I recently re-read The E Myth by Michael Gerber.

Like a lot of these business guru books, it has its fans and its detractors.

Im somewhere in the middle, I think its definitely worth a read, but I wouldnt set my watch by it.

For those whove never heard of the book, its main gist is that most business owners arent entrepreneurs, theyre technicians; they believe that, because they understand how to do the technical work of the business, they know how to build a business that does that technical work.

So, if they are a web designer, they know how to do the technical side of their business (in this example, web design), but they dont know how to build and manage a business.

Its a simple idea, but an insightful one and something thats hard to argue against.

Another idea that particularly grabbed me when I was re-reading the book was what Gerber called the 3 essential components of the business development process.

These are:

Innovation: creating a new way to do business. Doing business in a way that touches the heart of your customer, your employee, your supplier and your lender.

Quantification: did it work, how well/much did it work?

Orchestration: the elimination of discretion and choice. Provide your people with a system that creates predictable results.

In a sales and marketing context, this is the same as whats called testing.

If youre in business, youve probably got some processes (or systems) that bring in clients.

These processes can be:

active (for example advertising or telemarketing)

or

passive (clients coming back to do more business without being asked or word of mouth referrals you did nothing to encourage)

Either way, theyre processes and can be measured.

For example, if you track where your business comes from, you might find that you typically get 10 clients a month from word-of-mouth referrals.

You might find that you get 12 enquiries from an ad you run in the local paper. And 14 from your website.

Once you identify each source of business and know how many enquiries and sales youre getting from it, youve got whats called in the direct marketing business a control.

That is, a marketing system that can be relied on to produce a certain return (subject to statistical variance).

Now, once you know your current return, you can go to the Innovation stage and try doing it differently.

For example, if your newspaper ad is producing 12 enquiries a month, try changing the headline.

A strong headline is essential to your ad. Studies have shown that 80% of readers only read the headline. The world famous direct marketing expert Ted Nicholas even went as far as saying, when writing an ad, 50 to 80% of your time should be spent on the headline.

However, you may be (like most businesses) just using your company name as the headline.

Other things you can test in an ad that can make a huge difference are guarantees and having a PS (adding a PS can often double response as many readers shoot straight down to the end of the ad).

But ads are just one thing you can test.

You can test:

asking for referrals (if you dont already)
asking for referrals differently
point-of-sale offers
the way you answer the phone
different telemarketing scripts
different wording on your website
different graphics on your website
different offers to your client base
what you say to people when they come into your shop (by the way, can I help you, usually performs very badly someday Ill tell you the reason why)

These tests, done properly, will show you which is better: your control (the old way of doing it) or the new way.

If the new way is better, it becomes the new control (your new way of doing things) and youve just made your business more profitable.

If not, you back to the control.

This is a process that you can use to continually improve all you marketing. Every month you can pick two or three things to test. Maybe one month its the headline on your homepage, a point-of-sale offer and the guarantee in an email offer.

These tests will probably give you at least one thing that makes your business more profitable. You keep the winners and ditch the losers.

Next month, you test three different things. All the while trying to find a more profitable approach.

If you make a commitment to do this month after month and if you rigorously track which part of your marketing your business is coming from - youll soon find that these numerous small improvements have combined to cause a significant increase in your profits.

Best wishes

Steve Gibson