How to Use Logic Trees and The Power of Leverage

The long list

Whatever you do for a living there are lots of ways you could improve things.  If you were to sit down with a pen and paper for five minutes and start to write a list I have no doubt that it would be a long list, a long, long list.

Getting to the short list

So where should you put your efforts?  What should you do first?  If you believe in the Pareto principle you will realise that not all of those improvements are equal.  How do you work out which improvement will give you the most leverage?

First, think through the problem and draw up a logic tree showing the possible outcomes.

Here is an example, imagine you sell pizza, and you want to sell more of it….

Logic Tree

  • Maybe the problem is that not enough people know you sell pizza (awareness)
  • Maybe the problem is that not enough people have tried your pizza (uptake)
  • Maybe the problem is that not enough people come back for your pizza (retention)

Now you can group all of your improvement ideas into actions that will improve awareness, uptake or retention

Next get some data that tells you how people are behaving….

Logic Tree

  • Now you know that 90% of people know you sell pizza
  • 60% of those that know have tried your pizza
  • But only 20% of those who have tried it ever try it again

Fixing the right problem

You can spend as much money as you like on customer awareness, advertising, rebranding, sales incentives, trial generation, service guarantees.  The problem is that customers don’t come back.

All the leverage is in retention.  That is the place where you need to focus your efforts.

Best you sack the chef (or am I jumping to conclusions?)

Do you understand where you could get the greatest leverage?

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