There is an old saying: A business must grow or die!
In today’s tough economy, company leaders need fresh ideas about how to grow their organizations’ sales and profits.
Otherwise, an expert in growth strategies believes small businesses will fail.
In his new book, Growth or Bust: Proven Turnaround Strategies to Grow Your Business, Mark Faust, principal at Echelon Management (http://www.EchelonManagement.com), offers several strategies for how companies can grow their business.
Says Faust: “I ask every leader how much untapped potential they think is within their existing customer base. The answer is always significant, yet few take the time to go beyond selling interactions and just talk with the customers in an open-ended dialogue about the customers’ perceptions, potentials and problems.”
Here are some of the options Faust suggests:
Offer Options and Go Big: Along with regular offering, companies should begin strategically offering larger options (asking for much more of the customer’s dollar than they are currently) and a percent of the time they will bite. This one tactic has increased sales by 25% for companies.
Begin a Continuous Innovation Process: The most valuable action in business is the process of innovation. It is as simple as prioritizing the company’s top constraints and collecting or brainstorming list of solutions and prioritizing them for implementation. For as simple as it is, it seems to be the last thing leaders in business and entrepreneurs want to do, they are too lazy to ask a few questions and think of possible answers. Faust adds that he has “yet to facilitate an innovation process at a client of $20 million or more and not identify seven figures of potential savings or incremental revenues within 90 days.”
Consistently Conduct Depth Interviews: One of the most valuable aspects of the strategic-planning process is conducting depth interviews with customers. The objectives are to find out what they like and dislike about the company, the competition, the services that approach their situation, all discussed in a way to find points of innovation, improvement and even incremental sales opportunities. Peter Drucker deemed the process of depth interviews as a required part of the strategic planning process, yet few actually do it.
Faust says that he has interviewed thousands of customers for hundreds of companies and “never have I failed to hear of significant untapped incremental growth, that sales and marketing were looking over.”
He offers an example of one instance where a $500 million client’s (formerly Entex of Mason, Ohio) top 80 customers disclosed to him that more than $200 million in services that they would be willing to buy if the client just started to offer them. They had been offering those services for two years. Sales and marketing were too lazy to offer services that these customers already wanted to buy. Faust says, that “the sales team was ‘happy enough’ with the commissions they were making. $125 million of that $200 million was realized within 18 months and the value of the company shot through the roof, and the owner sold it for a greatly enlarged, pretty penny.”
Prioritize and Manage the “three Target 20’s”: For all the talk about “making that one extra call per day/week” far more valuable is taking just a couple of hours every quarter or month to review the top 20 target new customer opportunities, top 20 connector relationships, and top 20 existing customers with growth opportunity. Setting objectives around the optimal frequency of contact and call objectives can greatly accelerate sales effectiveness.
Using the Ultimate Referral Tool: Using the above-mentioned “Top 20 Non-Customer” list (and it can be must larger than that) hand a copy of that list to a customer or connector and just ask, “whom do you know on this list?” The answers given will open doors. A multitude of sales reps at client companies who have set goals to show this list three to 10 times a week have doubled six-figure incomes.
Begin Regular Echeloning Sessions: Holding a monthly or quarterly meeting where sales reps exchange the following three things has increase growth rates by 50%:
- Top success others can learn from.
- A new idea that any of the individual reps could implement to increase sales.
- Top concern, question or issue that the rep wants help in solving from his team.
The last two must be around issues that the sales reps have control over, not areas that home office controls, as this isn't intended to be a gripe session. After each rep presents his or her three points, they go under a ban of silence. Otherwise, if they critique ideas, the comments will dry up and stop.
Finally, Faust says: “I think the most important growth strategy is implementing an effective ongoing innovation process. Innovation is the mother of all growth strategy, but fostering the culture and facilitating the ongoing process is one of leadership’s top mandates.”