How to get back to growth
Finding new business has always been tough. Throw in a global pandemic and the worst recession in living memory, and it seems impossible. Even well run sales teams are finding it difficult to maintain momentum because they’re all working remotely.
Because of COVID, there hasn’t been the usual training. And pent up holiday demand has added to the difficulty. Many of my clients have told me that August was a write-off with so many staff and customers away. It’s hard enough in normal times to keep sales going through summer. This year so many people have delayed their holiday that businesses have been running on skeleton staff.
Now it’s September, the kids are back at school and you may even be back in the office. Perhaps not if you’re in the UK but in Italy, Spain and France you probably are. It’s time to get your growth back on track but how, when it’s so hard to win new clients? Well, I’ve been there. It was during the recessions of 2001 and 2009 that I scaled two business to £30 million turnovers from zero. Here’s what worked for me.
Review your customer experience
If you haven’t had a proper look at your customer experience in the last few months, do it now. You may find it’s changed quite a bit. Focus on all the customer touchpoints – in sales, customer service and support. Is your invoicing ok? How easy is it to do business with you? Get hold of all the templates you use. Put them end to end to see if they’re consistent and make sense. Notice where you’re introducing too much friction and the customer experience isn’t where you want it to be. Make plans to change these areas.
If you haven’t already, put in a customer satisfaction survey like NPS®. I really don’t care what your current score is. The important thing is having a vision for a world-class score from a small sub-set of your most important customers. Work out who they are – it’s not unusual to find the top 5% of your customers are responsible for a large amount of overall revenue. Focus on them and make sure you’re asking for feedback at least once a quarter. Sometimes businesses say to me that people aren’t replying to their survey. Well, get on the phone then! Show them that this is important.
And while you’re at it, make sure you report back to them to tell them what you’ve done with their feedback. Maybe do this in the form of a letter from you as CEO, thanking them. Tell them that you’re trying to make yourselves easier to do business with. This will blow them away. I can tell you that only a small number of companies do this and it’s dynamite.
Set up a customer sounding board
Wherever I’ve been MD in the past, I’ve taken our top 20 customers and invited them to a half-day event. Every quarter without fail. This is great for building relationships and getting valuable feedback. Ask them, if they ran your company, what would they change. What would make you easier to do business with? What do they buy from others that they could buy from you? What’s going on in their business or sector over the next 12 months and are there areas where some input would be useful? What do they think about your staff and are there any things that are driving them mad?
Get your executive team to run these sessions so they can build an emotional connection. People need this more than ever right now – remote working and email can really fracture relationships. Make sure this isn’t happening with your most important cohort. And remember they’re much more likely to cut you some slack in the future if you’ve built up some emotional collateral.
Focus on reducing churn
Did you know that reducing customer churn by 5% can increase your profit by as much as 85%? That’s huge. This was the biggest single factor in our growth at Rackspace. And yet, too few businesses give this the focus it needs. If it’s difficult to find new customers, you need to do whatever it takes to keep your existing ones.
Keep laser-focused on your top cohort and make sure you’re doing at least one thing every quarter that creates a positive memory. The eminent psychologist, Daniel Kahneman, won the Nobel Prize for his groundbreaking work on memory and how it’s laid down. He showed that people more readily remember something that creates a strong emotion, either positive or negative. By focusing on creating these moments of excitement, you will inoculate your business against service failure and make renewals more likely.
Ah yes – renewals. If a customer buys something from you up to six months before they’re due to renew, you can bet you’re going to retain them. If they don’t, it’s a red flag. Make it part of your plan to try and sell them something during this period. If they don’t buy it, go into overdrive to keep them happy. Their NPS score should also feed in. If they’ve given you a 9 or 10 in the past, they’re likely to stick with you. Any lower and you know you have work to do.
Don’t forget your ambassadors
Do you have a list of people that often give you referrals? Not just your customers but lawyers, accountants or ex-employees? Here at Monkhouse & Co, we go through our list every quarter. What could we do for these people to keep us front of mind? We’re deliberate about this because we know from experience. If they’ve given us a referral in the past, they’re likely to give us another. And when you get a referral from them, make sure you give them something in return – a small gift to show your appreciation.
Consider customer based penetration
Remember, existing customers are much more likely to buy from you than new ones. How many lines of business do you have? Somewhere between 1 and 10? Have you looked at each of your customers and their propensity to buy? There’s a great way to get to grips with this – I first came across it at the telecoms business, Daisy. Each of their lines of business is represented by a dot. They put a number of dots after the name of each of their customers depending on how many products they buy from them. This brings to life the potential for new sales in the company.
When you’re doing a review with a customer, talk to them about other clients who look like them but have more dots after their name. Ask them, ‘When are you going to buy x from us?’ Use the word ‘yet’. ‘You’re not buying x from us yet’. You’ll set an expectation at a subliminal level.
Work out who they’re buying these other services or products from and when their contract expires. Put together a plan. Maybe you need to bundle up products. I worked with Orange a while back. They’d found that to get a customer to move, they needed to sell a bundle of at least three of their five lines of business. Think big to push the needle further.
Gather competitor intelligence
It amazes me. So few businesses have a real grip on their competitors. When I first start working with clients, I find their intelligence is really poor. The executive team can’t agree on the identity of their top three competitors, let alone knowing what they’re up to. Knowledge is power. You need a complete picture of what’s going on in competitor businesses.
Take a ninja approach. Use the current uncertainty and volatility in the market to your advantage. Interview staff from your competitors. Even if you have no intention of hiring them. Remember your enemies’ enemy is your friend, so gather colleagues from competitor businesses to discuss market dynamics and the competitors you have in common. Their response to COVID might be different to yours so you may be able to spot an emerging opportunity. If an organisation is in trouble, go cherry-pick their best people. Now is the time to be hiring talented people with the right backgrounds. Talk to your customers – if they’re buying from the competition they could give some valuable insights.
Mystery shop your sales organisation
Double down on your sales activity, checking that it’s doing what you need it to do. I’ve been working on this with a client recently – we created a dummy brief and sent it out to their three biggest competitors as well as their own sales team. So interesting! You can look at your proposal versus your competitors and evaluate how it can be improved. As part of this exercise, we interviewed salespeople from their competitors and found they’d missed out on bids. They’d been oblivious that they were even happening! As a result, they had to downgrade their perception of their penetration in the market. It wasn’t where they’d thought it was.
What’s the customer’s experience of your sales process? Does it reflect your vision for your business? If a potential customer completes a lead submission on-line, do they get a ring back within the hour? How easy is it to book a meeting with you? A big pet hate of mine – someone tells me they’d love to meet me and then sends me their calendar link. Drives me mad! They don’t really want to meet me. Why am I doing all the work?
Find new channels and partnerships
One of my clients gets up to 95% of their new business through channel referrals. Potential partners might be vendors – Microsoft is responsible for huge volumes of referrals. And this isn’t only leads. The Marketing Development funds can run into millions of pounds. Another client, Wirehive, made themselves IT provider of choice for digital agencies guaranteeing them a large chunk of business. If you don’t have a channel, what could it be? If there’s a latent one, how can you turn it on to make it more specific?
Referrals from channels and partnerships tend to be more lucrative and easier to close. If you’re not tapping into this potential, make it someone’s job. They should focus on this and this alone. If the expertise doesn’t exist within your business, my advice is to go outside and hire someone who’s done it before. It’s a niche role. They need to know the right people and jargon. And what good looks like.