How Much Value Do Your Employees Bring to the Bottom Line?
When you stop to think about it, the only people standing between you and the acquisition of lifetime customers are your employees.
And yet, getting your employees on board with your mission isn't easy. This joke pretty much sums it up: One business owner asked another, “How many employees do you have working for you?" The other replied, “About half.”
All kidding aside, let’s take this thought process one step further and let me ask you this question: How much is each one of your employees worth to your company?
For the sake of this article, let’s use a yardstick of just one year. Hypothetically, let’s assume if the amount of money one customer would spend with your company over a 12 month period is $500. If each one of your employees comes into contact with 10 customers per week, then when we multiply that number of new customers over 50 weeks, this comes to 500 customers per year, per employee. The potential retention power over the short term of one year has a financial impact of $250,000 of gross revenues per employee.
So what can you do to make sure that the employees you have on your team live up to your expectations? Plenty!
First, you must begin looking at each employee as a profit center, if you're not already. This means that, with the right amount of psychological and financial investment in each of your team members, they can begin to develop their full potential and contribute to the company’s bottom line.
By psychological investment, I am referring to how you and your management treat them. It has been said that employees don’t leave a job, they leave a boss or manager. In other words, if they don’t get the support and praise they deserve, their psychological bank account is empty. Once it becomes empty, they usually begin looking elsewhere for employment.
Financial investment refers to the amount of money you invest in their education and training. In today’s economy you can’t afford to retain employees who have the wrong attitude, or are lacking the necessary people or technical skill sets. These people are non-productive and literally steal money away from your bottom line.
Some business owners are reticent in investing in training for their employees, saying they cannot afford to invest in them or are worried that training employees will make them better equipped to leave for some other company. To answer these concerns, I remember how one business owner told me that he couldn’t afford not to train employees. As he explained it to me, “If they don’t produce, I don’t make money.”
In other words, we need to hire the best people we can find, and prepare them through the right kind of focused training and development programs. When you invest in developing your employee capital, you increase the percentage of the number of successful one-on-one encounters with your customers, whether it is in person, on the Internet, or over the telephone. (Despite the abundance of technological options that your customers have to interface with your business, for many customers, face-to-face or voice-to-voice contact is still the most important.)
So, how much value do your employees bring to your company? Let the numbers do the talking and invest in your team accordingly.