Many Southern California residents are Lakers fans, and we know that this year they are not faring so well in the NBA standings. Currently they are 20th out of 30 teams in points per game, even falling far behind the Clippers who are currently ranked 6th. This is clearly disappointing for Lakers fans everywhere.
Let’s take a look at their performance. They are currently scoring on 75% of their free throws, 79% of their field goals and 31% of their three point shots. If you put all of that together with a bunch of other basketball data, you learn that the Lakers are averaging 94 points per game. Now, let us assume that each of those categories increased by 1%, meaning they hit 76% of their free throws, 80% of their field goals and 32% of their three point shots. By increasing their shooting accuracy by 1% they would average 95.5 points per game, propelling them from 20th in the league to 13th in the league. So a small increase in several different categories has a big impact on their results.
How does all of this translate to business? One of the reasons a business exists is to create profit – otherwise they would be non-profits. How could several small, but clearly achievable, changes in your business positively affect your bottom line? What if you could increase the effectiveness of your marketing by 1%, increase your average sale to each customer by 1%, and decrease your operating expenses by 1%? Well, that’s simple – it would be a 3% change, right? No so quick! Depending on the business you are in and the revenue and cost structure you have in place, those three small changes could have a sizeable impact on your profit. Over the next few days, consider how you could increase your marketing effectiveness by 1%, increase your average revenue per transaction by 1% and decreases your expenses by 1%, and how much that would impact your profits.