Growing a business can be exciting and fun. It can also be challenging and demanding. Investing in sales, marketing, operations, product and finance may require additional investment, changes to employee roles, bringing in new people, new premises, more focus on process and reporting, more customers to look after, increased risk to cashflow and a host of other challenges to be faced.
The more prepared you and your team are to face these challenges, the better placed you are to be able to sustain profitable growth over the long term. Spikes in revenues, sudden increased demand from new customers and un-forecast costs to support growth can drain the tank and put sustained growth at risk.
That’s why predictable growth is so critical to start-up, early stage and growth companies. Predictable growth stems from being able to forecast revenues ahead of time with a high degree of accuracy. A customer who may (or may not) repeat buy at some point is not as valuable as a customer who is contracted to a multi-year subscription.
Being able to accurately forecast and deliver sustainable growth not only smooths out the lumps and bumps of scaling, it enables business leaders to maximise profitability and minimise disruption and risk to the business and ultimately build more valuable companies.
Additionally, Founders and CEOs who have proven that they can deliver predictable growth should be rewarded with more favourable terms when it comes to raising new funding.
There are a number of factors that are key to driving predictable growth.
1. Value Proposition
Establishing a direct connection between your customer pain points and the value that your product or service delivers is a critical step. Having a deep understanding of your customer’s current situation, the challenges they face and the time, cost or impact on their business and personal lives is vital to learning whether customers will pay for your solution. And whether they will commit to a recurring payment.
Consider the frequency and impact of the problem that your product or service solves. A customer will pay more for a solution to a big, long term problem than an occasional mild frustration.
If the customer has an ongoing pain to solve, they are more likely to accept paying on an ongoing basis such as a monthly subscription. Many products and services can be sold via monthly payments, for example we used to buy printer toner only when we ran out, now we can subscribe and have the toner delivered before a replacement is required. Even one time capital purchases (eg a car) can now be bought using monthly finance repayments, making it easier to afford out of monthly pay check. Problem solved.
How much of your customers pain does your solution solve? Naturally customers will have a range of options, including ‘do nothing’, work arounds and alternatives to your product (and your competitors). The better the fit between your product and the customers pain – the more likely they are to try, buy and stay with your solution.
By defining a unique value proposition that differentiates your offering and solves your customers pain on an ongoing basis, the better.
2. Intelligent Process Automation
It’s all too easy to recruit marketing, biz dev and sales and point them at a market, and then wonder why they struggle to deliver the numbers.
Predictable growth does not happen by chance – it requires careful planning, time and investment to make it work.
Map the customer journey in as much detail as you can. Very few long term customers simply search online, find your product and whip out their credit card. More valuable, longer term customers who are prepared to commit an ongoing monthly fee, will take longer and be more diligent with their product selection.
Think as a customer would. Walk through each step from initially recognising the problem, deciding that the problem is worth solving, investigating options, getting approval to research solutions, evaluating products, shortlisting, building a business case, getting approvals, making a decision, contracting with a supplier and implementing a solution.
For some businesses this process might be just a few simple steps with one or two people involved, but for others it may be more complex, with multiple decision makers who all need to be convinced. Even for consumer businesses, there is a multi-stage decision making process. Make sure you understand it and document it.
Consider which steps you can influence and which you can’t. Educating customers who are at a very early stage of the process can be costly and wasteful. There may be a larger competitor who can highlight that there are solutions available to solve the customers problem? Equally, you may decide that you will only try to engage with the customer once the start their online research – or even once they have made a decision to purchase a solution. Unless you have deep pockets, focus in on where your budgets can create more influence.
Only once you have documented this customer journey, should you consider what can you do to automate the process. Automation not only delivers process efficiencies and releases your team to focus on higher value tasks, it gives you the performance data to help you intelligently optimise the process.
Take a look at social media platforms, marketing automation and CRM. Most can be deployed quickly at relatively low cost and many integrate seamlessly, so that you can map your end to end documented customer journey and streamline the process.
As your customer enters your automated sales process, your tools should be able to score the prospect (how well do they fit your target customer personas) and opportunity (how likely are they to convert, when and how much will they be worth)? This will help your team focus on higher value targets and automate lower value but necessary actions.
Your automated process will also help identify bottlenecks and process inefficiencies. Are you getting enough website visitors and are they converting? What per centage of your sales calls turn into deals? Which steps in the customer journey do you need to focus on improving?
3. Content Strategy
With a deep understanding of the customer journey and a fully automated process, take a look at what content will best help the customer progress to a solution that meets their needs.
Again, put yourself in the customer’s shoes.
At the earliest stage of their research, overt sales messages are likely to be off-putting for many. However, an educational article explaining the range of options available to people in their situation may prove more valuable – so long as it’s from an impartial stand point. A thought leadership piece such as a White Paper also provides an opportunity to establish trust. Making this independent / neutral content available through third party sites eg social media, industry analysts, 3rdparty blog sites only adds to your credibility and by implication should result in more and better quality traffic to your website. Your product or service will not solve every prospects problem – however taking a ‘trusted advisor’ position should build trust.
As a prospect learns that there are viable solutions available to solve their pain points, they are likely to need to delve deeper. This will be at their pace – not yours, therefore timing is un-predictable. So this is where marketing automation helps maintain a relationship and identify the messages that will trigger the next step in the journey. With accurate data derived from ongoing marketing programs, leaders can decide how much marketing activity is required to achieve a specified number of qualified leads.
Businesses need to focus on explaining their offering, credentials including relevant case studies, why the product or service is likely to solve the customer’s pain points better than alternatives and competitors.
Only if your content resonates at this stage will potential customers start to engage more fully. And when they do, they are likely to be actively seeking a solution (ie ‘sales ready’) and not at the unpredictable research stage. This may be when a sales qualification call or product demo is required – ideally tailored to meet the customer needs. As the customer will have conducted their research and shortlisted vendors to speak to, they should be more open to sharing their requirements, budgets and time-scales. This makes them a more valuable prospect with a higher potential to convert.
Content at this stage of the process is likely to focus more on making it easy for the customer to buy from you. How do you compare to competitors, is there a free trail, how does the pricing work, how would the product fit with the customer’s organisation and many other factors.
By developing a robust content strategy and producing high quality content for each stage of the customer journey, companies have the messaging that makes it easier for a customer to select your solution rather than competitors. By distributing the content efficiently using the marketing and sales automation tools, business leaders can monitor and refine sales efficiencies and accelerate sales velocity.
4. Team Alignment
Inevitably small team may have to cover multiple roles, but larger teams can specialise into content generation, marketing, business development, sales and a range of other functions. Critical to ensure the team is aligned to deliver predictable growth is to define and report on a small number of key performance indicators (KPIs).
Make these KPIs relevant to the stage of the customer journey and role. If website traffic is a key stage of the journey, then who is responsible for generating this traffic and how much traffic do you need? If its sales demos, then who owns this and how many demos are needed to achieve the necessary sales.
With the team aligned to deliver relevant KPIs using the marketing and sales automation tools, the tam should be able to optimise their own processes and procedures and drive more effective results.
5. Refine & optimise
Set regular team meetings to review performance and agree ongoing improvements. For example, how does the effectiveness of content degrade over time? By analysing conversions from each piece of content over time, you will quickly be able to define how often you will need to produce new or refresh old content. Which distribution channels are the most effective? How long is the sales cycle? Can the sales cycle be shortened by analysing typically sales objections and providing answers earlier in the process. Where is the leakage in the sales process? Do potential customers walk away when they see your pricing or take a demo? How to stay and nurture a potential customer in a long sales cycle without distracting the sales team from closing near term deals?
Make incremental improvements to content, distribution and process. Experiment and test continually. With more and more data, learn and refine. Unblock bottlenecks, improve content, streamline inefficiencies. Capture results, start again.
Do you have predictable growth? What worked, what didn’t? Are you looking to grow sustainably over time?
Building a “predictable growth” engine requires time and effort. But once in place, it is incredibly powerful. There is no magic bullet. But by investing time and focus, these five steps will set your business on the path to predictable growth.
To do some of your own research, take a look at David Skok’s blog (https://www.forentrepreneurs.com) and Aaron Ross’s website (https://predictablerevenue.com). They’re true pioneers in this space.