Five Questions That Will Actually Help Your Business Make Money by Laurie Wink

Keeping a business profitable in the current recession plagued market can be tough. It’s easy to get bogged down in the complexities of ever-changing economic conditions. It’s difficult to cut through the fog and figure out how to stay afloat.

In his 2007 book, “The Ultimate Sales Machine,” marketing strategist Chet Holmes said 95 percent of companies never reach $1 million in annual sales. For those that do, 95 percent won’t make it to $5 million in annual sales and 96 percent of all companies fail within 10 years.

Other statistics indicate that 80% of the companies fail in the first year.

Business expert Verinder Syal says these numbers have only gotten worse in the past five years. Whether you’re leading a small business or corporate giant, Syal says the best way to think about building your business is to strip away the unessential and get to the heart of the matter.

“Running a business is pretty damn easy if you follow The 5 Q Approach,” explains Syal. “The 5 Q Approach takes our insights from years of experience working in Fortune 500 companies and start-ups combined with the five questions made famous by Peter Drucker.”

Question One: Who is our customer?
The fundamental purpose of any business or organization is to serve people’s needs, Syal says. Too often, companies forget who their customers are or else they never identified them in the first place. Syal uses an example from his experience at Quaker Oats.

“There was always a discussion of whether Wilford Brimley was the best spokesperson for the oatmeal product,” Syal says. “He was old, overweight and old-fashioned. But when you reminded yourself that the typical customer of the product was 55 or older, then it became apparent that Wilford was exactly the right person.”

Question Two: Why should they buy from us?
Having identified the customers and their needs, Syal believes it is critical for any company to decide “their point of differentiation,” or what sets them apart from similar companies. Syal refers to the airline industry to make his point, citing Southwest Airlines as a business that listens to its customers and delivers what it promises.

“Southwest offers low prices, great value and a no frills, safe flying experience,” Syal says. “In an industry that has been beset by poor profitability, they have been consistently profitable for 40 years.”

Question Three: What else do customers need?
Generally, about 80 percent of business profits come from 20 percent of the customer base, Syal says. It makes good business sense to focus on those customers’ needs and find out whether they have additional needs that the business can meet.

For an example, Syal refers to statistics from the book, “Flip the Funnel,” by Joseph Jaffe. According to the author, just 12 percent of shoppers are responsible for 80 percent of Coca-Cola’s sales; less than 7 percent account for 80 percent of Diet Coke sales. “Such statistics are there for virtually every business,” he said. “Those are the customers you should ask about what else they need.”

Question Four: Where’s our focus?
Too often, Syal says, the focus is “inside out.” The company has a product and tries to figure out how to get customers to buy it. Instead, the thinking should be “outside in,” based on listening to what customers want.

Syal says this concept is explained by Ranjay Gulati in his book, “The Outside Approach to Customer Service.” According to Gulati, Best Buy found out that 55 percent of its customers were women and they didn’t enjoy their shopping experience because they felt the stores were male-oriented and too techie. When the company understood this, Syal says, its approach changed.

The book further explains that: Best Buy trained their sales people to be generalists and problem solvers rather than techies. The company also added products and services that appealed to women.

Question Five: Do we have consistent leadership?
Syal believes all companies can have really great leadership but often that isn’t the case. Executives put personal interests ahead of their responsibility to serve customers and employees. Syal teaches a course on leadership at Northwestern University and stresses to his students, “Leadership ultimately is an act of service.”

Once the five questions are answered, Syal says it’s important for leaders to dig deeper.

“The next level is to specifically focus on the customer, leadership and efficacy, or efficiency,” Syal says.

Two free workbooks for businesses to explore leadership and The 5 Q Approach are available at SyalConsult.com.

Verinder Syal’s expertise and advice for large and small business comes from decades of working in both arenas. As the former president of the cereal division of Quaker Oats, CEO of Rice-A-Roni, Stella Cheese and Rymer Foods, Syal had to deliver results not only to the brand but the stockholders. As a franchisee for Filterfresh, he grew his business from zero customers into a major player in the Chicagoland market, selling the business for a profit. He formed Syal Consult to help clients build exceptional businesses. He also shares his business-building insights with students at Northwestern University, where he teaches the course “Leadership and Entrepreneurship.” As a keynote speaker and workshop leader, he instructs business owners on a range of subjects, including the 5Q Approach.

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