Leverage and Automation
In the previous post we looked at inputs, processes and outputs for arranging a dinner party. Now let's get an understanding of what Leverage and Automation can do for your party.
But first, understand this key principle:
Every output becomes the input for another process.
When we looked at "inviting guests" as a process, we saw that it required paper, envelopes, ink and stamps. The desired result was guests for the party. The "output" of inviting guests became "input" for the party. Throw in some groceries and a little work and you have yourself a dinner party.
Now let's automate the invitation process using a computer, the internet, and email. By doing so, we have eliminated the ink, paper, envelopes and stamps. Simple enough, right?
What's leverage? Suppose you would like to have 20 people attend your dinner party. But you are new to town and have only made four new friends. So you ask each of your four friends to also invite four of their friends so you can meet them at the dinner party. You decide to use automation to send these invitations because you want the process to be as easy as possible. You do not want to burden your friends with the need for ink, paper, envelopes, or stamps.
To make this even easier on your four friends, along with your invitation you include a sample email they can use to tell their friends about the party. If everyone receives the information, is available for the party, and willing to attend you will have 20 guests at the party.
How you draw this model depends on if you are looking at the invitations or the guests. The invitations are going one way, the guests are going to the party. Here's the picture:
This very model is used every day in marketing. Business people using referral marketing often offer a discount or rebate if you refer customers to their business. Affiliate Marketing programs usually offer you a direct share of the sales when you promote the business.
One apartment complex I lived in several years ago offered me a $100 discount on my rent for referring new tenants to the complex. I probably could have lived rent free if I had spent enough time promoting the apartments.
This leads to the final point I want to make with this post. Word-of-Mouth Advertising is an extremely powerful way to build a business. When your customers realize that you sincerely provide what is in their best interest, they will readily spread the word.
But first, understand this key principle:
When we looked at "inviting guests" as a process, we saw that it required paper, envelopes, ink and stamps. The desired result was guests for the party. The "output" of inviting guests became "input" for the party. Throw in some groceries and a little work and you have yourself a dinner party.
Now let's automate the invitation process using a computer, the internet, and email. By doing so, we have eliminated the ink, paper, envelopes and stamps. Simple enough, right?
What's leverage? Suppose you would like to have 20 people attend your dinner party. But you are new to town and have only made four new friends. So you ask each of your four friends to also invite four of their friends so you can meet them at the dinner party. You decide to use automation to send these invitations because you want the process to be as easy as possible. You do not want to burden your friends with the need for ink, paper, envelopes, or stamps.
To make this even easier on your four friends, along with your invitation you include a sample email they can use to tell their friends about the party. If everyone receives the information, is available for the party, and willing to attend you will have 20 guests at the party.
How you draw this model depends on if you are looking at the invitations or the guests. The invitations are going one way, the guests are going to the party. Here's the picture:
This very model is used every day in marketing. Business people using referral marketing often offer a discount or rebate if you refer customers to their business. Affiliate Marketing programs usually offer you a direct share of the sales when you promote the business.
One apartment complex I lived in several years ago offered me a $100 discount on my rent for referring new tenants to the complex. I probably could have lived rent free if I had spent enough time promoting the apartments.
This leads to the final point I want to make with this post. Word-of-Mouth Advertising is an extremely powerful way to build a business. When your customers realize that you sincerely provide what is in their best interest, they will readily spread the word.
posted by Scott at 1:33 PM
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