Why this basic maths model could be key to understanding how to make your business stand out
There’s an Icelandic proverb that says “mediocrity is the enemy of greatness”, and in these days of increased competition, a very difficult past couple of years and a potential recession, settling for mediocrity is likely to mean that many businesses don’t survive.
In this article, were going to look at how we can use a classic mathematical model to understand where our business sits, and then take steps that will help us stand out in the eyes of customers, drive more sales and improve your bottom line.
The Bell Curve: A Simple Way To Understand How We’re Performing
Cast your mind back to your school maths lessons and chances are you’ll recognise this graph:
Now, before your eyes glaze over at the thought of standard deviations and other statistical calculations don’t worry – we’re not going to get into a maths lesson.
Instead, we’re going to talk about is how to make your business stand out from the crowd.
You see, the Bell curve graph above basically shows the statistical chance of a particular outcome.
Let’s say you give 100 people a spelling test – how would they score?
The average is the middle, with the majority sitting just either side of that.
Around 1/3rd will achieve just below the middle and a further 1/3 will score just above, with much smaller percentages scoring either very well or very poorly.
This sort of statistic is represented in many areas of life.
If you were to look at the distribution of wealth across the nation based on the average wealth per person, you will find similar results: half achieving less but a large percentage of that half being just below the average – and half doing better, with most just above that average wealth.
What this means for your business
Chances are, statistically speaking, you will fall into the middle range of the bell curve for most aspects of your business.
What about customer service?
If I asked 100 jewellers where they thought they sat in terms of customer service, I guarantee most would put themselves in the top 13.5% or even the very top 2.5%.
Statistically this is highly unlikely.
What about quality of staff?
Again, I’d probably get the same answers, with most jewellers scoring themselves highly, or above average. However, again the chances of this happening is incredibly unlikely.
Quality of product sold?
Return on investment?
Reordering processes?
Stockturn?
Marketing effectiveness?
Evidence would tend to suggest there is a 2 out of 3 chance that your store is average in the majority of these categories.
And, if you’re not average then there’s a 50% chance that you’re doing poorly!
Less than 20% of stores – just 1 in 5 – can genuinely claim to be doing better than most – it is literally the law of averages.
Are you really operating your store better than the average?
When I speak to other jewellers, I frequently ask them that the key point of difference is that their business offers over their competition.
I am often given the answer – superior service.
Yet, when I ask them what their competition would say if I asked the same question they concede that their answer is likely to be identical.
If everyone is giving great service, then ‘great’ is therefore the new average and not a point of difference.
Rather than assuming you have it nailed better than your competition, it’s smarter to assume you are more likely to be in the 4 out of 5 who are not doing it any better than the rest.
What would is take to go from average to exceptional?
Exercises like this require us to be honest with ourselves if they’re going to help us improve the quality of our business.
This means that you can’t assume you’ve already got it better than your competition.
Instead, you need to consider the fact that it’s very likely that your current standard of performance is, at best, average, or could be considerably worse than others are achieving.
After all, 50% of people will always be below the average, with the bottom 15% performing below expectations.
If you were to make the assumption that you were operating at an ‘average’ level across every area of your business (merchandise quality, stock turnover, marketing, sales, customer service and more), then what would you start to change?
What would it take to move from ‘meets expectations’ to ‘excellent’ performance?
Now, you may be above the benchmark for some sectors at the moment.
But benchmarks don’t stand still. Your competition (both offline and online) is improving, and what may be above average today may become merely average tomorrow.
So, if you assume the minimum benchmark is higher than what you are currently doing, by thinking about how you can move to the top 2.5%, you will surprise yourself at what you can achieve.
If you don’t, you run the risk of getting left behind by your competition.
We’ll leave you with this: the time required to set a marathon world record is 15 minutes faster than what was needed 50 years ago.
You can’t afford to continue functioning at the standard that works now – even if it is ‘good enough’