Business Struggling? You’re Trying To Solve The Wrong Problem…
For those of you who aren’t familiar with Dan he’s a successful guy, having started, bought, sold and grown multiple businesses over the last decade, as well as help countless others to do the same.
Basically he knows his sh*t when it comes to growing a business.
He’s also a pretty sharp dresser, and a good sport as you can see below when he humoured my random request to steal his waistcoat at his event last December.
I’d actually already written this post before the workshop, but I’ve bumped it up due to the fact that this principle, or at least a version of it, came up during the day, and the importance of it was hit home to all of us there pretty hard.
What is this ground breaking principle I hear you ask?
Can’t stand the suspense…
Ok, I’ll tell you, it’s called…
The Principle of Causation
I’ve stolen the name from the law of physics that follows a similar concept. Good news is you don’t need a PhD to understand how it translates into the world of business.
So what does this principle mean?
It’s simple. If you deal with the cause, you get the effect.
Yet too many businesses and business owners get this the wrong way round.
They think just changing their website will solve their lead problem. They think that selling harder will bring in the money. Or that adding more products means more cash.
That’s simply wrong. That’s not dealing with the root cause of the disease. That’s fighting the symptom.
The difference between cause and effect
Let’s say the biggest problem in your business right now is that you don’t have enough customers.
Is this really the problem? Or is it a symptom? Is it the effect of not dealing with the root cause?
What could the cause really be? I’ll try and show you using some possible scenarios…
You don’t have enough customers because you don’t have something people want.
Or you haven’t figured out the best message that connects with your customers.
Or you don’t make enough sales calls.
Or you don’t have a systemised process to generate leads and then convert them into paying customers.
Ok, we’re getting closer to the root cause, but we’re not quite there yet…
If this is your biggest problem, then I’d take a guess that a possible root cause is that you don’t have a strategy that is tried, constantly tested and optimised to get more customers at a cost that enables your business to grow.
The cause is ignorance, or it’s disorganisation. Or at it’s worst it’s arrogance.
You don’t know what you don’t know. You don’t have a roadmap to inform you and your staff what to do, or where to turn at each stage of the buyer journey. You think you know everything about your business, therefore your customers should too.
Let’s look at another example…
What if you have high staff turnover?
That’s the symptom, the effect.
Contributing effects of this high turnover could include a lack of staff support, poor working conditions, lower than average pay, or limited training.
Often though in this case, the ultimate cause is bad management.
Too many managers are quick to blame their staff without taking a proper look in the mirror. Yes, you’ll get a few bad apples, but if turnover is consistently high it’s not the apples that are bad, it’s the tree.
People go where they’re appreciated, they work for a company that doesn’t just view them as a number, they perform at their highest and stick around when they work under a management team or structure that clearly communicates expectations, is consistent and operates to shared values that they believe in.
And if you really want to look deeper into The Rabbit Hole…
…when staff turnover is high, staff motivation is often low. Which means they make less sales calls, they don’t deal with customers effectively, they don’t understand or follow the processes, which means you have less customers, which means you have less money to invest in proper training, which means…
Think of it like economics 101
Here’s another way to think about it.
Cause + Effect = Profit
The cause is demand.
The effect is supply.
If you don’t have demand you don’t have customers.
If you don’t have supply you can’t fulfil demand, so someone else will.
And it’s the sum of these parts that equal profit.
Profit is achieved from customers demanding your solution to the point that they spend money with you, more often, at a price they feel reflects the value they receive in return, and where your business can deliver this at a cost that is lower than this perceived value.
If you can give more value than they expect for the price you charge, you’ll have a waiting list, or in our example, higher demand.
From these customers being so happy they begin telling others with the same problems or desires, who become customers, who tell others…
You get the idea.
By creating a high demand, you increase the supply.
That’s because in this case, demand means more customers. Meaning more money to invest in systems, processes and staff to improve the efficiency of serving those customers and keeping them happy.
So supply is increased by dealing with the cause just as much as it increase demand. Dealing with the cause has an exponential impact on a business.
(By the way, a great book that looks at this idea in more detail is Oversubscribed: How to Get People Lining Up to Do Business with You, by Daniel Priestly)
Make The Principle of Causation work for you
The whole idea I hope you see here is that by doing what your competition isn’t prepared to do, you can set yourself apart. If you focus on the underlying cause you’ll quickly see how they can positively impact your desired effect or outcome.
If you want to increase your profits then shift your efforts towards connecting with and educating your market through value based marketing.
Show people in your audience how to join the dots between their challenges and you, so that they point to your solution as the only viable option, and you’ll increase your profits.
Offer something of incredible value, that people actually want, with no expectation other than to actually help them and you’ll increase your profits.
Focus on your customer, really understand them, deal with the cause of why they are seeking a solution, and the problem they’re really looking to solve. Do that and you’ll increase your profits.
There are literally thousands of ways you could apply The Principle of Causation to your business, but just start with one. Focus on the one that matters most, then move on to the next.
Times, they are a changin
Business and marketing has changed.
No longer can you create something that you want to sell and use marketing to convince people to buy it. The smartest business owners, marketers and entrepreneurs understand this, and instead build products and services WITH their audience and the people they serve.
Marketing is no longer just about generating leads, branding or positioning. It’s not about ramming your stuff down people’s throats.
Today it starts with listening to the customer, it’s involved in product creation and focuses on educating people through a process of discovery towards something that has proven demand.
There’s much more to this and how it can help your business grow. But rather than try and re-think and regurgitate what has already been done, I’d suggest you check out Dan’s new book Breeding Gazelles: Fast Growth Strategies For Your Business
Want more business lessons? You can read this post where digital marketing guru Ryan Deiss gave me a very important business tip.
And in the spirit of working with my audience, if you have any suggestions for future posts, need a friendly bit of advice on how you can apply this principle to your business, drop me an email on email@example.com.
Lastly, if any of you are going to Dan’s Gazelles Event on 10th May in London (sold out I believe), I’ll see you there! Come and say hello!