Here are examples of situations that may be negatively impacting a client’s score in each of the 8 value drivers, along with some potential opportunities for improvement.
THE SWITZERLAND STRUCTURE
CLIENT SITUATION - Too much customer concentration
OPPORTUNITY
- Consider dropping low margin products/services
- Consider hiring salespeople to build a customer base
CLIENT SITUATION - Overly dependent on a single supplier
OPPORTUNITY
- Consider creating a “bench” of back up suppliers
CLIENT SITUATION - Overly dependent on a single employee
OPPORTUNITY
- Consider cross-training employees in key roles
- Consider documenting processes so others can follow a system
FINANCIAL PERFORMANCE
CLIENT SITUATION - Business is generating less than $10 million in annual sales
OPPORTUNITY
- Consider ways to grow top-line revenue to above $10 million
- Consider acquiring a business
CLIENT SITUATION - EBITDA profit margin is less than 20%
OPPORTUNITY
- Consider focusing on product and service lines where you have maximum pricing authority i.e., can charge the best margins
- Consider scrutinizing costs to trim the fat where possible
CLIENT SITUATION - Bookkeeping is done in house or informally
OPPORTUNITY
- Consider ways to professionalize financial record keeping
- Consider an audit
GROWTH POTENTIAL
CLIENT SITUATION - Business is growing revenue at a rate of less than 20% per year
OPPORTUNITY
- Consider cross-selling additional products to your existing customers
- Consider entering new geographic markets
- Consider acquiring a business
- Consider targeting other demographic segments
THE VALUATION TEETER TOTTER
CLIENT SITUATION - Business is struggling for cash flow
OPPORTUNITY
- Consider charging more upfront
- Consider a subscription or membership model where customers pay upfront
- Consider slowing payment terms by 15 days
- Consider strategic ways to use credit cards
RECURRING REVENUE
CLIENT SITUATION - The customer has no recurring revenue
OPPORTUNITY
- Consider adopting one of the 9 subscription models for recurring revenue
CLIENT SITUATION - Customer’s churn rate is too high
OPPORTUNITY
- Consider tweaking the product offering to maximize retention
- Consider improving the 90-day onboarding window
MONOPOLY CONTROL
CLIENT SITUATION -The customer has no meaningful point of differentiation
OPPORTUNITY
- Consider surveying your customers and asking them why they buy from you
- Consider finding one, consistent and meaningful point of differentiation to emphasize in all customer-facing communications channels
CUSTOMER SCORE
CLIENT SITUATION - The client does not survey his/her customers
OPPORTUNITY
- Consider leveraging the Net Promoter Score survey
CLIENT SITUATION - Customer’s Net Promoter Score is below 15%
OPPORTUNITY
- Consider acting on the verbatim responses provided by the Detractors (scored 0-6 on the NPS survey).
HUB & SPOKE
CLIENT SITUATION - The client has no time and is being spread thin
OPPORTUNITY
- Consider writing instructions or designing a process to minimize your personal involvement in certain tasks
- Consider technology you could invest in to automate processes that require your attention today
- Consider taking a few days off to see where the business is most dependent on you personally