Categories
Marketing

Is Cost of Customer Acquisition Eating Away Your Business?

Introduction

  • Are you facing a problem in calculating your Cost of Customer Acquisition(COCA)?
  • Do you think that your margins are low because of High COCA?

Many businesses fail because they spend too much on acquiring a client without calculating the cost.

This impacts their margins and profits that hit the company despite the best strategy.

So, it is important to understand and calculate customer acquisition costs.

What is COCA?

The full form of COCA is the Cost of Customer Acquisition. It is the customer acquisition cost, which means the cost of convincing a potential customer to buy/use a product or service.

In simple terms, the company incurs a lot of expenses on marketing & advertising its product to reach out to the potential buyer along with the salary of its employees. The total amount spent in this process is called the Cost of Customer Acquisition (COCA).

Once COCA is calculated, we can arrive at the actual Average Cost per Customer.

Calculating COCA

Let us take an example to understand how to calculate customer acquisition cost. 

A businessman spends Rs 1 crore on ’Marketing + Advertising + Sales’ and acquires 100 new customers.

Now, Cost of Customer Acquisition or COCA can be calculated as:

COCA = (Sales and Marketing Expenses)/New Customers Acquired

COCA = Rs 1 crore/100

            = Rs 1 lakh

That is, Rs 1 lakh is spent by the businessman to acquire one additional customer, which is the customer acquisition cost.

Now, your next step is to analyze whether you can afford 1 lakh rupees to add one more new customer or the Cost of Customer Acquisition.

If you have a business of repeat sales i.e. recurring revenue model business, then a new customer can give you good business in the next 5 years.

If a customer is buying only once and cost to add a new customer is more than what you get by selling your product, in that case, it is not a good idea to invest so much in acquiring a new customer/client.

Points to Remember

Business Loss = COCA > Business Expenses

COCA < Expected COCA, here you consider your friends, family & relatives as your customers and once they go away, you find yourself in a tough situation. So, it is important to make some budget for bearing cost of customer acquisition without plunging into the negative margin.

It is important to understand the long-term relational value while acquiring a new customer.

You need to identify those behaviors that are indicative of a loyal customer. And then you need to hold your customers for repeat business.

Retention marketing is a new battleground in the business, where tracking is compulsory.

Categories
Finance

How to pay loan faster in 8 Easy Ways

कोरोना काल में बदला उपभोक्ताओं का व्यवहार
कोरोना काल में बदला उपभोक्ताओं का व्यवहार

Introduction

  • Are you facing problems in paying off loans?
  • Are your loans taking away all your savings?
  • Do you want to know how to pay loan faster?

Because of the lack of enough knowledge on how to pay off a loan early, many businessmen in India plunge into long-term debt due to lack of calculation and financial planning.  And due to debts, businessmen develop various health issues like hypertension, anxiety, blood pressure, stress, and depression.

To be happy, you don’t need a piece of finance, you need financial peace. 

You just need to know how to pay loan faster without disrupting your day-to-day functions. 

In this article, we are discussing 8 effective ways of how to clear loans faster that will help you to get rid of life’s tension.

1. List your Debt by Interest Rate

Following significant steps will help you know how to pay loan faster than usual time span:

? List all your loans along with their interest rates either in ascending or descending order.

? Do not give equal EMI in all the loans.

? Complete the loan first that has the maximum interest and pay minimum EMI of other loans.

For Example

The interest rates of different loans are: Home loan – 8.3%; Car loan – 9%; Education loan – 10%; Personal loan – 12%; Unsecured loan – 20%; Credit card loan – 32%.

As the interest rates of credit card and unsecured loans are higher than the other loans, so, first complete these two loans. Keep the payment of other loans at a minimum.

2. Pay Incremental Gain Exponential

Let us know how to pay loan faster by paying more or double EMIs on the loans whose interest rate is high and get exponential gain.

Take the following example to understand how to pay off a loan early.

Parameters
 Scenario 1
 Scenario 2
 Scenario 3
EMI 5,000 10,000 20,000
Time Taken for Closure 41 Months 13 Months 6 Months
Payment – 2 times 4 times
Benefit Nill 3 times 7 times
Total Amount Paid 2,05,000 1,30,000 1,20,000

In the above table, you can observe that if we increase the amount of EMI, then the total amount to be paid decreases. In this way, you get the exponential benefit through incremental payment.

3. Sell Unnecessary Items for at least 2 to 4 EMIs

Selling unnecessary items is another way to how to clear loans faster.

If you buy a product but not use it from last one year, then it is possible that it is your depreciating asset and useless for you. 

For example, unnecessary furniture, old mobile phones, bags, books, and apparel.

You can sell the unnecessary items on OLX and Quikr. You can take out 4-5 EMIs of your loan by selling these things.

4. Temporary Downsizing

Temporary downsizing is one of the ways to how to pay off a loan early.

An intelligent person will buy an appreciating asset while a low IQ person will buy depreciating assets or liability or unnecessary objects.

  • Identify your unnecessary monthly subscription services, depreciating assets, and non-value adding objects.
  • Control these unnecessary expenses so that you can make some extra saving, for say 30%. You can use this saving to pay your EMIs.

5. Pay Loans with the Second Income

To know how to pay off a loan early, you need to analyze the total amount of income you have.

? If you have two earning members in your family, then use the income of one member to meet the family expenses and use the income of the other member to pay off your loans.

? If you are the only earning member in your family, then you should plan additional income through part-time jobs like freelance photography, content writing, LIC agent, catering, etc.

  • Identify your passion that will help you to get an extra income.  
  • Use the additional income to pay off your loans.

6. Have an Emergency Savings Fund

You should consider the following pointers to understand how to pay loan faster:

? Maintain some emergency savings fund so that you need not take loans.

? Invest in equity and liquid debt funds that will help you to takeout funds easily.

7. Habit of Budgeting is an Extra Blessing

You need to adopt the following points to understand how to clear loans faster:

? Have a data-driven approach to your spending.

? Keep your intelligence above your emotions while spending.

? Make a budget to control your emotional spending.

Those who don’t manage their money will always work for those who do!

8. Throw any excess cash on your debt

Spend the extra money obtained from any source like tax refunds, bonuses, incentives, etc. to pay your debts.

Do not take loans in a hurry. Maintain your CIBIL score. Spend only when it is necessary.

At last, even if you know the strategy of how to pay loan faster, but you are not implementing then you are deliberately letting your loans eat all your savings and financial growth. 

Hence, implementation is the key to pay your loans off swiftly. 

Categories
Sales

How to increase sales by 10 times not 10%?

??Introduction

  • What kind of Growth are you looking for – Incremental or Exponential?
  • What kind of approach do you adopt – Sales or Consultant?
  • Do you know how to increase sales volume? 

In ’incremental growth’
, you can grow by 10% while in ’exponential growth’
, you grow by 10 times.

Through this article, we will share a few ideas on how to increase sales by 10 times by which you can too experience exponential growth in your Business.

Whether you are doing MLM sales, B2B/B2C sales, corporate sales, Institutional sales, Individual sales, direct/indirect sales or channel partnership, the principle is same and that’s what we are going to discuss.

To know how to increase sales volume, you need to first understand the difference between salesman and consultant.

Who is better ’ Salesman or Consultant?

Salesman and Consultant both are doing the same job but their approach is different.

Let’s discuss the difference between both approaches:

Salesman Consultant
A salesman comes with a product. A consultant comes with a solution.
Salesman works on his greed. A consultant works on the client’s needs.
A salesman speaks 80% and the client speaks only 20%. A consultant speaks only 20% and the client speaks 80%.

To know how to increase sales volume, you need to consider the following points:

? If you focus on your greed, then the need of the client and your greed both will not be completed.

? If you focus on the ’need of the client’, your greed will automatically complete because the need of the client is completed.

Take the approach of a consultant and not the salesman because the client does not want a product, he only wants a solution. 

Customer doesn’t want to be sold, he wants to be helped.
 

You have to work with the ’consultative approach’
. Now, what is the Consultative approach?

It means you have to act as a consultant by asking a lot of ’solution-oriented questions’ to the client.

What type of questions are these?

For such questions, you have to conduct a N.I.C.E. analysis.

Needs ’ Interest ’ Concern ’ Expectation

To know how to increase sales volume, you need to first understand N.I.C.E. analysis.

When you understand the Need, Interest, Concern, and Expectation of the client, then what you actually showcase to the client, he will buy it.

But, the problem is that you are focusing on selling the product you have brought and not focusing on the need or problem of the client.

How to Implement N.I.C.E. Analysis?

To know how to increase sales volume, you need to learn how to implement N.I.C.E. analysis.

For implementing the N.I.C.E. analysis:

  • You need to first understand what, why, when, where, and how of the client.
  • You need to find out:

       1. What is going in the life of the client?

       2. Why is it going?

       3. Since when this is going?

       4. Where and how it is going in his life?

A consultant actually identifies the ’latent need’ of the client. After that, he shows his product as a solution to his need. With this approach, the product gets sold double, triple, and quadruple times.

This leads to ’10 times sale growth’, not 10%.

How to Increase Sales by Asking the Right Questions?

Conduct N.I.C.E. analysis of the client not by speaking but hearing the client. You have to hear the client, understand him, and acknowledge him sometimes.

To know how to increase sales volume, you need to start ’parroting and paraphrasing’.

For Example

If the client says, ’I am going through various problems in my life, how I will buy, now?’ you need to say, ’Oh problems are going on, I would like to understand what problems you are facing.’

Basically, you have to ’enter in his shoes’. But, before entering in his shoes, you have to first ’take off your own shoes’.

Put aside your product and try to understand the client’s situation.

How to Ask Questions?

You can ask the client some thinking questions and current reality questions. When you ask him some questions, he will start speaking out. Then, you can ask him some vision questions and goal-oriented questions.

Understand his goal, his vision and then again ask him the current reality question.

For Example

If a client’s goal is to reach at 8/10 and he is currently at 4/10. You need to understand where the client is right now (this is the client’s assess) and what his vision is or where he wants to go (this is client’s aspire).

The gap between assess and aspire of the client is architect. You have to help the client to ’architect this gap’. Now, you become the partner of the client and you are no longer a salesman to him.

To know how to increase sales volume, you need to understand what type of questions you can ask from your customers. You can ask the following types of questions to your customers like:

  • Problem-oriented questions
  • Solution-oriented questions
  • Probing questions
  • Leading questions 

The answers to these questions will make you understand the problems of the client. During this time, when you say:

You:
  ’Oh… You are going through so many problems, you are facing these problems from so long’my lord! So, how much it is necessary for you to solve these problems?’

Client:
’It is very important for me to solve these problems.’

You:
’How much you are committed to solving these problems?’

Client:
’Very much.’

You:
’Do you want me to help you with this?’

By asking Solution Oriented Questions, you become the client’s gap partner and you can offer your product as a solution to his problems. He will immediately buy your product. 

How to Increase Sales through Consulting Approach?

In any conversation, the person who is asking questions leads the conversation and not the one who is giving answers. You will become the leader and control the complete conversation and this conversation will go in your favor only.

If you want to grow 10 times, leave the approach of a salesman and become a consultant.

Some of the sample questions you can ask are:

  • Where do you want to reach?
  • What do you want to do?
  • Which type of life do you want to live?
  • How can I help you?
  • How much committed are you to improve your life?

The three main questions that should be asked to the client are:

  • Where you are right now?
  • Where you want to go?
  • How you will go?   

You can ask these three questions in detail. You can help the client in reaching his goal by becoming his gap partner.

Categories
Motivational

How to Get Success in Life?

??Introduction

To know how to get success in life, you need to ask yourself the three questions:

  • Where are you now?
  • Where do you want to go?
  • How will you go?

If you have answers to the above three questions, you can achieve anything in your life.

Whether you are an entrepreneur, project leader, manager, or any other professional, following powerful tips to be successful in life will help you thrive in your career:

Tip #1: Know What Do You Want

It is one of the tips to be successful in life.

You should have clarity in your life. Clarity is the key to success in life. When you get the clarity, your mind is focused. Wherever mind focuses, it gets zoomed in and then you can’t see anything else.

Arnold Schwarzenegger – a first-class politician, first-class entrepreneur, great bodybuilding champion, and an actor – says, ’My rule for success is clarity. I set a goal and then I do whatever it takes to achieve it.’

Do you know, what do you want from yourself, your company, your business, and your employees in the next one year? 

Where do you want to reach in the next 2-3 years?

Once you know, then you start living life for a purpose.

You should have clarity regarding your career, personal life, and relationship.

Tip #2:  When You Stretch, You Grow

How to get success in life by stretching your limits?

You often think that you have limited potential. But, actually, you don’t know about your limits and potential.

When you stretch your limits, your limits will expand. When you stretch your expanded limits, your expanded limits will further expand. They will keep on expanding. This is because you have unlimited potential. It is another key to success in life.

Do not equate your salary to your potential. Your salary can be x but your potential can be 5000x or 100,000x. You actually don’t know because you are equating your potential with your salary.

According to the Shloka 15.7 of Bhagavad Gita:

mamaiv?n?ho j?va-loke j?va-bh?ta? san?tana?

mana?-?ha?h?h?n?ndriy??i prak?iti-sth?ni kar?hati

Lord Krishna says, “As you are my part, so, you also have unlimited potential like me. But, the problem is that your six senses and your heart will make you struggle with your existing potential. As a result, you get distracted to different things and also deviated from your purpose.”

So, Lord Krishna says, know your purpose and stretch your limits to reach your purpose.

Tip #3:  Anything that You Cannot Measure, You Cannot Improve

The key to success in life is that you should start measuring your efforts and determine what to do and when to do in order to reach your goal.

You should monitor your efforts through the schedule, tracking charts, and templates. These measurements will also help you to know how to get success in life and where improvement is required and

You have to make a scorecard to track your performance. Start measuring your efforts every day to make sure that you are on the right path to achieve your goal.

So, following the above three crucial tips to be successful in life will help you achieve whatever goal you set!

Categories
Process & Business Expansion

How to find distributors in India?

??Introduction

  • Are you a new businessman?
  • Do you want to take your product to every corner of the country?
  • Do you know how to find distributors in India?

No matter how big your business is, it is an uphill task to open your stores in every corner of the country.

A good distribution network can help your business grow rapidly and extend reach across the length and breadth of the country.

Before understanding how to find distributors in India to scale up your business, let’s first understand what are the advantages and disadvantages of the distribution network. 

Advantages of Distribution Network

Low Sales and Marketing Cost 

If you deploy your salesman and open stores all over the country, it will cost you very high, but selling through distributors will reduce your cost, and increase profitability.

Market Penetration

Strong distribution network helps you increase your reach in remotest parts of the country, where you cannot reach yourself. It increases your market reach and sales.

Trustworthy Partners

If you get trustworthy partners in the market, it helps you sell your products with more speed. You need to build a chain of distributions that is loyal to you.

Rapid Testing

Through a strong distribution network, you can test your product rapidly and bring the required changes in your product as per market demand.

Efficiency

A large network of distributors increases your speed of delivery of product in the market against your competitors.  All FMCG companies like Hindustan Unilever Limited, Coca Cola, P&G, Dabur, and Patanjali have spread all over the country so rapidly through a powerful distribution network.

Disadvantages of Distribution Network

Risk of Distributor Brand

The image of a distributor in a particular area has a high potential to affect your brands’ sale in that area.  If a distributor has a bad image then it will affect your brand adversely.

Delay in Payment

If you give a long credit period to distributors, who delay in payment on the purchase of products, then it is going to hurt your business and increase the cost of capital.

Lesser Control

Selling through distributors asserts little control over the complete sales process, as you don’t sell a product directly to a consumer, hence you have limited control over the way distributors present your products to customers.

Reduced Feedback Cycle

Since a distributor is not your employee, it is difficult to get actual customer’s feedback to understand their need and bring the required changes.  You cannot compel them to get customer’s feedback.

Increased Cost

Since you have to take care of margin of a retailer, distributor, wholesaler, and purchasing cost of the customer, many times, you are compelled to reduce your own margin, while increasing the capital cost.

How to Find Distributors?

Now with the help of following 11 tips, let’s understand how to find distributors in India:

Tip #1: Sales Representative

It is the first tip on how to find distributors.

Sales representatives work at ground level to sell your product in the market, by ’visiting door to door’.

Tip #2: Channel Sales Executive

They are responsible for ’building channel partner’ in the market for selling your product. You need to have channel sales executives in every city across the country to promote your sales among distributors. This will also help you in selling through distributors.

Tip #3: Join the Industry Association

To know how to find distributors in India, you need to understand the industry association.

In every industry, there is an association, where many big and small business persons converge at one place to work towards a common agenda.

You can also ’build a chain of distributors” through an industry association.

Tip #4: Trade Shows

It is one of the tips on how to find distributors in India.

In trade shows, vendors, distributors, wholesalers, manufacturers, consumers, exporters, importers, buyers, and suppliers of a particular industry come under one roof, where you can get ’bulk order and big manufacturing contracts.’

Tip #5: Meet the Existing Distributors

It is the fifth tip on how to find distributors in India.

Another way to extend your distribution network is to ’get the reference from existing distributors’,
who are aware of their location. It can help you to ’get a hold on the market’
without much effort.

Tip #6: Wholesalers and Distributors Website

The technology has made spotting the wholesalers and distributors easy through an online platform.

You can visit their website to build your distributor chain without extensive expenses. It will help you in selling through distributors.

Tip #7: Subject Matter Expert

Make field visits to understand which product has a high demand among distributors and retailers. You can ask the existing distributors about which product has the highest penetration in the market and make your distribution policy accordingly.

It is another tip on It is the first tip on how to find distributors in India.

Tip #8: Keep an Eye on Your Competitors

Along with building a strong distribution network, you need to understand what your competitors are doing to get an idea about their marketing strategy.

Tip #9: Use of your Website and Social Media to Generate Leads

Try to create your website and social media platform, mention the process of becoming a distributor and advantages to them, to build your strong network.

Tip #10: Meet Alliance Expert

There are many alliances /agents available in the market that can help you in building a partnership to expand your distribution network.

Tip #11: Outdoor Advertisement

Outdoor advertisement tools like posters, pamphlets, and billboards are also necessary to build your distribution network in the market. 

If you follow the given tips on how to find distributors in India, it will certainly help you grow your business as much as you want not only in India but all over the world. 

Categories
Motivational

How to become Successful in Life?

??Introduction

  • Do you want to know how to achieve success in life?

You must be thinking about how successful people became successful.

Here are the three powerful tips to be successful in life.

Tip #1: Power of Responsibility

It is one of the tips to be successful in life.

Responsibility is one thing that is never given, it is always taken.

You can’t give responsibility to someone, who is not ready to take it.

Can You? The answer is NO!

For Example

Once a girl was carrying a 12 years old disabled boy on her back and was going to Vaishno Devi.

A saint was also passing by with a heavy bag on his back.

The saint noticed that the poor girl was feeling breathless but she was still moving ahead.

The saint said to the girl:

’Daughter, you might have tired. You are carrying a heavy load on your back.’

To this poor girl replied:

’Baba, load to aapne uthaya hai, Mai to apne bhai ko Darshan Karwane le ja rahi hu.’

Baba was speechless hearing the answer of the poor girl.

So, the Moral is; Responsibility can never be given, It is only taken.

Responsibility, if given, becomes a load.

Responsibility, if taken, can accelerate your progress in life.

Lord Krishna also said, ’sarvatr, sarvada, sarvsthasu.’

Sarvatr means everywhere, Sarvada means every time/always, and Sarvsthasu means in any circumstances.

So, Krishna said that the person, who takes responsibility, gets success everywhere, always, and in any circumstances.

Tip #2: Gratitude Journal
 

How to become successful by adopting the Gratitude Journal in your life?

Every night before going to bed, you should write a gratitude journal.

It should include what is the good thing that happens today in your life.

Is everything around your waste or important?

You need to find out this.

The person who sees waste in everything, his/her behavior also becomes like that. Their thought also becomes wasteful.

On the other hand, the person who finds everything important around them, their behavior and thoughts also become important. Such people grow very fast because they have a relaxed mind. Happiness and prosperity come to these people automatically.

So, before going to bed, write at least the name of five people whom you are grateful to thankful.

It is said ’Either you are Grateful or Great Fool’ if you feel thankful, you will grow. 

Tip #3: Life is the Result of Choices

It is also one of the tips to be successful in life. 

What type of thoughts do you choose in your life?

Which type of behavior do you select in your life?

You have the ability to make the choice. But, you blame the circumstances, instead of bringing change in your mindset.

To understand how to achieve success in life, you need not depend on others to make a selection. 

If you are not ready to bring change in your life, then nobody else can do this.

There is a saying, I invested my whole life in changing the circumstances, the day I changed my mindset, circumstances changed automatically.

You will face various problems in your life, it will depend on you whether you want to give up or get up. This decision needs to be taken by you and nobody else.

You want to learn or you want to blame, this is your choice. In odd circumstances, some people blame the circumstances while others learn from it.

Do you find life as a puzzle or a problem?

If you take it as a puzzle, you can solve it. But, if you think it as a problem, then it will become a bigger problem.

Your choices make your values; your values build your thoughts

Your thoughts form your behavior; your behavior forms your ethics

Your ethics bring you publicity and your publicity helps you to do business

From the above-given tips to be successful in life, you have to learn to make better choices in your life in order to get guaranteed success.

Categories
Process & Business Expansion

Grow Your Business by Using Fly Light Model

??Introduction

  • Do your business work on the Fly Light Model?
  • Are you planning to scale up your business across the globe? 

Gone are the days when a business needed very huge capital investment to become a conglomerate. The technology has defied all myths and misconception regarding business. 

Today, all global tech or non-tech giants are running their business on the fly light model without investing too much on capital. 

What is Fly Light Model?

If you put 2 kg weight on a kite, it will not fly high, instead, the more you make it light the higher it will fly. 

A business has to be built on a fly light model to make it fly high.

Some companies who have adopted the Fly Light Model are as follows:

WhatsApp:

It is a fly light business model that WhatsApp has become the world’s largest internet-based messaging service, without having a single server of its own. It uses people’s mobile as their server. With only 200 employees, they expanded their business all over the world and increased profit drastically, without investing too much.

Uber:

Uber became the world’s largest taxi service, without having a single taxi on their own name. This is also an example of a fly light business model.

Uber did not spend a huge amount of capital on purchase on assets. What they did do, was connecting customers with the customer (C2C) through an online platform. 

Alibaba:
 

By adopting the fly light business model, Alibaba does become the world’s most valuable retailer, without having even a single inventory on its own name. 

In this kind of business model, owners don’t have to make a heavy investment in the capital; instead, they have to invest in operational expenditure on frequent intervals, which automatically increases profitability.

 

It automatically increases the return on investment of promoter and investor, since capital expend is extremely low. 

Benefits of Fly Light Model

1. High return on Asset

The fly light model gives you a high return on assets as you don’t need to spend huge capital for expanding your business. 

At the same cost of capital, you can scale up your business across every corner of the world, which automatically increases your return.

2. Controlled Profit Fluctuation

In the world of ever-evolving technology, keeping profitability constantly increasing is as difficult as never before. In just the last few decades, technology left much business out of business.  

For Example:

Postman was replaced by telegram, telegram by courier, a courier by Email, Email by social media and now Social media is being replaced by WhatsApp.

Fly high business model is the kind of business in which, you don’t need to invest high capital, and hence you don’t suffer heavy losses abruptly. 

3. Scalability Driven Cost

In the traditional business model, every business needs a heavy cost for its expansion. But in this business model, your cost doesn’t increase, no matter how much you scale it up.  But despite the low cost, your profitability will go on increasing. 

Examples of Fly Light Model
 

1. Franchise

The franchise is the fastest and easiest model to do business for Franchisor and Franchisee. It works on the fly light business model as it reduces their burden on capital expenditure by distributing it between Franchisor and Franchisee. 

  • Here, a big Franchisor doesn’t need to invest more capital to set up a new unit, whereas a small Franchisee doesn’t need to invest heavily on sales, marketing, proprietary tools, training/learning, and development operational expertise of intelligence. 
  • A Franchisee gets trademark, system, signage, software for the fee to get started.
  • A Franchisor gives training to manpower, corporate strategies, sales, marketing, branding support to Franchisee and in return, they get a licensing fee, monthly royalty as a profit. Few models of Franchising are:

Pizza Hut | Domino’s| Subway | McDonald’s

For Example:

Notably, India’s biggest iron rod producer Kamdhenu Group has come on this model. With a chain of 10,000 dealers and distributors, it has given 70 franchisees across the country for producing iron rod. In return, they give them technology, marketing support, distribution, and dealer support.

2. Outsourcing

It is based on fly light model where you reduce your cost of capital and build operational efficiency by shifting your task to an external party. 

For Example:

Apple is the world’s most premium mobile brand though it doesn’t make mobile on their own. 

Apple has outsourced its manufacturing part to Foxconn in China and focused its all resources on designing, R&D, marketing and sales. Hence it has reduced their high cost on manufacturing and increased scalability.

 

3. Asset Sharing Model

Asset sharing model is also one of the types of fly light model.

In the asset sharing model, two or more companies come together to share the cost of a high valued asset to reduce their expenses.  Many big infrastructures like oil and gas companies work on this model where the purchase of an expensive asset is needed. 

It is called the optimization of capital cost, risk diversity, and division of Capital cost. 

For Example:
 

OYO began their business on asset sharing model by sharing the property with property owners without investing heavily on buying a property. It reduced their cost and increased profitability significantly.

 

4. Pay-Per-Use: Co-sharing/Co-working Space

In the traditional business model, if your company wants to open small offices in 5 different cities of the country, then you will have to invest heavily in establishing each office.  

But Pay-Per-Use, a booming form of fly light business model, has made it very easy to set up your office without spending too much. This is the concept of co-sharing/co-working office spaces on pay-per-use, where you pay rent as per usage. 

In this model, you have to share common pantry, internet, printer, meeting room, washroom, and stationery. 

5. Licensing-In & Licensing-Out

It is also one of the forms of fly light model.

Many pharmaceutical companies, in order to save their cost of R&D and brand development, license-in and license-out their products to other manufacturers. 

License-in:
In this, a big company gets a license to sell products of another company. Here a company focuses on manufacturing, sales & marketing. 

Licensing-out:
In this, a company gives license to other companies to manufacture its products. Here a company focuses on R&D and brand development.

Categories
Strategy

5 Steps for Effective Strategy Implementation and Execution

5 Steps for Effective Strategy Implementation and Execution

Introduction

  • Do your strategies often fails?
  • Do you want to know how to implement a strategy successfully?

Organizations create strategies but due to a lack of proper knowledge of strategy implementation and execution process they are not able to execute them properly and as a result, their strategies fail.

In this article, we will discuss how to implement a strategy successfully through 5 simple steps of the strategy implementation process.

Step 1 – Unique, Clear and Distinct

It is the first step of the strategy implementation process.

For strategy Implementation and execution, you need to:

✅ Create a tough, bold, and distinct set of choices in your organization.

✅ Create such a unique and clear set of choices that it becomes easy to present your organization distinctly.

Step 2 – Strategic Positioning

The uniqueness of your organization should be positioned strategically. It is the second step of the strategy implementation process.

❌ Do not make a product that sells well in the market.

✅ Make a problem-solving product that solves the problem of your customer.

✅ Make a product after identifying the need of your customers.

As an entrepreneur or CEO, Step 1 and Step 2 are your responsibilities. So, you need to perform them on your own end effectively.

Step 3 – Incentivize the Behavior with Emotional Value and Financial Value

Even if you have made the strategy for positioning but your employees and management are not ready yet. So, you need to incentivize their behavior. It is the third step of the strategy implementation process.

You need to provide the following types of incentives to your employees and management:

Emotional Incentive

✅ Take emotional commitment from the employees for implementing the strategy.

✅ Tell employees how this strategy will be beneficial for them and the company.

Financial Incentive

✅ Provide financial incentives to the employees for the work they do to implement the strategy.

When you and your team come together, the execution will be easy.

Step 4 – Identify the Skill Deficit, Knowledge Deficit, and Execution Deficit

If employees want to help you in strategy implementation and execution but they do not have the required skills or they do not know what should they do and how to do, then it is impossible to execute your strategy.

In such a case, you need to:

  • Identify the different types of deficits of your employees like skill, knowledge, and execution.
  • Become the gap partner of your employees to help them to fill their deficits.
  • Train, inspire or engage your existing employees.
  • Bring new skilled manpower to implement the strategy.

Step 5 – Flexibility is the Solution for Frequent Barriers

✅ Make your frameworks and working style flexible.

The framework is necessary for execution. Without frameworks of strategy implementation and execution, you cannot be successful.

There are two types of frameworks –

  • Standard Framework
  • Creative framework

Once you know the standard frameworks, you are able to make your own framework, which will be customized according to the current situation or problem.

When CEOs or entrepreneurs start making their own customized frameworks, they provide these frameworks to their juniors and juniors just need to enforce the devised strategy implementation process to let your company start growing.

Categories
Strategy

Are You Failing to Implement Strategy Execution Process?

Are You Failing to Implement Strategy Execution Process?

Introduction

  • Do you want to know strategy implementation process?
  • Do you want to know what strategy execution framework is?

Many businesses fail in their initial years despite the excellent strategy execution process and years of experience. Do you know why?

It is because of the lack of appropriate strategy execution framework.

Many businesses fail because they fail to execute their strategy.

Strategy does not give big Success, Execution does.

The day you understand this, you will see your business growing.

Here is how you can execute your strategy through 4 important strategy execution frameworks.

If you adopt these 4 steps in any department, the efficiency of that department will increase.

It does not matter whether you are the first mover or the last mover. You will become a fast mover. Here, are those four steps:

Step #1: MEG (Most Essential Goal)

Among the most important tools of the strategy execution process is MEG (Most Essential Goal).

MEG is a goal for which you are ready to compromise everything else and focuses on it only is called Most Essential Goal (MEG).

Focus on What Matters the Most!

If you do everything but miss your most essential goal, you will fail.

If you miss everything else and focus on your MEG, you will get successful.

So, you need to identify the MEG of your department, division or organization that you want to execute.

Step #2: Effort Score and Result Score

Without matching your Effort Score with Result you cannot implement the strategy execution process effectively in your business.

If you want to achieve a goal, separate your Effort Score and Result Score.

While achieving any goal, determine what effort will it take and what result/outcome is expected.

Step #3: Scoreboard
Until you make a scoreboard, people will not feel excited and your strategy implementation process will fail drastically.

People play differently when they have a scoreboard.

Actually, people want to win and you should help them win by making a scoreboard.

When you encourage people, they will take scoreboard as a game and will try to win. As a result, their speed will increase.

Increasing the speed of the department will help you control the numbers, figures, and targets.

Now, you can engage people easily.

Let’s move on to Step 4!

Step #4: Weekly Review Meeting

Conduct weekly review meetings with your team so as to improve their performance, and implement the strategy execution process efficiently.

When people with a shared vision sit together to discuss areas of mutual concerns, it sparks creativity and helps them achieve the Most Essential Goal.

Categories
HR & People Management

How to increase employees performance?

Introduction

  • Are your employees not feeling motivated to achieve the organizational goals?
  • Do you want to know how to increase employee performance?

Employees’ performance directly affects the growth of an organization. If your employees are not motivated enough to perform, then be sure your organizational goals will take a backseat.

How to sort this out?

To understand how to increase employee productivity, let us first understand the quadrants given below.

Quadrant #3: Managing

It is said that when you are managing your employees, you are only damaging your employees. This will not help you to increase employee productivity.

For Example

If you continuously scold employees about their mistakes, it will reduce their inspiration and motivation. They will stop taking initiatives and responsibilities.

Telling employees about their problems, again and again, will only make the problem bigger instead of solving it.

✅ Managing is only required when there are Disciplinary Issues. Only in this case, you can increase employee performance.

Quadrant #4: Mentoring

Mentoring is required when an employee has a Skill Deficit Issue. This will help you to increase employee productivity.

✅ It is mostly required by new employees as they do not know what to do and how to do.

✅ Identify the skill gap in your employees and train them by becoming their skill partner.

❌ Never give mentoring to an employee who already has the skill to perform his work; this will only damage your relationships with them. His motivation will also go down.

Let us understand this with the help of an example.

If somebody already knows how to play the harmonium and you keep on telling him how to play it, it will only damage your relationship with them.

Quadrant #1: Counseling

Counseling is about asking questions to employees about their problems. It will help you to understand your employees, which will gradually enable you to increase employee efficiency.

For Example

If an employee is coming constantly late to office, then instead of telling him (managing) that he is late, ask him (coaching) why he is late.

Probably, he might be facing some real issues in reaching to the office.

If you ask him, he will be encouraged to speak and both of you mutually find out the solution to the problem.

This will increase his trust in you and he will work hard for you. It will increase employee efficiency.

When you ask employees about their problems, it is inside out and when you tell them about their problems, it is outside in.

Inside out will create inspiration while outside in will kill his inspiration

Quadrant #2: Coaching

Coaching is a process of asking solution-oriented questions to employees like – What are your ideas? What are your top three ideas to remove the defects? What your experience talks about it?

✅ Coach the employees by increasing their willingness and asking them about the solutions.

✅ Ask them about their knowledge and experience.

If an employee is giving a solution, then he will commit more because it is not your solution, it is his solution.

There is already a buy-in that is created in him and now, it is easy for you to increase his willingness.

It will also increase employee performance, accountability, ownership, initiative, and responsibility towards you and your company.

Quadrant 1 (Managing) – gives 0/100 results, Quadrant 2 (Monitoring) – gives 33/100 results, Quadrant 3 (Counseling) – gives 66/100 results and Quadrant 4 (Coaching) – gives 100/100 results.

Now as you know coaching is the best way how to increase employees’ performance, you can improve their productivity and grow your business seamlessly through above-given quadrants.