The Scorecard Deep Dive
In this week's BGC, Nigel shares with you one of the most valuable things you can do in your business, right now, to move it forwards.
It was responsible for some of the BIGGEST breakthroughs last year for Nigel's Mastermind Clients and is sure to have a MASSIVE impact on you if you listen, learn and implement.
Many of you have asked for a 'deep dive' version of this episode, so here it is...
Hi, welcome to Business Growth Central, wherefore this week's episode, we are back in the studio as you can see, and that's because I need to cover off, inappropriate detail. What is probably, the most valuable thing, that you can do in your business, right now. And I'm talking about your, scorecard.
Now,the scorecard, has been responsible, for, some of the biggest breakthroughs, amongst my mastermind members in 2020. And I know already in 2021, it's made a significant impact, in the speed at which businesses have been able to get out of the blocks and really making meaningful progress. All sounds great Nig's. But what should be on my scorecard? Its a really good question.
So I'm gonna take you through in this episode, is how to build, and operate your own simple scorecard for your business which if you do it properly, will make a big difference, to the sales that you get, the profits that you get, the income that you get this year. The starting point is to ask yourself this question. I mean, how do you know, what you should be focusing on? Not just you, but your team as well, where you've got people working with you, what should their main focus be every day? Because those are the things, that need tracking on the scorecard. And the challenges we all have in business, is that it's very easy for all of us to get kind of sucked in to what we call the day to day. The stuff that has to be done, but which doesn't actually move the business forward. And, what is very good at, the day-to-day is fantastically good, at sapping time and sapping energy and taking focus away from the things that can move the business forward. And the scorecard, plays a really important part, a wonderfully simple tool. But when you've got a daily or a weekly scorecard, it helps to force your attention, on to the right thing. Now there's three steps to building your scorecard properly.
And then here's the first step, we have to get clear on the small number of measures, keyword there by the way, small, the smaller measures that will determine your success. And I know that in every business, there's lots of things that we have to do, but in truth, when we actually distill it down properly and think about it properly, there's only a very small number of things that really matter when it comes to moving the dial to where you want it to be. And therefore, understanding what these small number of things are, does require an accurate understanding of your business, which is something that not everyone has. So you might need, some help here. It's an area, our network of EC coaches, we have over a hundred coaches, right across the country, specializing in all different sectors. And one of our EC coaches, would probably be perfect for you, in helping you to get your scorecard right and then to start working towards it.
One of the important principles with the scorecard is that, less is more, and, what you don't wanna have. You know, what we're not trying to do here, is like manage the whole business. We're not trying to keep an eye on everything. This is more like a Morris Minor dashboard, than a, jumbo jet, Boeing 747 dashboard. You know, you thought we on tour, and they've all got those masses and masses of dials there. We want something that's very, very, simple. Now in any business, there are two fundamental components, of what delivers the business results. We call them inputs and outputs. So inputs, is typically the work that we do or the things that we do, to bring about the results. And the outputs well, those are the results themselves. Let me give you some examples here, this might help you. And score cards by the way, can be a combination of inputs and outputs. They can just be output. It's quite rare. You've got to be quite sophisticated to just have outputs, although I will show you an example at the moment that's got that.
Typically scorecards will be focused towards the input side. But so for instance, on outputs, on output measure, might be new customers. New customers coming in at an output of the work that you do. Oh, we got a new customer, it's an output. And revenue, definitely output. Revenue can be tracked in all sorts of different ways, transaction size, or average revenue, or monthly recurring revenue. But any kind of measurement of revenue is always an output. And it might be the number of orders, or bookings that have been taken or may, that's an outputs, 'cause something's actually happened. As a result might be the total number of clients for instance. So, just a few examples of outputs there, key things that happen in a business, and the outputs are driven by the input. So an input would be for instance, email sent, cause we send emails to get bookings, to get sales.
Meetings or appointments held, is a really good inputs. So, you know, if you're in a business where you have to meet with clients before they buy from you, then on your scorecard, tracking the number of meetings that you have in a day or a week can be a really good measure. Quotes or proposals sent. Again, it depends on what the business is, but if that is part of your sales process, really important input measure. That's an input measure because, no one buys until they've had the quote or proposal, so you input that into the process. Calls made, telephone calls made, really excellent kind of measure. Again, this would typically work where you're in control of it. Be very unusual to have calls received, inbound calls on a scorecard but, calls made where you're proactively reaching out to customers, can be a really kind of good measure. But the trick here, is not to try and capture everything, it's to understand your business well enough, so that you know exactly what the very small number of measures are, that will determine your success. And I've got a few examples for you here.
So we've got an optician, and he was subject to all the day-to-day challenges that everyone else has. Getting pulled in all sorts of different directions. But what he recognized when we drill down with him, is that there are really only two major factors, that impact the performance in his business. And interestingly, these are both outputs of these. So one is the number of eye tests, not every single, piece of sale or transaction comes from an eye test, but the vast majority do. So how many eye tests, did that optician store do today, is a key measure. How many could they have done? What percentage of capacity? Where they full? Etcetera. And if you, the second one then is the average transaction, through the till. So what was the average spend of customers? 'Cause if you take those two things together, you get those two things right. It's very difficult to fail as an optician. They are the two things that drive success. And with this particular optician, we identified, you know, getting focused on these active maxing is capacity. You have the right optometrists in place, so he could see people. That was worth a seven figure, seven figure sum to his business over the course of 12 months. So the optician on his scorecard has number of eye tests, average transaction through the till and the total revenue. And he tracks that on a weekly basis, in each of his stores. I'll show you his actual scorecard in a moment or two.
This one is a B2B service provider. So for him, no one buys, without a discovery call. So a really good input measure on his scorecard, is the number of discovery calls that he's taken today. And net new clients is his second measure. So he net new clients obviously is, not just new clients in but he takes off that number, any clients that leave. So he's got his net new clients in grow. And then he's got his marketing spend, which is a really good input measure. A lot of businesses, kind of forget to spend the marketing. They kind of know that they can, but they don't focus on it particularly, if using Google or Facebook, is a key part of your acquisition system. Then making sure you're spending the money can be a really valuable part of the scorecard. And then the fourth measure he tracks, it is monthly recurring revenue, and he tracks exactly what that is, because it should be going up, every week that goes by, as his net new client numbers grow. Does that makes sense?
So he's kind of got all the four elements in there, that if he hits those four, if he does the right number of discovery calls each week, his net new clients will grow, and to get those calls and to spend the money. But if that's growing, then this should be growing. Everything should be good. And on four numbers, just four numbers in a scorecard. He's got a good handle, on how his business is doing. And a photographer in normal times, or typically measure number of shoots booked. How many people are booked to come in, for a shoot in the studio? What was the show up rate? 'Cause that can be an issue for photographers in certain sectors. People not showing up, particularly if they're in boudoir shoots that sort of thing quite high dropout rates. So show rate is a key thing. Average transaction size again, but like the optician, just keep average and then the total revenue. Now once you've understood what the measures are, that right are gonna determine your success. Then you can set weekly or daily targets, for each of those measures. Key thing there weekly or daily, do not be tempted to go monthly on scorecard. Monthly is a bad thing for scorecards. You want a daily or a weekly measure, and it should be fairly obvious which one is right for you, depending on the kind of rhythm in the business.
Clearly if the target you're looking at, is one or two a week of something, then tracking it weekly is the right thing to do. If what you're looking for is, 10 or 15 of something a week, well then tracking it daily can be a sensible thing to do, 'cause you've got things happening on a daily basis. And once you've set the targets, all you've then got to do, is set up a physical printed scorecard. Don't have this sat on an Excel spreadsheet, buried on your hard drive somewhere. 'Cause nobody sees it. And the real power scorecard, or when they're coming to the room, when you actually see it on the wall. Here's the opposition scorecard. He's got three stores. Eye test average spent turnover. He sets targets for each one. The targets are different, for the different stores that he's got. And then he's able to then track it. And he turns his numbers, green or pink. It goes amber and they're very close by. I'm personally not a big fan of Amber. I'm a kind of red or green man. We've either had a good week or a bad week. We either got there or we didn't get there. None of this namby-pamby, yellow, Amber stuff for me. That, he like to use it, which is fine, 'Cause it's his scorecard, his prerogative.
The B2B service provider. You can see the thing here. Discovery calls, new clients in, lost clients out. It gives his net new clients, marketing spend, what's he actually spend there, what's his total revenue, for the month against the target. See that's his monthly recurring revenue. And then here's our photographer, and the form at a shoots book show up rate, average transaction, total revenue. They've got targets for each one, critically important that you score colors targets. So you got something to go against. And then again the same thing happens then. reveal it, you can see exactly how he's tracked it there, again, using the green or pink, green is at or above the target, pink has gone below target. And he does a weekly total as well, which is really smart. So you can tell, he goes away at the end of the week. Has it been a good week or not? You know, on this basis here, says that's probably yes. You know more shoots booked than he was expecting, show at rates above target. Although his average spend is just a smidge below, but his actual revenue for the week, is just slightly above target. So he knows where he is. You can see when you start to get this level of clarity, on the key measures that really are important. How everybody in the business can get focused on it and score brilliant, when you've got staff, 'Cause they can relate really mobilized behind it. And this, next other sheet here, is the photographer kind of in a crisis mode. Like now when he can't shoot in the middle of a pandemic. So he's put a different scorecard in place. 'Cause he's trying to, how many people have I actually spoken to today? He's going out to ring people, to trigger bookings. He only wants to bank a deposit from the booking, and he's also gonna sell some vouchers to previous customers. So he's done a separate little scorecard, just to get him through, one of these lockdown's that's going on right now. And again, he tracks himself and his team, so they know how they're doing against target. All works very well. 'Cause scorecards do work well, when the thinking behind them is right. One final example of a scorecard, is the diary scorecard.
And this is really powerful, if your business growth this year, depends on you having meetings, with potential new clients. If part of your sales process for what you do is that you have to meet with people, either online or in real person. You have to have meetings, then actually looking at how many meetings do I want on a weekly basis? And then actually putting the meetings in the diary. And this is something that, and I refer that we worked with in mass and has done really, really well. And he keeps his mornings free to do the things that he wants to do, to drive his business forward. But the afternoon is his new client time. And what he wants is a meeting at one o'clock and a meeting at three o'clock every afternoon. That's what he wants to do, to move that. And if he there's eight of those meetings a week, my goodness, me his business is taking off, absolutely firing. So he puts the meetings in the diary. All that's missing is the name of the person that he's meeting with. But it's a really effective way, to drive activity. 'Cause you're looking now, I just want to fill a slot. I need a name against that, I need to see someone. Thursday at one o'clock, that's my gap. I've got to get it in. And before he goes home on a Friday, it doesn't mean Friday afternoon he goes and walks on the beach or sits in his hot tub. But he can only do that, when he's got the diary for next week, fully booked up. And that's driving him, to focus on the right activities, that will move his business forward. Which is what the scorecards are all about. And that's why scorecards, are still, probably, the most valuable thing that you could do, in your business right now. And you now understand them, a bit better than you did 10 minutes ago.
Hope that's helpful.
Thanks for watching, more Business Growth Central next week. Bye bye.