Stop “doing” for a minute and let’s think together about the kinds of clients we actually need to have. It might change our lives.
The biggest challenge you and I face is keeping the ops and strategy beasts fed at the same time. It’s tough to know when to hit pause on “doing” so you can look down the road and figure out how to improve the business.
One thing you’re almost sure to find once you get off the treadmill? You’re spending a lot of time seeking tactical solutions to strategic problems.
Let’s talk about this in context of revenue: When your numbers are flatlining or not growing at the desired pace, it’s natural to default to the quick fixes of lead generation services, CRM tools or hiring sales hunters.
This didn’t work for me. It won’t work for you, either.In the last few years, the kind of companies we’re engaging with has changed — all in service of driving more lucrative, full-scale engagements.
In the last few years, the kind of companies we’re engaging with has changed — all in service of driving more lucrative, full-scale engagements.
Three major things drove this:
1) An Unsentimental Accounting of Which Clients We Actually Needed
The clamor for new business is common. An understanding of which business we should seek, and why, is rarer.
I often talk to senior leaders who feel bound to the revenue generated by a major (or sometimes minor) client, but aren’t viewing the relationship in context of profitability.
What if the client sucks major resources out of the organization and disrupts your company? In one instance, we found that the company’s rainmaker had no time to network — something she was really good at — because her energies were always diverted to an unprofitable account.
What was missing? An understanding of what a good client really looks like — beyond just hustling to sign somebody up.
We were fortunate enough to work recently with a couple of super bright guys who really got this problem in the context of profit strategy.
They had built a platform for professional real estate photographers and were off to a good start in their niche, offering superior hosted virtual real estate tour functionality for thousands of photographers.
But the company is also an R&D and thought leader with ambitions to reposition as a “total business platform” for a more ambitious breed of customer.
We did some collaborative messaging work with them and translated it into multimedia sales campaign (email, phone and LinkedIn outreach) messaging designed to get the market pivot off the ground and help instill a sales-oriented culture across the company. Selling a total business platform requires a different sort of sales conversation than signing up a client for a photography presentation service, and these guys knew it.
The new messaging and consultative sales approach has shifted their customer mix towards the high end — the average size of a signup since the new website came out is up approximately 110%, and they are signing more high-value customers, allowing them to better focus their energies. Year-over-year new customer acquisition is higher than it’s been since 2013.
Keep the salient point in mind here: The typical mistake people make at this phase of a company is rapid hiring with an eye to getting sales in high gear. That’s an operational solution prior to attacking the true strategic challenge.
2) A Mindset Shift About How We Prospect and Engage
I came to the realization that most of our clients were small marketing agencies and weren’t a good fit for KSP’s services. I sell a ready-to-go, agile sales department. But we kept falling into the trap of saying “yes” to limited-scope engagements because these clients really weren’t ready to fund a mature sales function.But we kept falling into the trap of saying “yes” to limited-scope engagements because these clients really weren’t ready to fund a mature sales function
This meant we were starting all of our engagements in handcuffs: With limited bandwidth, we were both set up to fail. (I’m trying to quickly install a sales engine; I can’t sell a transmission a la carte and expect to get anywhere.) Some of my clients desperately needed closing muscle, but didn’t want to pay for consultative selling help. This should have been a non-starter, but in some cases, we took the business and hoped things would work out. They didn’t.
Realizing this helped get us out of the “run and fetch” vendor situations in which so many companies find themselves. Our sweet spot is a company that has the budget and mindset to create a robust sales function, bigger than small agencies but still typically a small, privately held business (we avoid clients where we’d be seen as another “vendor” rather than a strategic partner empowered to tell them what you really need, not just what they think they want.)
3) Committing to Enhanced Capabilities…Yesterday
By the time I publish this article, I’ll probably have a different company than the one I started writing about in this series.
That’s because committing to our new breed of client means a lot of capabilities have to get shored up, fast. We have found that our clients often suffer from a mismatch between what they’re selling and what their best buyers want to hear. So that meant onboarding a specialist in analyzing product/market fit so that sales campaigns have a bombproof point of view on the market from the concept stage forward.
The second problem was closing ability. I had several solid, polished business developers who weren’t that good at closing in the context of change management or complex enterprise sales.
Got the above two covered. (I can think of two clients right now I would have lost without strengthening these capabilities. I can think of more that I’d still be working with had I figured this out sooner.)
As I write this, I’m in the process of onboarding a CMO who can make all our “sales first” marketing capabilities come together. I can already feel my company morphing into a more robust, one-of-a-kind provider once we get really good at marketing like SEO and digital PR campaigns.
Avoiding Reactive Client Acquisition
Without a business strategy anchoring client acquisition, you’re likely to drift into reflexive activity. The most important thing is not to compromise on quality. We want to offer a lower-cost alternative, but can’t find a way to make it work because whenever we leave out critical capability to fit inside somebody’s budget, results suffer.
Is this your problem? Maybe, maybe not. But there’s a good way to find out: Take a look at what an average new client is worth to you (on an annual basis) in the context of things like changes in your gross margins and sales ROI. Some businesses know their profit per client is an issue, but never stop to think about it in terms of sales.
We see variations of this song all of the time: Clients eager to jump into lead generation, but who go blank when asked about the most profitable industry niche for their services. Or the maker of a truly innovative solution whose low sales target every month was driven by a business strategy with serious flaws. “Getting new meetings” won’t fix this kind of stuff. The problems lie deeper.
You’re likely to sign the wrong kind of client — who will run your company instead of the other way around — until you undertake a structured approach that ties together business strategy, account strategy, marketing and sales.