Situation: The CEO of a service company needs to expand its market base due to concerns that a significant service and referrals partner may decide to stop working with them. A break-up would have significant impact on salaries, effort and focus. The company’s priority is to expand client growth to minimize the impact of a break-up. How do you expand your market base?
Advice from the CEOs:
To expand or build a market requires a champion. Someone like the company’s founder who has the passion and contacts to build new business.
Second, incentives must be established to reward success bringing in new clients. These incentives must have teeth – no success, no incentive. No safety valves.
Third, create a plan to support the new business development – including marketing, event attendance, etc.
Initially, be selective and target just a few highly desirable new clients to test and refine the client attraction model before expanding to the broader potential client audience.
Build a set of case studies of services and results for new clients.
Track and prove out the profitability and workability of this model.
How should the effort to expand the market base be constructed?
Start with preparation. Research the current prospect list to assure that they are good prospects. Also look at the current company culture – do the company’s strengths align with what is needed to attract and serve new clients?
If the research shows that a significant number of prospects are different from current clients, think of this as a new channel. Create a different business unit to specialize in serving these clients. Hire a team to focus exclusively on the new client group, with proper incentives tied to achievement with these prospects.
Another company had a similar choice. They created a program to increase their market base and went after it with full focus. It took five years to accomplish vs. the two years that they had planned. Nevertheless, the results have been worth the effort and expense. If the company believes in the model, invest in it.
A CEO is concerned that her company does not have enough new prospects or
business on the horizon. New business opportunities appear sporadically but not
predictably. She asks how others schedule their time and effort to bring in new
clients. How do you maintain a robust pipeline?
from the CEOs:
Devote a regular amount of time to business and relationship development. Even when business is busy it is important to have the discipline to devote 4 to 6 hours per week to new business development. Schedule this time and fill it with activity. Occasional networking doesn’t work.
What differentiates a company is its brand. If new business comes from referrals, turbo-charge this by becoming the information hub for the referral group. Make it easy for others to make referrals.
There is a hierarchy of things to do.
Stay on potential referrers’ radar screens – monthly or quarterly awareness marketing to referral sources.
Spread awareness of best practices in areas where the company has expertise.
Make best practices relevant with situational stories.
Think in terms of a target.
Where do most referrals come from? This is the center of the bull’s eye
2nd Ring – 2nd level of referrals
3rd Ring – 3rd level of referrals
Network more with contacts at the center of the target – they know clients in need of help.
There is a lot of information in the cloud that is relevant to the business – personnel moves, hiring, firing, etc. If you it is possible to track this, it can help.
LinkedIn can help. Look for 1st and 2nd degree links to individuals of interest. For example, you want to meet a CEO who on LinkedIn is a 2nd degree link. Request a warm introduction from a 1st degree link between you and the CEO.
Think of LinkedIn in terms of rifle shots, not a shotgun approach. This makes it both more manageable and more valuable.
Situation: A CEO is struggling to manage conflicting demands from a key foreign client. The client frequently changes targets and priorities; however, the performance contract with the client does not allow variations from plan. In addition, the CEO and client have different expectations concerning ROI. How do you manage conflicting demands from a client?
from the CEOs:
or access expertise from an individual who knows both cultures to coach you on
intercultural communications. This will help you to avoid inadvertent miscommunications
where your well-intended queries are negatively interpreted by the other party.
interpretation is an increasingly important factor for multi-national business
there elements of the client’s structure and the agreement with the client that
offer significant benefit, but which are underappreciated by company staff?
to funding or allowance on expenditures that allow the company to increase
staff to meet company demands?
that staff are aware of these benefits and how critical these can be to the
company’s, and their future growth and income.
with the client’s leadership to outline the conflicts that the company faces
meeting the client’s needs and demands. Explain to them how these conflicts are
compromising the company’s ability to meet their needs. Once the conflicts in
priorities are clearly expressed this may help the client to understand and
resolve the conflicting demands.
may involve a considerable personal risk and cost to the CEO. However, if the
effort is successful it will, in the long-term, benefit both companies.
A CEO wants to significantly grow his company, either to prepare for an IPO or
to become an interesting takeover target. However, he struggles with
delegation. When responsibilities are delegated, the job isn’t done to the
CEO’s satisfaction and he ends up doing the work himself. He asks: what is the
CEO’s job? Is it for me?
from the CEOs:
order to grow the company to the desired level, it is necessary to hire
competent people and delegate. The most important position will be a COO with
deep experience organizing people and functions.
CEO’s role is to provide the vision and strategic objectives for the company.
The COO’s role is to assure that the right people are in place or hired to do
the work necessary to realize the vision and operational objectives.
CEO-COO relationship will be pivotal. If there are specific ways that the CEO
wants to see things done, these must be clearly delineated in discussions with
role of the COO will be to organize the company to reach the growth objective.
a competent, talented HR person to plan the organizational development road
map, and the positions that must be filled in stages to reach the goal.
growth plans of the company are ambitious. Absent significant change, growth
will be limited to a fraction of the current objective.
with the COO and HR person, build the organizational chart for the size company
that the vision imagines. Fill the chart with current personnel where the fit
is appropriate. Determine where the gaps exist and build a plan to hire these
people in stages.
E-Myth Revisited by Michael Gerber provides an exercise to accomplish this.
a high-level assistant to help in areas where the CEO finds it difficult to let
go. This will be another key relationship and will be important to learning how
to let go.
a CEO coach.
will likely be an individual with significant experience who has achieved the
growth envisioned by the strategic plan.
CEO Coach will help to draw lines between delegating and micromanaging and will
help the CEO to learn to effectively delegate to qualified people.
Situation: An early stage company has assembled an impressive team and has a solid service offering. The immediate challenge is bringing in clients to fuel growth. The team has the capacity but needs some creative ideas on where they should focus their efforts. How do you fuel early stage growth?
Advice from the CEOs:
Fully utilize the team’s talents. Team members with established expertise can offer clinics featuring the company’s service offering at local colleges, business organizations and other venues to target audiences. Think about business organizations with members who would benefit from the company’s services. Also reach out to venture capitalists and the entrepreneurial market.
Develop a strong value proposition:
Eyeballs on the market
Links to highly qualified resources
Demonstrated expertise in your space
Claims tied to the top priorities of target clients
For start-up and entrepreneur client targets:
Offer a packaged set of services for a fixed fee. Be open to creative payment options to fit the financial needs of entrepreneurs.
Start developing a full suite of services. Start by assessing the need and developing a target list of early clients. VC portfolio companies can be a great target.
Build a good web-based communications interface for client use. Think of what is needed to create an attractive menu and let this drive service development.
Develop a separate brand for ancillary services that will complement the current offering, but which is outside of the current offering. Look at markets which would benefit from the service, including medical and nursing providers.
Situation: A CEO is concerned that his company’s sales and marketing efforts are not effective. Too often the sales team finds a good prospect, but fails to convert them to the company’s offering. How can the company improve its sales conversion rate? How do you optimize your buy/sell funnels?
Advice from the CEOs:
To improve both your marketing and sales functions, it is essential to move the company’s perspective from the Sales side of the Seller’s Funnel to the Marketing side of the Buyer’s Funnel. Only by understanding your customers can you:
Create awareness of their needs,
Acknowledge interest in a solution to their needs,
Consider options and develop preferences among the possible solutions, and
Determine how to effectively communicate with them through your marketing and sales efforts.
In today’s world, a quality web site is essential to your business. The objective of the web site is to convince the customer that they want to talk to or do business with you. Your web site must tell them:
Who you are.
What your values are.
Why you are special.
And it must include a “call to action” – a convincing reason for them to call you.
To better qualify your prospective clients:
Develop a scripted telephone interview that can be conducted by your sales people or less expensive inside sales/marketing people to qualify prospects before you spend the time and effort for an in-person sales call.
Use targeted marketing programs to leverage references to prospective customers.
Have lots of conversations with potential customers to understand their needs. Tailor your value creation process to address these needs.
Special Thanks to Craig Olson of MXL Partners for his contribution to this discussion.
Situation: A professional services company has developed a new trial offer to promote their services to prospective clients. The offer includes a discount for an initial evaluation accompanied by a discount on services should the client choose to proceed with recommended solutions. They seek guidance on whether this is an effective approach. How do you craft and effective trial offer?
Advice from the CEOs:
The suggested approach is similar to what others offer to new prospects, but only goes half way. A discounted offer only works if you’ve convinced the prospective client that first, they need your services, and second, that there will be a positive financial impact to their bottom line if they agree to your trail offer. You need to add recommendations that will demonstrate a significant short term financial benefit.
Target your message. Give the prospect a reason to spend scarce dollars now.
Offer to apply all or some of the initial fee to future expenses if they contract you to solve problems that you identify in your initial review.
An example of a more targeted offer would be as follows – we will audit your accounts receivable as well as any debts that you’ve written off last in the last 2-3 years. Based on this audit, our past experience has been that you can boost short-term collectibles from these accounts by 30%. An offer like this demonstrates an immediate impact on cash flow.
Do you feel comfortable offering a guarantee? You will save the client $X over a guaranteed period or the service will be free.
Interview with Keith Merron, CEO, Avista Consulting Group
Situation: Ongoing uncertainty makes it difficult to clarify strategies going forward. What are the bases for these uncertainties and how do you manage opportunities in this economy?
The world is moving so rapidly that they key to success is differentiation. There is so much information about how to do this that companies start to look similar very quickly. The ability to stand out as different is critical. Ask yourself:
What is my target market?
What are the needs that my offer will satisfy?
What is my unique approach that is distinct from other solutions which meet these needs?
Once you identify the answers, you need to back these up.
One has the opportunity to write the future. If you can get one step ahead of the curve this is a huge advantage.
Products that died were often two steps ahead.
Successful visionaries see patterns that are emerging, sense what is next, and speak to that.
Because information is at your fingertips through the Internet anyone can set up a business. The Challenges are viability and sustainability. If these are present the opportunities are huge.
The web is a place where you can share information. How to monetize this is unclear.
Once you have a following you can offer things for sale that are valued by your following. When this happens, the potential for fast growth is more available than ever. So is the flip side. If a restaurant gets trashed on Yelp this can kill it!
In a recession, M&A activity is faster. This enables one to establish a presence much more easily.
There are many virtual companies. You no longer have to be in the same place to work together! There are also many ways to partner or co-brand via the Internet.
What’s hard is to create tensile strength in the relationship. Because it is so quick and easy to cobble together relationships, the biggest challenges are creating loyalty and commitment.
The needs are communications, motivation, commitment and follow-through – just like in a traditional company but in a virtual space. This creates a true bond.