Friday, March 19, 2010

#768 Beware the Numbers Game

What are the important numbers to consider? Be careful building a Business based on the "numbers game" There are many examples where sheer numbers were the key to success. Sure, there is always a lot more to the story, but consider AOL back in it's meteoric rise. It turned out that for every so many disks or CDs they gave away, a certain percentage were actually used to create new accounts. And a number of those stuck around long enough to more than pay for the investment in all the disks and CDs. ROI Return on Investment. It paid off "big time" for AOL. But not all numbers are created equal. Did they give the disks to grade school students? I don't believe so. Did they give them to the homeless? I doubt it. I remember getting them in computer magazines. I remember seeing a display in the US Post Office. Yes, the Post Office. How stupid... Kind of like sticking a sign in your window, "Hey, please put me out of business." We know today that the USPS should have been changing with the times and inventing or endorsing a business model that would evolve... but I digress. What numbers are important to your efforts? Hard to say without talking with you. But I can share a hint how to figure it out: check out this post on Eli Goldratt's "P&Q Example" and actually download the exercise and then, wait for it, ACTUALLY do the exercise. If you actually work the numbers, you will understand why business is rarely a "numbers game" and while at exactly the same time, it is nothing more than a numbers game. P&Q Example Jeff 'SKI' Kinsey (843) 564-4754 ©2010 Jeff 'SKI' Kinsey. All rights reserved.
blog comments powered by Disqus