The four critical components of the Discipline of Strategy are opportunity, leverage, scalability and marketability. Together, they lead to exponential growth. 

Here we will talk about leverage. 

Leverage is making what you have, go further. It’s like a strategically placed crowbar that enables you to push on one end to move something substantial at the other end. Understanding where to apply leverage can help you move mountains.  

Your product’s value acts like leverage. Value is what the consumer feels they’re getting in exchange for their money. The better the product’s worth, the more consumers want it and the more advantage you have. Increasing the product’s value increases your leverage, which enables you to gain a positive outcome, like additional revenue and improved margins.

Netflix leveraged digital streaming to provide millions of movies to customers without needing to invest physical copies of them. It costs Microsoft next to nothing to sell copies of Windows after it financed its development. In 1964, American Airlines replaced the old paper-and-pencil with the SABRE electronic ticketing system it developed for its use and then licensed it to every other airline.  

Leverage is the advantage that exists when a person or entity has the upper hand. 

These are several components or steps of leverage: 

  • A more significant knowledge or experience base
  • exclusivity in a particular market, 
  • lower product pricing, better service options, 
  • or excellent personal relationships — with particular emphasis on the word personal.

Leverage is about taking what you already have and using it to get more. In sales, chasing down new leads and hunting for new business is the most obvious way to boost sales. In fact, most salespeople can get so caught up in looking for new customers that they ignore their most significant asset — their existing clients. Sometimes, the single best way to make more sales is to leverage your relationships with people you’ve already done business with, keeping in touch with them and fostering relationships. You already know those customers and what they need: pushing on the end of that knowledge crowbar can move something else into place.

Leverage enables you to do more with less, maximizing the value of what you already have. For example, if you’ve already created a single product, you could leverage your investment in making that product (patterns, processes, software, whatever) into selling it multiple times. Think of software or franchise systems: after the first iteration, you can duplicate success. After you’ve done something the first time, leverage produces future income or business with less time and effort.

Every business should have precise systems in place internally to encourage the creation and use of leverage in money, people, processes, and technology to benefit marketing, sales, fulfillment, invoicing, etc. 

To repeat, leverage is making what you have, go further. Leverage comes from knowledge or experience, exclusivity, better service, and excellent personal relationships. 

Applying leverage to your business systems will give you an edge over the competition and result in lasting success. Too often, businesses focus on their product or service and overlook internal processes that can be streamlined and improved. By taking a step back and focusing on how you can use leverage to improve efficiency and effectiveness, you set yourself up for long-term success. Unsure of where to start? Our team of business efficiency experts is ready and waiting to help you take your business to the next level. Contact us today to get started!

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