John Warrillow | The Value Builder System
- Department: Management
Overview
Narrowing your focus on only 1 or 2 products or services, instead of being a Jack of all trades, will make you referable and help you scale your business.
The system below represents the scalability track – a process that identifies which products or services you are selling today, are the foundation to scale. You can use the same process for different customer segments, in order to get to a higher level.
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System Architect: John Warrillow
Website: www.builttosell.com
Generated as part of the www.BusinessSystemsSummit.com
Video
The Process
Step 1: List all of the products or services that you offer today.
- If you are in the products business, just write your SKUs or product categories.
- The list should consist of 10-20 items.
Step 2: Score each product or service from 1 to 10 against each of these 3 criteria:
- How Teachable they are to employees?
- In order to escape the owner’s trap, you must get your employees to do the work. You need products that you can teach your employees to either deliver and/or sell.
- Products or services that are complex, that require the owner personally to get involved in the delivery or the sale, will score low.
- Products or services that employees can deliver and/or sell on their own will score very high.
- How Valuable is this product or service in the eyes of the customers?
- Sometimes it is easier to think in terms of what is the opposite of value. The opposite of value is a commodity, and if you sell a product that is a commodity, it will score very low.
- If you have a really unique product or service, with a good margin, and customers really value it coming from you, and it differentiates you from the rest, it will score very high.
- How Repeatable is the customer purchase cadence of this product or service?
- Products or services which are one-time purchased like wedding rings will score low.
- Products or services which have some sort of predictable purchase cadence, a recurring pattern (e.g. toothpaste which we buy regularly) score high.
Step 3: Stack ranks the products or services from highest to lowest.
- Sum up the scores for each product or service, and stack rank them based on the total scores, from highest to lowest.
Step 4: Get rid of the product or service that scored the lowest.
- The lowest-scoring product is most personally dependent on the owner.
- Getting rid of a product or service could mean exiting in different ways – by selling the line if it is big enough, by licensing agreement or partnership agreement.
- Once you made up the revenue you were losing as a result of getting rid of that product or service, move to the next one at the bottom of the list and get rid of it.
- Repeat this step until you have only your top products or services on your list.
- Use the time you freed up to build systems and processes for the key products or services.
- Making the products or services deliverable without the owner will make the business much more scalable.
- Note! Keep in mind that what is Teachable to your employees is often competing with what is Valuable in the eyes of your customers.
- Going through this process, you may find that you can create a collection of teachable products or services that are in a collective more valuable in the eyes of the customers.