Levers | Amos Schwartzfarb

Summary of: Levers: The Framework for Building Repeatability into Your Business
By: Amos Schwartzfarb

Introduction

Ready to unlock the secrets of repeatable business success? In ‘Levers: The Framework for Building Repeatability into Your Business’, Amos Schwartzfarb helps entrepreneurs align their teams with a metrics-driven strategy. This book summary will guide you through discovering your core customers’ preferences, learning what makes your business tick, and understanding how to achieve sustained success – all by testing ideas and embarking on a journey of continuous learning. Using the five W’s framework, you’ll gain insights that empower you to foster a sense of control and predictability, even in the most unstable environments.

The Levers of Successful Entrepreneurship

Entrepreneurs can increase their chances of success by understanding their core customers’ needs and wants, and adjusting their strategies accordingly. To do this, they must continuously test their ideas, analyze results, make adjustments, and experiment again. “Levers” offers a framework for success by asking five key questions about the business: Who are the customers? What do they want and why? How can the business make money while serving them? How to start and what comes next? Is the business doing the right things? The ultimate goal is to create a metrics-driven strategy that empowers entrepreneurs with knowledge about whether their efforts matter. By learning the answers to these questions, entrepreneurs can build a common language among their team members, and understand precisely what makes their business work. This approach provides a sense of control in an otherwise unpredictable environment and a portal through which to see and manage the future.

Understanding Your Customers

Helper Bees founder Char Hu aimed to help Alzheimer’s patients stay in their homes by connecting them with their neighbors. However, he soon realized that their adult children were the primary users. With this discovery, he redirected his marketing efforts and launched a platform that connected patients with caregivers. Eventually, Helper Bees extended its services to insurance companies in favor of their policyholders staying at home. Hu’s success came from understanding his customers, what they wanted, and why they wanted it. To determine your own W3, begin by conversing with customers and potential customers. Formulate products and services based on feedback, test rigorously, and repeat. This process is challenging but fundamental to success. To understand your W3, take a blank piece of paper, list the customers you serve, what they buy and why they buy it. Test your pitch with someone outside your business, and you will likely discover data to collect to establish a complete W3 understanding.

Narrow Your Target Customer

Learn how identifying a specific group of perfect customers can help grow your business and increase revenues.

The key to business success is understanding your target customers’ profile thoroughly. The process begins by starting with a hypothesis and refining it over time through experiments and customer discussions. Begin by zeroing in on a specific customer type that will buy your product or service every time you pitch it, the perfect target. While this group alone will not suffice, it will provide the necessary understanding of the customer’s profile, allowing you to test various aspects until you identify the full spectrum of the “who.”

The ultimate proof of success lies in defining your target customer so narrowly and specifically that you are 100% confident that every conversation will result in a sale. Business.com is a prime example of this strategy. By focusing on their core target of small and midsize businesses with simple things to sell that most businesses require, they grew from $7 million to $80 million in annual revenues in less than two years. They also made sales outside of their core customer base but in a disciplined manner that maximized their resources.

It is crucial to keep careful track of the customer profile and keep testing it to identify why they choose to buy from you. It is also essential to think about what you sell and what your customer buys. You sell drills, but they want holes. You sell consulting, but your clients buy inside information about their competition. Business.com sold search to advertisers, but customers bought leads. Knowing what motivated their customers, they did not pitch search but focused on leads instead.

To understand their customers’ why, businesses must learn how their customers measure their success. For example, they buy leads to make sales, and therefore, businesses must ask customers if they made sales from their leads and how they measured that relationship. Additionally, it is critical to understand why the person in the business who does the buying chooses to buy from you and to aim for customers whose buyers have incentives to buy from you.

By identifying your perfect target customers and understanding their motivations for buying from you, you can refine your business strategies and products to maximize your profits.

Drive Revenue and Success

To build a repeatable and successful business model, you need to know your revenue drivers. Identifying the key sub-drivers that affect your business will help you create a mathematical formula based on data and evidence. Using SkillPop and Business.com as examples, this formula can predict the future with precision and clarity and help you prioritize. Identifying your sub-drivers takes hard work and time, but by testing and verifying your formula, you can achieve breakthrough growth. Create a table, listing your presumed key drivers and their sub-drivers, and the things that affect them. You may even have “sub-sub-subdrivers” that need to be listed.

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