I can be reached by e-mail at andrew@aetuckerconsulting.com or by phone at 704/651-2216.  I look forward to working with you.

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The Measuring Stick of Revenue & Loyalty: Net Promoter Score

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In the early 2000s, Frederick Reichheld, a Bain & Company Fellow, was on a quest to determine if there were indicators beyond “customer satisfaction” surveys to indicate customer loyalty, engagement, and probable future sales. These customer loyalty insights were coined, Net Promoter Score® (NPS).  NPS is a customer loyalty and satisfaction measurement taken from asking customers the ultimate question: “How likely is it that you would recommend Company X to a friend or colleague?”  Today, many organizations consider it the gold standard to not only assess the customer experience, but to predict business growth by quantifying loyalty.

Why is NPS So Important?

Imagine the shock of spending most of your time ‘chasing your tail’ due to customers, suppliers and employees that aren’t as committed to your company and loyal to your brand as you thought?  You can measure almost anything using the NPS metric. In addition to understanding the overall NPS for your organization, you can track scores for everything from individual products, services, stores, web pages, or employee retention.  NPS can help your company understand your target market better and see how they respond to your product or service, social media campaigns, and customer service agents. The goal is to gain loyal customers who become brand evangelists instead of consumers.

How to Implement Net Promoter Score Metrics?

To calculate the NPS comes from the golden question: “On a scale of 0 to 10, how likely is it that you would recommend our organization to a friend or colleague?”

Based on the number a customer chooses, they’re classified into one of the following categories: “Detractors,” “Passives,” and “Promoters.” 

Breakdown Scores

  • 0 – 6: Detractors
  • 7 – 8: Passives
  • 9-10: Promoters

First, ask the question (how likely are you to recommend) and gather the data. This can be compiled via phone surveys, web surveys, in-person surveys, kiosks, cards at checkout or even QR codes.

From the data received you can categorize customers into the breakdowns: promoters, passives and detractors. Using the data from the previous two steps, do the following calculation:

Step 1 – NPS = % of Promoters – % of Detractors

Step 2 – NPS = 55% – 35%

Step 3 – NPS = 20%

Find benchmarks through your industry association, your survey provider or do your own survey of your competitors to see how you measure and compare to your competition.  If someone is unhappy with your services or products it’s critical to respond quickly to make sure you show empathy and can resolve and capitalize on any complaints.

Dig deeper and determine why customers are in each bucket. This will probably require further segmentation by age, sex, demographics, and customer type. You will discover over time, there is a correlation between a positive NPS score and the lifetime value of a customer.  Using the NPS metric to constantly guide both strategic and tactical decisions is a long-term tool to ensure profitable growth for your organization. If the customer’s score is low, then we as business owners must assess whether the problem lies in the experience or in expectations set during the sales process.

How Do You Measure?

How well is your business doing in the eyes of your customer? How do you know? What are you doing with that information?  If you wish to speed up the process, there are several NPS tools and surveys to consider implementing within your organization. LINK

We are all familiar with the concept of what we regularly measure and focus on tends to improve. Now more than ever is the time to focus on your customer’s loyalty.  Ask customers how you can help—and how you can provide an even better customer experience. What you do today, the empathy in the messages you send to your customers: that will be what they remember when we move into a post-coronavirus world.

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