ACDC is a business process that helps you identify what phase of your business needs to be fixed. It stands for:
If you remember, we are right in the middle of a series going through the simple systems that I like to use in order to see progress in my business and my life. I’ve found it easier for me to be able to make progress in these areas by doing what other people have done rather than trying to make it all up myself.
In this week’s episode, we’re going to talk about ACDC. I’m not talking about the rock band, we can talk about that sometime if you want to, but what I’m talking about is attract, convert, deliver and collect. This and also what we’re going to be talking about next week are concepts that come from the book Clockwork with Mike Michalowicz. Mike Michalowicz is a pretty popular business author. I really love his stuff. Lots of years of research go into each of the books he writes. He applies them to his businesses first before he attempts to tell you that you should run your business in a particular way. It’s data driven, it’s experience backed and I really appreciate his approach.
Attract, convert, deliver and collect or ACDC is an easy way to think of the 4 stages that really every business has to run through. Without one of these 4 stages flowing nicely, the business will eventually die. Maybe not today, maybe not tomorrow, but eventually it will die.
Attract. You have to be attracting customers first of all. If you’re not attracting customers, then you have no new life coming into the business, and if the current business dies out, then of course the business dies.
Convert. It doesn’t really matter how much traffic you have coming in to your website or how much attention you have pointed at your brand, if nobody ends up becoming a customer of the brand or a client of your business, then the business dies.
You have to have the attraction, but you also have to have the conversion.
Delivery. The product or service has to be delivered, and it has to be delivered with a certain degree of efficiency. In other words, it can’t cost more to deliver the product than it does to acquire the customer because then you will lose money and go out of business.
Collect. Then finally the last is collect or some people would just say cash, which is pretty obvious. If you’re not collecting money, if people aren’t paying on time, if you can’t pay your bills, if you can’t pay your salary, then the business dies.
Those are really the only 4 stages of a business. This concept has actually dramatically helped me and it’s literally helping me right now. It’s really easy, especially for highly motivated entrepreneurs like me, and presumably you, to focus, to be laser-focused on a particular area that needs attention. What this does is helps you identify what area you’re currently at where the attention is needed. Some people have fantastic lead flow into their business, but they can’t convert customers. Some people are attracting and converting customers like nobody’s business, but they are losing money or taking too long or whatever on the delivery. You can see, you just have to put systems and processes in place and it starts to get really practical. It’s like if the problem is collect, you’re not collecting, well then, let’s look at that. What’s the problem? Are we letting customers go overdue on their bills and not even sending them any sort of reminders? Let’s put that in place and let’s see if that solves the problem. You have to put these things in place in order to see what’s going on.
For me, in my own personal business, in doing this, it’s actually ironic, but for me the problem is attraction. My business is fine. I’m stable. But I would like to see more people being attracted to the brand, frankly so that I have more opportunities to say no. Because the more that people come in and I can adjust according to what their needs and desires are, I want to help people, but I want to be turning away people so that I have the ability to not only raise my prices, but to help people that actually really need it and could really benefit from the services that I offer. I wish I had more opportunities to say no to people so I need to get my attraction up. Once I talk to a prospect, I can convert them without an issue. I don’t have an issue delivering the product, I have a great team behind me that does that and then I really don’t have an issue with collecting money either. Some people do take a little long to pay their bills but I have those automated processes in place that go in and collect that. It’s really not a big deal. I don’t have to worry with that as much as some other people do. The big thing is I need greater lead flow into my particular business and so that’s what I’m currently focused on. Because of that it allows me to laser-focus on that, to set goals around that, and to really take care of that first.
Just to round this out a little bit. What may end up happening is you get to a scenario where maybe your lead flow is actually too great. Then what you have to do is dial things back or you have to look at, well maybe your lead flow is coming in but you don’t even have the opportunity to meet with as many customers that you need to in order to raise that conversion rate or whatever. That’s where you have to then decide, do I need to raise my prices? Do I need to hire another salesperson to be able to take sales calls? Do I need to grow the team? You see how all of these decisions now start to be made after you make that first decision of focusing on the phase of business you are on right now.
So that’s the ACDC. I really hope that it helps you in your business endeavors. God bless you. Thank you for joining in and we’ll see you in the next episode.