Every entrepreneur wants to know how to scale.
The challenge, however, is that scaling requires both an unrelenting ambition to grow, and simultaneously, an extreme amount of patience. Scaling is not as easy as throwing money at a problem, or hiring as many people as possible. If anything, those kinds of decisions end up running you into the ground.
Instead, I like to think of scaling as the result of your foundation. The stronger the foundation, the easier it is to scale.
What does a strong foundation look like?
The easiest way to determine whether you have a strong business foundation is to look at your churn rate. How long do your customers stick with you? Do they leave immediately? Or are they loyal–and more importantly, do they bring their friends to your business over time?
When a business has a shaky foundation, they’re stuck in a vicious cycle of constantly replacing the clients they’re losing. You don’t build a business by selling, selling, selling. You build a business by selling, and then retaining. And you exponentially build a business when those clients you’re retaining end up attracting new clients for you–because your product or service is that good.
So, here are the five things you need to have figured out before you can scale your business effectively.
1. It’s all about the customer.
One of my favorite quotes is by Sam Walton, founder of Walmart and Sam’s Club. He said, “There is only one boss, the customer, and he can fire everybody from the chairman on down by simply bringing his business somewhere else.”
That’s the absolute truth.
This is something I talk about extensively in my book for emerging entrepreneurs, All In. If you don’t have your eye on the client experience every minute of every day, you’re completely missing the point of why you are in business. Without them in your corner, any venture you start may as well be a very expensive vanity project–because you’re only doing it for yourself.
If you want to be a huge hit out of the gate, you need to work on creating an army of raving fans. Look at a company like Apple. Once people buy their Mac or iPhone, they’re hooked. You rarely see people go back to PCs, even though Macs have their flaws too. Why? Because Apple isn’t just selling products to their customers–they’re a lifestyle choice. Even now, after the golden Jobs era has passed, their customers still love them in an almost irrational way. They don’t just want them; they think they need them.
That’s the kind of fervent loyalty you want to inspire in your customers. Make them so crazy for you that they can’t live without you.
2. Fix mistakes fast.
If you can’t fix the small errors now, how do you expect to fix the big errors later on?
Repeat after me: it’s never the customer’s fault. When trouble hits, don’t be defensive about it. Don’t run around trying to assign blame. Just fall on your sword and do whatever it takes to fix it fast.
More than anything, this is a habit. It’s a conscious decision you make as an entrepreneur, the leader of your company, to do right by your customers. And if you can’t get it right when you’re still small, then scaling isn’t going to make those issues go away.
Take the time to get your processes in place now.
I don’t count the screw-ups that happen in my companies as much as I keep tabs on how quickly problems are resolved. I always tell my people, “We’re all human, and we’re going to make mistakes. But the customer is going to remember how fast you fix the problem more than they’re going to remember the mistake itself.”
3. Underpromise, overdeliver.
You may demand perfection from yourself, your partners, and your employees, but you can’t let that carry over to how you talk to your customers.
Don’t promise perfection to them. Just don’t.
I know in this modern age, ideally, everything should be perfect all the time, right? But nobody is doing things perfectly all the time. It’s never happened din the history of business (it’s never happened in the history of anything).
Especially if you’re looking to scale a high-volume business–which I went through when I was scaling Wilmar Industries–then you have to determine a perfection ratio that works best for you. The smart thing to do is to make reasonable promises to your customers and then over-deliver on your promise. There is something about human nature that loves the pleasant surprise.
When you do it even better than what they expected, they love you for it.
4. Tailor your experience to the customer–don’t expect them to adjust to you.
This is a hugely important lesson in today’s market.
You can’t make customers adjust to you. You have to tailor your experience to them, and make them feel like they’re part of your family.
When new companies first attempt to scale, this tends to be the first thing thrown out the window. Suddenly, customers start getting treated like commodities, and what once was a personalized experience becomes a copy-paste interaction.
Let me tell you: that’s one of the fastest ways to show your customers you don’t care (and remember, it’s all about the customer).
I remember back in the 90s, once we had our Houston branch up and running, we noticed Texans didn’t like talking to our New Jersey-based customer service representatives. Want to know why? Because they thought we were a bunch of carpetbagging Yankees. (Some traditions die hard.)
Texans, by and large, wanted to hear a Southern voice when they called us. Being fanatical about customer service, I decided to create regional customer service centers all over the country. This is done all over the place today, but we were way ahead of the curve back in the ’90s. I even invested a million dollars in a phone system that would funnel calls to the appropriate region–so when somebody called from a specific area code, it went to their regional office. And in Houston, we hired locals to answer the phones so their background and accents were familiar to our Texas clients.
I know what you might be saying: “You really spent a million dollars on a phone system?”
No, I spent a million dollars on customer service.
5. You have to believe in yourself.
Call it cliche, but there is a big difference between an entrepreneur running a company with the belief he can scale it to the moon, and one who still isn’t sure if he can or not.
The head coach of the New England Patriots, Bill Belichick, has a way of motivating his players, and raising their expectations so they believe that they will win–every single time. The same goes for business. If you really want to become that Super Bowl team, that multi-million dollar (or even billion dollar) company, then you’ve got to start expecting big things from yourself.
At a certain point, you can’t just look the part. You have to be the part, feel it in everything you do, and know deep down that what you’re doing today is going to get you to where you want to be tomorrow.