When Forbes asked business owners the most important lessons they’d learned the hard way, failing to focus on doing one thing really well made it to the top of the list. The Elon Musk’s and Steve Wozniak’s of the world didn’t achieve their success by becoming masters of all trades, but by identifying and improving on their greatest strengths.
Laser-like focus has its perks, and client retention is one of them. When relationships with customers are managed based on a single metric that tracks how healthy each account is, problems can be identified at a glance and fewer ailing relationships will slip away unnoticed.
The One Metric that Matters (OMTM) theory helps business owners achieve that degree of focus. Coined by Alistair Croll and Benjamin Yosofitz, the concept has become increasingly necessary in a data-driven age. With metrics for everything, managers and staff would be forgiven for losing track of their company’s purpose. Information overload is one of the industry’s most destructive forces.
Big Effects on Small Budgets
The Pareto Principle shines through with the OMTM concept. The principle states that 80% of profits come from a mere 20% of customers. How large that 20% grows, however, depends entirely on the business owner or strategist.
A security firm's OMTM could optimize revenue growth by turning more one-time-buyers into loyal return clients. Every business is unique, so one company's surefire way to retain clients is not the same as another's. Identifying that can mean the difference between utter failure and resounding success.
Dropbox was once the world’s most expensive startup disaster. The founder, Drew Houston, figured out his primary problem: he couldn’t communicate what his startup did, let alone tell people why they should use it. Once he’d solved that, he quickly skyrocketed to success. Business owners who are trying to solve multiple problems are better off scrapping the entire thought process and identifying the problem in greatest need of a solution.