Simple Tips To Reduce Errors

As business owners we know the cost of mistakes but beyond the actual cost of the error, there is the damage to our reputation that repeated mistakes will do. The value of systemising your business cannot be underestimated when it comes to contemplating the reduction in errors. However, systemisation is not a 100% guarantee that your business will be error free. While systems offer some degree of comfort, “error free” is a matter of vigilance, checking and care. Errors happen – it is a simple fact when the “human factor” is involved. However, in business, errors cost money and careless errors can also cost us our reputation and your client’s future business. To eliminate errors, we need to consider how they arise. We have grouped these into Policy – Procedure – People:

  1. Policy“: Is about errors arising from why actions are taken, for example: misinterpretation of rules or of legislation or other guidelines. These errors can have a significant impact and while the action itself may be correct, the reasoning behind it is flawed
  2. Procedure“: Is about errors that have arisen due to how actions are completed, for example: following a procedure or checklist
  3. People“: Is about any errors that have arisen because of what was done by the person completing them. These could include errors from oversight, omission or carelessness

It is common, when finding an error, for a manager to immediately look at the “People” aspect of the error. It’s the most common place for problems, has the greatest degree of risk and is the area that is the least consistent in your business. It’s a case of 3-2-1 problem solved! In fact, one of the simplest ways to reduce errors is to turn this approach on its head. Instead of looking first to who made the error, start by asking why the action was taken. This technique has taught us many lessons:

  • The right actions taken for the wrong reason highlight a gap in training and illustrate that we have not appropriately matched the person to the job. “Policy” type errors can be prevented by improving knowledge, education and conducting skilled based training on the job
  • Following the right procedure and ending up with an error highlights an out of date, redundant or flawed procedure or checklist. While a staff member offering “But I followed the process” will often raise red flags, in a transformed and systemised business, this should sound alarms, rather than be alarming. “Procedure” type errors can be prevented by regularly reviewing and updating procedures, conducting training with staff and maintaining a robust compliance regime
  • Once you have eliminated Policy and Procedure as the cause of the error, you can now consider the People aspect. People based errors can be the result of a multitude of issues, but by looking at what was done (rather than who did it) you can begin to identify gaps in training, recruitment and even in processes and checklists. In our experience, training, skills/experience, application and aptitude are at the core of People based errors

Unfortunately, none of these measures will address the impact on the client as a result of an error being made. While they will assist you in uncovering the cause of the error, effectively reducing errors is more about prevention than reactive treatment. In other words, you need to work ON your business to eliminate likely, potential and actual sources of errors in order to reduce their frequency.

Get in touch and ask us to conduct a FREE Business Evaluation Meeting and find out about our unique way of designing and implementing strategies to generate sustainable business improvement.

Track, Conversion & Measure

To really know the success of your business you should track its health. To do this you need three sets of information. This could be done for a website or for face to face sales. You will need:

  • Your sales figures
  • Your subscriber and customer statistics (from your website or sales forms)
  • Usage details from your website or records

The most important statistics that you should track and measure are your conversion rates. A conversion rate will measure how successfully you are achieving your goals, such as converting potential customers into buyers or converting first-time buyers into repeat customers. There ill more than likely be several conversion rates that you need to focus on however the below formulas will get you started.

1. How many visitors are you converting into customers? Your potential customer to buyer conversion rate is one of the easiest stats to calculate. This is also one of the most powerful for your business. This formula will give you an indication of how effectively you are winning over your potential customers to buy from you.

Calculation : Divide your total number of sales by the number of visitors to your business or website then multiply by 100. For example, if you have 4,000 visitors a month (to your business or website) and 280 of them purchase from you making them a customer, then your conversion rate is 7%.

2. How Many Visitors Are Signing To Be A Subscriber? This may mean that your potential customer/visitor has signed up to be on your database to receive your monthly newsletter or business promotional offers via your website or direct mail. This is the visitor-to-subscriber conversion rate which will tell you how appealing your subscription offer is. You should keep an eye on this figure as you test and trial different promotions or written copy for your sign-up form or sign-up procedure.

Calculation: Divide the total number of subscribers you have by the total number of visitors to your business or site then multiply by 100. For example, if you get 1,500 new visitors to your site in a week and 700 of them subscribe to your free newsletter, then your conversion rate is 46%.

3. How Many Of Your Subscribers Are Becoming Customers? Your subscriber-to-customer conversion rate is a positive test of how effective your newsletter or other piece of sales material is.

Calculation : Divide the total number of people who purchased something from you by the total number of subscribers to your newsletter then multiply by 100. For example, 105 of your 700 subscribers buy something from you, then your subscriber to customer conversion rate is 15%.

4. How Much Revenue Are You Making From Each Visitor? This statistic will show you how much you are earning from your average visitor to your business or website. This is a valuable statistic as the number will help you to determine how much you can spend to obtain a new visitor or potential customer while still earning a profit. This could be calculated over a month, quarter or a year, depending on how soon you want the figures.

Calculation : Divide the total amount of your sales by the total number of visitors to your business or website. For example, if you sold £12,000 worth of inventory this month and you had 35,000 visitors to your business or website, then your sales per visitor is about £0.34.

5. How many people are responding to what you want them to? This statistic is the response percentage of people who read your newsletter or direct mail piece either posted or on the website and go straight to the order form. In web terms this is the click through rate from your email newsletter to your order form. Same principle applies for posting of direct mail.

Calculation: Postage/Direct Mail Divide the total number of people who respond to Newsletter A by the total number of visitors to your business then multiply by 100. For example you have 4,000 potential customers and 420 respond to your mail via the order form, then your Newsletter has a response rate of 10.5%. Internet Divide the total number of clicks on link X by the total number of visitors to the page with link X then multiply by 100. For example, if you have 4,000 visitors to your emailed newsletter and 420 click on the link to your order form, then your newsletter has a click-through rate of 10.5%. All of these calculations are important for you to understand how your potential and existing customers are reacting to your business and sales promotions.

Get in touch and ask us to conduct a FREE Business Evaluation Meeting and find out about our unique way of designing and implementing strategies to generate sustainable business improvement.

Written Guarantee

Stand out from the crowds and offer something to your customers that either your competitors can’t or haven’t thought of yet.

Most products and services have a guarantee statement and offer something that others don’t, enhancing the possibility of customers purchasing from you in return, for example:

  • Money Back Guarantee
  • Pain Free Hair Removal
  • 90 day risk free
  • See results within 7 days
  • 100% officially licensed with an authentic guarantee
  • No more to pay
  • On time, every time
  • Helping you to communicate with the world
  • Prints within an hour
  • 24 hours, 7 days a week

A famous example of a written guarantee is regularly marketed by dish washing detergents. One company came up with the original marketing idea of promoting that their detergent could remove hardened food and tough grease from the dishes. Although all dish washing liquids potentially did the same thing, no one else had yet thought of the concept which in turn helped to lift sales immensely and their competitors soon followed suit. The same marketing concepts have been implemented into stain removal and cleanliness of clothes. Powders, softeners and whiteners are all fighting for position and offering special enzymes, oxygen particles, etc to make their product better, more advanced and to receive higher sales than their opposition. A written guarantee can help you to convert a lead into a sale as you are offering something unique, of value and important to the customer.

Get in touch and ask us to conduct a FREE Business Evaluation Meeting and find out about our unique way of designing and implementing strategies to generate sustainable business improvement.

Improving Systems

Always try to find better ways of doing things. If you are able to cut down a process because it is going to save you time or it is going to make the process more efficient then do it.

Remember that improving means that there is a better way of doing them and hence you don’t want to reverse that by implementing something that is far more complex and time consuming than the old way. Without contradicting this, it is important to realise that just because you have been doing same thing the same way for ten years doesn’t mean that that is the most practical or efficient method.

Improving your systems may include manual processes as well as automated or computerised ones, so be sure to broaden your horizons, look at all possibilities and alternatives for improving rather than suspecting that it is one particular area and assuming this needs to be fixed.

Eliminating old documents or obsolete items will assist you in being better organised and have healthier processes, because people won’t revert back to or use things that don’t apply any longer.

Improving your systems will help you to be more competitive, service your customers better, have a better turn around time, be more productive, be more efficient and have a more organised business.

Once a year it is an ideal situation to gather your staff and brainstorm items that should be reviewed, systems that need to improved and things that are now obsolete or should be discarded.

When you decide to improve a system be sure to study how the work currently flows and if there are any glitches, problems, hesitations or areas that hold up the flow. Identifying these things will help you to decide on preventative action and strategies to reduce the inconsistency.

Efficiency is doing things right, effectiveness is doing the right things!

Reducing errors in your business

Errors happen – it is a simple fact when the “human factor” is involved. However, in business, errors cost money and careless errors can also cost the business it’s reputation and our client’s future business.

To eliminate errors, we need to consider how they arise. We have grouped these into Policy – Procedure – People:

  1. “Policy” is about errors arising from why actions are taken, for example: misinterpretation guidelines. These errors can have a significant impact and while the action itself may be correct, the reasoning behind it is flawed
  2. “Procedure” is about errors that have arisen due to how actions are completed, for example: following a procedure or checklist
  3. “People” is about any errors that have arisen because of what was done by the person completing them. These could include errors from oversight, omission or carelessness.

It is common, when finding an error, for a manager to immediately look at the “People” aspect of the error. It’s the most common place for problems, has the greatest degree of risk and is the area that is the least consistent in your business. It’s a case of 3-2-1 problem solved!

In fact, one of the simplest ways to reduce errors is to turn this approach on its head. Instead of looking first to who made the error, start by asking why the action was taken. This technique teaches us many lessons:

  • The right actions taken for the wrong reason highlight a gap in training and illustrate that we have not appropriately matched the person to the job. “Policy” type errors can be prevented by improving knowledge, education and conducting skilled based training on the job
  • Following the right procedure and ending up with an error highlights an out of date, redundant or flawed procedure or checklist. While a staff member offering “But I followed the process” will often raise red flags, in a transformed and systemised business, this should sound alarms, rather than be alarming. “Procedure” type errors can be prevented by regularly reviewing and updating procedures, conducting training with staff and maintaining a robust compliance regime
  • Once you have eliminated Policy and Procedure as the cause of the error, you can now consider the People aspect. People based errors can be the result of a multitude of issues, but by looking at what was done (rather than who did it) you can begin to identify gaps in training, recruitment and even in processes and checklists. In our experience, training, skills/experience, application and aptitude are at the core of People based errors.

Unfortunately, none of these measures will address the impact on the client as a result of an error being made. While they will assist you in uncovering the cause of the error, effectively reducing errors is more about prevention than reactive treatment. In other words, you need to work ON your business to eliminate likely, potential and actual sources of errors in order to reduce their frequency.