How to Avoid Costly Mistakes in Your Business

How to Avoid Costly Mistakes in Your Business

There are way too many businesses without well thought through processes; it can be so plainly obvious especially if you are on the receiving end.

So I want to explore this a little and point out the impact of not having business systems and processes in place.

In that vein…I’m sure you have experienced bad service or been let down in the past. These are the businesses that give you the wrong information or don’t get back to you. These are the businesses that you never return to.

Sure, many businesses get away with it, but at a cost.

They lose out to their competitors and miss out on profit. Not to mention, it’s much harder to run a business that doesn’t have business systems in place compared to one that does.

How to Avoid Costly Mistakes in Your Business

We know that businesses worth millions are built with efficient business systems, but what about the smaller businesses; how can they build systems and improve efficiency?

Mistakes happen in every business: sometimes things happen that are out of our control.
But with first class systems and processes in place, most mistakes are avoidable.

Every business benefits from having their core business processes optimised and documented.

Let’s take a look at a simple case study and how a core process plays out; the “New Client Booking and Service” process:

Case Study: Sally’s Hair Salon

Here’s What Happened

Monica decides to try the new hairdresser in town; so she makes an appointment for a haircut over the phone. Jesse takes the booking and is friendly and polite.

Monica arrives for her appointment; she is quietly excited as she has been looking forward to a new style cut. Jesse checks the computer but can’t find Monica’s booking… oops! it hasn’t been entered into the system. With the salon fully booked all afternoon, Monica is now looking worried, and so is Jesse.

Unable to hide the fact that there has been a mistake, Jesse squeezes Monica in between clients, and without any niceties, Jesse starts to wash Monica’s hair.

Monica is then seated and told that she won’t have to wait long.

She waits. And waits. For 1 hour.

With no idea when she will be seen, she sends a text message to her husband to tell him that she will be late.

No one in the salon attempts to make amends; they are all too busy.

Monica meanwhile is left sitting with cold, wet hair. Now livid, she watches as Jesse and the other hairdressers chat to other clients.

Eventually, when she is paid some attention, Monica’s excitement has now faded. In her eyes no matter what the salon does from now, the experience is ruined.

Monica now feels disappointed, inconvenienced, and annoyed that the whole experience cost her $70. Monica smiles politely, says thank you and leaves.

She considers leaving a review on the salon’s Facebook page but instead vows never to return and inevitably tells all her friends about the bad experience.

What Went Wrong?

Let’s take a look at what would have happened had the salon had in place an awesome New Client Booking and Service process:

  1. New clients are identified at the time of booking
  2. New client is asked about the type of service they require (so enough time is allocated) and for their phone number
  3. Advise new client to allow 10 – 15 minutes for a consultation
  4. New client details are entered in the system, and the name of their hairdresser is provided
  5. The new client receives a reminder by text message three days before the appointment
  6. On arrival, the new client is greeted, and the hairdresser spends at least ten minutes to provide a full consultation
  7. During hair washing, the hairdresser is to engage in conversation to help the new client feel at ease
  8. After hair washing, client is seated and asked if they would like a cup of tea or coffee
  9. While new client is waiting, offer some magazines to read
  10. During hair styling, chat with new client to build rapport and get to know more about them
  11. Make sure the new client leaves the salon happy with their service and having had the opportunity to provide feedback
  12. Before the new client leaves:
    • Provide them with a discount voucher for their next visit and one for a friend
    • Provide them with a free sample of a hair treatment product
    • Tell them about the salon’s Facebook page
    • Ask for their email address and permission to send the salon’s newsletter with monthly specials
    • Ask them if they would like to make their next booking for six weeks time
  13. Make notes in the client record in the CRM:
    • The name of hairdresser that served the client
    • Details of style and customer preferences
    • Any memorable details – this builds rapport for future visits
    • What is the customer’s drink preference

For example:
“Booking was with Jesse. Monica lives locally and is a member of the local church choir. Monica is going to Paris for her 10th wedding anniversary, be sure to ask her about her travels on her next visit. Monica likes her hair cut to shoulder length and layered at the sides. She was given a sample of the Silk Ribbon Hair treatment, ask her how she liked it on her next visit, there will be a promotion on these products in July. Monica likes her coffee strong with milk no sugar.”

14. Three days after the appointment date, an automated email is sent to the client thanking them for their business and politely asking for a review.

If Monica had experienced the full service that every team member at the salon had been trained to provide, the results would have been very different.

The Value Of A Customer

Let’s say Monica loved her experience so much, (even though the prices were higher than her old hairdressers) that she decided to become a loyal customer. The value of Monica as a customer looks like this:

Monica has her hair cut 6 times a year – Total $560
She has a colour treatment 3 times a year – Total $450
She purchases some products – Total $200 per year

Monica’s annual spend per year at the salon is $1210. If Monica is a customer for 10 years she is worth $12,100. If Monica introduces 5 friends and they too are a customer for 10 years, the value to the business is $7260 per year or $72,600.

As you can see, Sally’s Hair Salon just missed out big time.

The Steps You Can Take to Systemise your Business

Don’t make the same mistakes as Sally’s Salon; I see this type of scenario play out all too often. By having a simple system in place such as the Client Service Process as described, you can avoid costly mistakes and gain raving fans of your business.

And the good news is that it’s not that hard. Getting a core system mapped out and implemented in your business doesn’t take much time.

Here are a few tips to get you started:

  • Pick one process in your business that you regularly do. Make sure it has an enormous positive impact (if done awesomely).
  • Take a good look at how you are currently performing the process; there is always room for improvement.
  • Get your team together and discuss how you can “pimp up” this process. Think outside the box. Getting your team’s involvement empowers them. What could you do that to outshine your competitors?
  • Write it down, get it in into a document and get your team motivated.
  • Test and improve. Next opportunity you get, roll out your new process and get feedback. Tweak the process as you go until you get to that happy place when you know you’ve nailed it!
  • Rinse and repeat.

You grow faster, serve better and become more profitable when you implement business systems.

How to Avoid Costly Mistakes in Your Business

If you’re ready to dive in and get your business systemised the smart, easy and convenient way, book in a call with me, and let’s explore how utterly brilliant your business could be and how to get you there.

 

Submit a Comment

Your email address will not be published. Required fields are marked *

Share the knowledge