How Lean and Mean Costs You Green! What An Indoor Waterpark And CRA's Have In Common

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My wife and I recently took our kids to an indoor water park and I noticed a number of things that reminded me of the work I do to increase revenue and profits for background check companies.

The old business cliché, “lean and mean,” best described this business. While they covered the basics, you could tell the goal was to balance labor and revenue, not exploring what revenue could be, with a different customer or operational model. I believe they could have gotten an extra 15%-20% onsite and via future visit revenue had they done the following 5 things differently. 

1.     Make it super easy to buy

Lines for food were extremely long, and you couldn’t order from the table. By not moving around staff that wasn’t busy elsewhere to work tables during lunch and dinner, a ton of people left the property to eat. Staff wasn’t trained to do that. Pennies were saved. Dollars were lost!

The background check parallel? 

When a client wants to buy, don’t put them through four steps, three departments and five days to get a price quote. 

Instead, arm your people, right there, to make a sale. They’re not equipped, trained or senior enough? Coach them. Teach them. Lead them. The house won’t burn down if they quote too cheap or expensive. Give them a grid to work off and some flexibility. It’s not complicated, and your team will feel awesome at their newfound empowerment!

2.     Meet your customer where they are

There were 3 places to buy food, and 1 area to buy coffee. In the mornings, the food places were empty, and the coffee line ran 20 minutes long. 

Set up a portable coffee stand for two hours. Ask my wife. Coffee frustration is real. Eliminate it and your guests move along toward what they came for. A double win.

The background check parallel? 

Some clients want to talk via phone. Some email. Some text. Some want to chat often. Some rarely. Create multiple communications channels and opportunities to engage. It’s ok if they don’t want to engage now, but be ready for when and how they do. 

(And for #$&*’s sake, don’t always make them fill out a ticket!!!)

3.     Create a way to resolve some problems outside normal channels

Some rooms were unavailable for check until early evening, and to find out if your room is ready, you wait in a 15 minute line. Many of us won’t accept that, and figure out another way, reducing the inconvenience to our families. But most people just do as their told, and this was a major inconvenience. Crying kids. Cranky parents. My point isn’t to insult those people; it’s to illustrate what next year’s conversation sounds like when they discuss whether to go back. After all, their money is just as green as ours.

The background check parallel? 

Have some of your capacity, your labor dollars, set aside to resolve problems outside the channel. Bottlenecks can occur, and you don’t want a problem that significantly impacts revenue or probabilistically lowers future revenue, stuck behind others.

It could be a compliance problem, an Ops issue, an IT challenge. Whatever. Just have a set aside workflow to extract and resolve some things a little bit differently when the situation demands it. Will that cost you money? Yep. Worth it? Every penny. 

Why? This lowers risk of client defections. I can’t tell you how many times I or our team pulled an employer from a competitor because we had creative, non-traditional solutions to problems they had with our competitors. Instead of having a similar approach but trying to unconvincingly explain why ours would be so much better!!!, I instead proved why a different approach both lessened the frequency of the problem and quickened resolution.

4.     Have a healthy respect for the competition

This water park is within 90 minutes of three large cities. There are a lot of options for entertainment dollars. Yes, I know unemployment is low and it’s hard to find workers (at the price you want to pay them!). 

But an operation is only as good as how it makes its guests or clients feel. They did a good job, but good enough to stand out against the competition, each and every time?

The background check parallel? 

Large CRA’s know this, because they have them, but for smaller and mid-sized CRA’s, I don’t know if there’s full appreciation of just how many salespeople are in our space. 

Many CRA’s have ARMIES of salespeople who want to take each and every one of your clients. It’s the position EVERY shop is hiring for. You simply have to keep your dollars and clients under your roof. 

And for the dollars that leave, you need to replace them with a combination of new clients and new sales to existing clients. How will you do this in the face of competitors calling your best client every day? 

5.     What can be versus what is…

I mentioned opportunities for this waterpark to re-position team members for peak times (lunch, coffee) This business had enough staff to run the park but not enough staff to run it when and where it was needed. Lean and mean on a spreadsheet looked great, but it also meant gaps and missed green during the day. Ours anyway. 

What’s the background check parallel…

I’m constantly thinking of the “what if”, and often challenge assumptions I hear inside shops on what they’re capable of and the overall state of our industry.

CRA’s who cut their margin to the bone and quote $30 because they think they can’t get $35 and thus leave a million dollars on the table. Or a million dollar technology spend because they feel every prospect signs if TAT is 26 hours and every client leaves at 31.

I’m extremely bullish on any CRA’s ability to serve clients, stay compliant, and make a lot profit. But cash is king, and a lot of shops either don’t get it or burn through it, for the wrong reasons.

I’m sure this waterpark felt they had a great winter break. There was no overt operational failures. Mediocrity is the canary in the coal mine.

But they also lost money customers would have willingly spent, in the moment. And in the long term, they lost money because a % of customers won’t come back, who otherwise would have. But they, like a lot of us, will just motor along, not realizing what CAN BE.

That’s the single most common challenge I see inside a CRA. When things don’t seem too bad, there’s no crisis, and no urgent need to try and improve. And that’s where growth, revenue and profit most often go unrealized. Growth and profit that can be unlocked. You just got to look for it! That’s how you build an empire. 

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Kevin Bachman is The CRA Doctor, and host of Background Check Radio, a podcast focusing on employment screening issues and industry leaders. He is a background check executive providing financial, strategic and operational solutions to owners and senior management of CRA’s and data providers. He also helps employers create optimal screening programs and find the right CRA to fit their needs and budget. He is available for speaking engagements and onsite training sessions and can be reached at [email protected] or 216-509-2108.