If you are responsible for service revenue and profit and suffer from declining service revenue, how badly are you screwed? That depends on two questions…
- How long have the revenue and profit been declining?
- Over that time, how much have they declined?
If the answer to question 1 is just a few months, and the answer to question 2 is a few percent, then you can take action and turn things around relatively quickly. And if the answers are on the other end of the spectrum, i.e., a long time and a lot of money, then it may be time to update your LinkedIn profile.
According to a recent HBR blog, operational meltdowns are more common and disastrous at mid-sized firms than small companies because they take much longer to notice and resolve. And when they are noticed, the company may not have the right team to design and implement a turnaround strategy. But that doesn’t have to happen to you.
Getting back on track is a 4-step process:
- Determine the presence of the problem
- Identify the problem
- Determine the root cause of the problem
- Fix the problem
Step 1 – Do I have a problem? How big is it? Do I know where to start?
Step 2 – What are my unique customer segments? How is each segment performing today? If there is a change, when did it start?
Step 3 – Do I have any idea why a segment is underperforming? Do I know someone who can talk to my customers and get good answers to important questions? Can he analyze the answers and point me to my customer’s issues?
Step 4 – What corrective actions are necessary? Which are the highest priority actions? Do I have enough information to develop an action plan? Do I have the available resources to implement my highest-priority changes? Does my organization have a culture of experimenting with “failing quickly”? Do we reward efforts that either succeed or create a new piece of important information?
Of course, there are many challenges in scaling up a local experiment and implementing it into your complete customer base. This will take lots of planning, internal selling, and then a well-coordinated rollout plan with focused communications to internal and external stakeholders. Has your current organization succeeded in similar efforts? Do they have the time and energy to tackle another one now?
If you have a declining revenue base or need to increase your current level of service income, and cannot answer most of these questions, contact Sam and start getting back on the revenue growth path.