7 times ‘more’ isn’t better in business

by Kelly Exeter | September 26th, 2017 | 0 comments

Don’t like watching videos? Here’s the transcript!

Okay, so today, I want to kick off with a quick story. I was out running earlier this week, and I was doing hill repeats. And I was taking a good 20 seconds longer to do these hill repeats than the last time I did them. And the main reason for that was because the last time I did them, I was probably one or two kilos lighter than I am now. It gave me cause to reflect on the fact that, in running, every kilo that you lose is, like, free speed.

So, you lose one kilo, suddenly you can run 10 seconds faster per kilometre. You lose five kilos; you might pick up 50 seconds a kilometre. Those are pretty significant gains. So, more definitely seems to be better when it comes to weight loss and running.

But, of course, there’s a point where the returns on that weight loss are going to diminish. At a certain number of kilos lost, your body’s going to start breaking down. You might start getting stress fractures. You’ll start getting ill. And you won’t be able to train. At which point, you can’t actually run anymore. And that’s the point where more stops being better.

So, what’s this got to do with business? Well, there are seven ways I’ve seen this play out in business.

1. MORE SALES

So, the first one is in sales. We’ve all heard of those businesses who’ve been mentioned on TV, or in the newspaper … and, because of this mention, it drives so many sales on their site, they run out of their product. Or they’re booked out for six months in advance.

And this sounds really amazing until you realise that if you sold out of this product that everybody’s coming to your website to buy, your new customers are going to be annoyed because they can’t get the product. Your existing customers are going to be annoyed because you don’t have the time to service them properly anymore. (And they can’t get the product they’re used to being able to get!)

Next thing you know, you’re spending your whole day dealing with complaints from people and putting out fires, rather than servicing your existing clients and delighting them. Once your sales exceed your ability to service those sales, the return you’re getting on those increased sales goes right out the window. So, there’s definitely a point with sales where more is not better.

2. MORE TRAFFIC

What about traffic? We can all do with more traffic to our sites, right? Well, if it’s the right traffic, from people who are genuinely interested in what you have to offer, then yes, more traffic is great. But, again, only to a point. Because if that increased traffic is leading to a level of sales that you can’t keep up with, as per my previous point, it becomes a bit of a poisoned chalice.

You also need to be aware of viral traffic. So many of us dream of a blog post or a social media post that causes heaps of viral traffic being sent to our site. The problem with viral traffic is that it only lasts for a couple of days. So those couple of days is spent dealing with the fact that your website is crashing all the time. You’re spending lots of time on the phone to your web hosts, saying, “Fix my site.”

Worse, all those people who are being sent to your site, they’re not really interested in you. They’re interested only in the viral thing. So once they’ve checked out the viral thing, they’re gone. And you’ll probably never see them again. Okay? So, the best kind of traffic is not ‘more traffic’, it’s targeted traffic. And the best way to build more targeted traffic is to do it strategically over time. This means you’re in control of the growth. You can tweak it to ensure you’re attracting the right kind of people. And it means the tap is never turned on so much, that you get drowned, and your business is harmed.

3. MORE LEADS

Okay, let’s talk about leads because surely, you can never have too many enquiries or leads for your business? But you definitely can, in a similar way that too many sales can overload your system, so too can too many leads. But, also, with leads, you need to consider the quality of the leads, as you had to consider the quality of the traffic. If you’re spending a load of time answering enquiries and following up people who are unlikely to use your services or buy from you, you’re wasting so much of your time.

So, more leads are only great if they’re qualified leads. And then, if they’re qualified leads, and you’re getting heaps of them, you’d better hope you’ve got the resources to nurture those leads. If you don’t have the resources to nurture those leads particularly well, you’ll end up losing the sale.

4. MORE STAFF

Okay, the next thing where people might think more is better is with a bigger team or more staff. So you know if one staff member is great, then surely 5 or 10 are better. And it might be, if you love managing people, and if your business can afford that many staff. Because remember, in Australia in particular, staff are expensive.

Beyond their salary, you’re also paying for superannuation, you’re paying for annual leave, you’re paying for sick leave. Okay? So sometimes it’s better to improve your internal systems or ditch an underperforming product before putting on new staff.

New staff require training and on-boarding. And again, as mentioned, if you don’t particularly like managing people, and you can’t afford someone to manage people for you, you’re probably better off with a business model that doesn’t require a huge team of staff.

5. MORE EMAIL SUBSCRIBERS

Okay. Let’s talk email subscribers, because we all know how important it is to build an email list. It’s the most important marketing tool in our arsenal, but is big always better? So Ramit Sethi, who’s the author of I Will Teach You to Be Rich, he recently did an experiment where he used Facebook ads to drive subscriptions to his list. And he spent $2 million doing this so that we don’t have to. Thank you, Ramit.

And the outcome was, he found out you don’t want to build a list full of subscribers, you want to build a list full of buyers. In other words, a small list full of people who like spending money with you will always trump a huge list of people who just love all the great content that you put out for free, but don’t actually ever want to buy from you, or don’t have the ability to buy from you.

Remember also, the more people you have on your email list, the more you are paying to your email provider. So, your MailChimp, or your Drip, or your AWeber. You don’t really want to be paying heaps for people who aren’t even reading your emails. You should be doing regular culls of your list over time. While more email subscribers are better, you want them to be qualified email subscribers, in that they’re buyers.

6. MORE PRODUCTS

Okay. What about products? So, my friend Jarrod is one of those never die wondering guys, with an incredible amount of energy for his business. A few years ago, he had a product that was going gangbusters for him. So, in his mind, if one product was going so well, then another 10 products would surely make a killing. So, he created those products, and all they did was create more work for him, and nowhere near the same level of profit that the original product did.

My colleague Nathan is deeply immersed in the e-commerce space. And he found that each new product he adds into his store brings with it 12 times more work. Yes, 12 times. And you might think, “How?” But when you consider things like supply chains, and delivery schedules, and support for these products, you quickly realise how judicious you have to be with the creation of new products. In this regard, more is almost never better.

7. MORE WORK HOURS

Okay, and the final and seventh thing we sometimes like to think, more is better, is our work hours. Imagine you only have two days a week to work on your business. And then you get the opportunity to spend an extra day on your business. That’s going to be pretty impactful. And certainly, five days a week, going full-time, with a side hustle, is better than only having three days a week to spend on it.

But what about when you start extending your workday from seven or eight hours, to being 10 to 12 hours? Is this still good? Well, no. Because there’s absolutely a point with hours worked, where the returns start to diminish. If you’re working 10 hours a day or more, then you’ve either launched a startup, (and if so, good luck to you), or, you’ve got an established business where you’ve not taken the time to look at your business systems, and figure out where you can do some deleting and streamlining.

A business mentor of mine, James Schramko, says, “Working too much turns you into a dull instrument.” And he is right. After a certain number of hours a day, you have lost the ability to be both creative, and effective, okay? So, instead of trying to solve your business problems by working more hours, have a look at some of the things I’ve mentioned this post, and see where you can reverse your more is better thinking. I guarantee, it will have significant effects, both for you and for your business.

Liked this post? You’ll find 20 more high-impact, easy-to-implement strategies for making your business-owning life better in Kelly’s book 20 Simple Shortcuts to Small Business Success. It’s available in paperback, pdf and Kindle formats here.

 

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