A few years ago I was talking to a clergyman who was struggling with declining church attendance. We had a discussion about the reasons for that and I was telling him that there was not much difference between a church and a business.
To overcome his skepticism of my argument, I put it to him this way: Both business and churches have followers. In business, we call them customers and in a church, you call them believers or parishioners.
If you want to increase your profits in business, you need to focus on three types of customers:
- your current customers by giving them more service and creating value so they buy more;
- your prospective customers or leads, whose attention you need to capture – you ill also need to get them to believe in you so they’ll support your business;
- and past customers who have left your business.
Churches are no different – they have parishioners whose participation they want to encourage, new people who they want to evangelize and the fallen away whose issues need to be addressed as they’re welcomed back.
A percentage of all types of customers come in contact with our businesses. They engage with us through our advertising, website or sales teams, and then don’t buy for whatever reason. If we can increase the conversion rate of with these people, we can increase our profitability.
There’s not much difference with a church. There are people who come in contact with a church through weddings, funerals, websites and outreach but never become members. By improving their conversion rates and ability to communicate effectively with these people, they can end up with more members.
Another way to increase profits in business is to focus on our average sale. We can do this by encouraging customers to increase the number of items they purchase or encouraging them to buy more expensive items.
In churches, we might look at this two ways: encouraging people to donate more to our collections for outreach projects or encouraging them to bring more family members (or to have larger families, as some religions do).
Focusing on margins is another way that businesses can improve their bottom line. A one per cent change in your margin on $1 million in sales is $10,000 in your pocket. This can be very significant to business owners, many of whom struggle with profitability.
While churches could focus on margins if they needed to improve their cash flow, to increase their influence and change hearts and souls, they should be focusing on the marginalized. Two things happen when churches focus on the marginalized. First, they’re doing the mission of most religions – to help the physically or spiritually impoverished. Second, church communities with outreach programs for those in need capture the imagination of youth, who want to make a difference in the world and are usually put off by churches that often seem set in their ways.
The last area businesses need to focus on to increase profits is by looking at their expenses. Unfortunately, most struggling businesses look to this area first instead of figuring out how to increase sales by tweaking marketing or using their resources to increase business. Often, the spiral of cutting costs repeatedly results in poor customer service, followed by dissatisfied customers and lower sales, precipitating another round of cost-cutting.
It seems religious organizations also get in this cycle of focusing on money instead of figuring out how to invigorate their organization so it can make a difference for people. There’s no shortage of money for churches! It’s just in people’s pockets and until church leaders realize they need to show people they care about them more than the money, the money will stay where it is.
Because they offer rewards that are out of this world, religions have a place in society and must be able to reach people who are despondent, anxious, depressed and struggling with their spirituality by putting the focus on things that are more important in life.
Rules applying to successful businesses, despite what some clergy may feel, play an integral part in the success of religion. Without jobs or the money they provide for donations or charity, religious organizations would never be able to fulfil their mandates.
I never bumped into that clergyman again and sometimes I wonder if he was able to revitalize his church and save more souls. But I have bumped into business people who have used these concepts and managed to get their businesses from barely surviving to thriving.
Troy Media columnist David Fuller, MBA, is a certified professional business coach and author who helps business leaders ensure that their companies are successful. David is author of the book Profit Yourself Healthy. Email [email protected]