Innovating Like a Virus
The fast fall finish is here, and after a quick inventory of the issues facing our clients right now we will outline a few and what we are doing to solve them. We think you will be able to relate and hope we have a solution or two that will help. If you have an insight of your own please pass along your thoughts here.
Current Issues Business Owners Are Facing
The Issue: We are innovating and have a few of the right customers, but getting more of the right customers can be slog.
“They treat us like a virus until they take the time to really look at it and then we are the cure.”
We thought this quote from a sales rep really nailed it. Your offering is treated by the buyer like a virus until it’s the cure. The enterprise buyers really have a lot on the line when they are making a decision and the switching costs can be significant. They are right to be thorough, the stakes are high.
Consider a three point solution that is working now:
1. Write about the pain the customer could be experiencing now in a manner which fits their attention span when first learning about something new. Don’t drop War and Peace on them when all they want is the 411. They should able to get the gist of what you do in less than 30 seconds and then have the ability to review for up to three minutes with your writing or video content.
2. Give them an example of a current customer similar to them and how it is working. The Case Study example can be a challenge if your solution is not focused, but start with three typical customers and walk them through the experience. This should be no more than a three to five minute commitment for the buyer and it will help them relate to your other customers.
3. Make the first dialogue option as short and sweet as possible while still having enough in it for you. Unless you are in charge of acquiring thousands of customers a year you really don’t need to be too concerned about tracking the first two data points in this example. You should be aware of the numbers but your first real leading indicator to track religiously are first time dialogues with a prospect. We suggest you use a 30 minute discovery call and really focus on the needs and outcomes desired by your buyer before you launch into your solutions.
You should be updating your writing on points one and two at least twice a year, tracking your first time calls and asking the team why is this working or why isn’t this working on a regular cadence.
No Thanks, We Got This Taken Care of In-House
The Issue: When your job is on the line, sometimes you would rather have an employee working for you than a contractor. The doing it yourself vs outsourcing it tension is very real in today’s economy.
Employees are expensive, and yet the “at-will” contract creates the ability for the best to turn the table on the employer and leave on a whim. This often leaves only the average to poor employees who want to stick around to handle mission critical tasks.
If the boss has their bonus or job on the line, sometimes they deal with attrition issues and building the team internally because they feel like they are more in control.
These biases mean that if your company's offering is in any way reducing head count and outsourcing a service or skill, you had better be the A team.
Part of getting someone to let go of control is to help them understand where their time could be better spent if they didn’t have to worry about the problem you solve for. You can accomplish this by asking them to list out the top 10 things they deal with at work on a weekly basis, and then ask them which one has the biggest impact on their P&L.
Chances are they are spending time doing and overseeing a series of low value-add objectives. When you can take those off their plate and allow them to refocus on their high ROE objectives you are making a different case for your joint success.
For more on this topic click on the graphic or click here for a case study article from Distillery Tech.
Is It Time To Buy or Sell?
The Issue: Should we stay or should we go?
Business transactions are a big part of the reason we are hired. Sometimes it’s to guide the company to an exit and other times it’s to help them with an acquisition.
In the age of disruption, the size of your balance sheet and a clear understanding of how long you can protect your margins can help you answer the question of whether you should be a buyer or a seller. An additional factor is the age and motivation of the ownership.
Can’t get your customers’ attention?
A big challenge for many companies is the attention span of their buyers: it’s really short and they struggle to keep it. Going back to our earlier example, the people who might do business with you think you are marketing a virus, while your customers know you have the cure.
The largest player in your space doesn’t have this problem, their brand gets them in the door. This can become a significant competitive advantage. If the amount of time that the buyer has is limited, it is, and they are already doing business with that company, which they probably are, then you might want to consider locking up a couple of key accounts and then taking it to that larger player and allowing them to monetize it for you.
John Chambers started at Cisco in 1991 and led one of the strongest sales cultures in the world. Cisco then took its sizable balance sheet and has purchased over 200 companies to feed its sales force and their customer base. Here is a white paper from the company on their acquisition process.
Does your industry have an aging set of owners and no clear dominant players?
If so and you are between 30 and 50 years of age, you might consider becoming an acquirer of these businesses. A great example of this is in the financial services industry. The wealth in the United States has typically been advised through either banks or brokerage firms. In the last 15 years the rise of the independent Registered Investment Advisory firm has fragmented the industry while it has continued to grow in line with the wealth of the country.
High Net Worth individuals and medium sized nonprofits will attribute trust to an individual easily and this has allowed yesterday’s Morgan Stanley advisor to become today’s Registered Investment Advisory business owner. With most companies offering similar services to their clients, and the clients’ reticence to discuss their wealth with multiple people, turnover remains low. The term “client for life” is often used in this industry.
However, the advisor does end up retiring, lives do end, and the assets and their associated fees and revenues leave. Some advisors don’t plan for this and they wait until the last minute. Others plan ahead. If you are in the middle of your career it can be a great way to grow your customer base.
This is especially true if you are struggling to acquire new customers of your own. Your revenue per customer will be lower as you will be sharing that with the seller for a period of time, but if you establish trust with the customers and their dependents the life time value of the customer should make the cost to acquire that customer worth it.
The Lesson: when growth is slow, acquire older players and recruit young service professionals.
2019 has been an extremely active year for our clients and their businesses, if you need help solving for any of these issues or feel like you might benefit from an outside voice, we welcome the chance to speak with you.
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