7 Mistakes Companies Make on the Way to Fast Growth
Summary: These seven factors are under your control -- don’t make these mistakes.
Scaling a company rapidly and selling it is both the dream of many entrepreneurs and an enormous challenge. The U.S. Small Business Administration Office of Advocacy estimates that of all the small businesses started, only about half are still around five years later. Existence does not mean they’ve achieved anything that looks like fast growth, but we all know stories about those that succeed, so we know it’s possible.
Any time there is great success in business, I believe a portion of that success can be attributed to the skill of the people leading the company and a portion to luck. Here I will summarize the most common mistakes I have seen companies make over the years that are within their control in the hopes that you can use this to identify areas to focus on to increase your growth rate.
No company has every area nailed down, but if you can identify two or three areas you can prioritize, you will find they function as levers you can pull to gain an advantage. A little work optimizing them can have huge impacts on your revenue.
#1: They don’t know who their ideal customers are
Just because you CAN sell to someone doesn’t mean you SHOULD. It’s tempting to sell to anyone who is interested in your offering, but once you identify who your ideal customer is, not sticking close to this type of customer slows growth. I know this is counterintuitive, but it’s true.
Every time you sell to someone who is not ideal, it takes more effort, there is more friction, and you generally experience less profit. It dilutes future benefits of having them as a customer like generating powerful referrals and case studies.
Who is your ideal customer? This organization lives at the intersection of three criteria: 1) easiest to acquire, 2) most profitable, and 3) derives the most value from your offering.
#2: They don’t know who the right personas are
Entire books have been written on this topic, but I’ll cover it briefly here. Different people within the organization play different parts in the buying process. For a relatively small purchase or relatively small organization, there may be only one buyer persona -- the decision maker. The larger the initial purchase price and the larger the company, the number of people involved increases rapidly. Who you spend time speaking with and what you say to them needs to be carefully considered.
The most important step in the sales process is to identify who the decision-maker is. It doesn’t matter how enthusiastic someone is about your offering if they cannot approach the budget. However, there may be other people who are critical to a successful sale, and you need to speak with them in a way that resonates with their highest priorities in order to engage them.
For example if you’re selling software, the CEO likely cares about the impacts on top- and bottom-line revenue over a 3- to 5-year timeline. The CTO cares about integration and security, The CFO cares about dollar savings of using your solution. Marketing cares about how much time the staff will save and how it will elevate the respect the executive team feels about their contribution to the organization.
#3: They struggle with the right messaging
Now that you know what types of organizations you should sell to and who within those organizations are part of the buying process, you need to deliver messaging to these people about how your solution supports their highest priorities in order to gain their engagement in the buying process.
Where do you start? You need to get really clear about what their pain points are and how your product is the solution to their problems, and then send the right personalized message to the right person through their preferred communication channel, whether content marketing, cold email, cold calls, social selling, snail mail or carrier pigeon.
#4: They don’t specialize their sales roles
The biggest fast-growth myth I see CEO’s buy into is that adding account executives (the people who have the skills to close deals), and working them harder drives sales growth. The reality is that account executives should not make cold calls. Why?
They don’t like it.
They are not good at it.
They are the most expensive sales talent, and you can get someone less expensive to do it.
They will ignore prospecting as soon as they have a pipeline to work, which creates peaks and valleys in revenue
So what is the answer? Dedicated prospectors – sales development reps, also referred to as business development reps. Until you have people who are queuing up deals for account executives to close, you don’t need more account executives.
Depending on the size of your company, you could easily have four or more specialized sales roles with different goals, and when all these roles are succeeding, you will be able to radically grow your business. To start, I recommend two roles:
Sales development rep: qualifies inbound and outbound prospects
Sales executives: closes deals and maximizes the value of the accounts
#5: They lack alignment between sales, marketing and product
When Predictable Revenue came out in 2011, if you could send a fairly well-crafted email to the right person and hit somewhere close to their pain point, you had a great chance at scheduling a sales meeting with them. It was the golden age of cold email prospecting because your meeting rate was limited by how fast you could find people’s email addresses and send the emails.
A few years later, sales enablement platforms like Outreach and Salesloft meant you could do this at scale, and companies that implemented these tools well often experienced great success. The problem was all the companies with access to these powerful tools who didn’t implement them well saturated decision-maker inboxes with spam.
Today it takes a lot more than a good email to get meetings with busy decision-makers. With most products, you need to execute a multi-channel approach that includes phone calls and even social selling. You need to have solid marketing in place, namely a great website that speaks to your target audience, a well-crafted content marketing strategy, and ideally, some sort of social proof in the form of case studies, testimonials, or quotes that show you can do what you claim to do.
Once you get sales and marketing in alignment, you need to keep them, as well as your product team, aligned with the marketplace and its changing preferences or conditions. I recommend regular conversations between sales, marketing and product leadership and make sure the execution of strategies is coordinated.
#6: They don’t use their tools correctly
I typically see three types of mistakes when assessing the tools used by a company’s sales team, and sometimes it’s a combination of these.
They don’t have tools
They have tools but they are not using them
They don’t use their tools correctly
If you want to grow rapidly, it’s essential that you use tools. Think about this. You wouldn’t even consider pounding a nail into a board with your hand or screwing in a screw with your fingers — you would use a tool. If you’re not providing your sales team with modern tools that enable massive efficiencies, you are falling behind everyone else in the marketplace.
Here is the craziest thing I see regularly -- they are not using their tools. With software, you need to configure it well and actually use it to experience the efficiencies available.
Sometimes it’s a problem with the tool. It’s not configured to the company’s successful sales processes, and sales reps are working around the tool to generate success. Sometimes a company doesn’t know what a successful sales process looks like and they need help creating one and configuring the tool to support it.
I know many salespeople don’t like having everything they do documented and providing management visibility into their activities (which naturally leads to accountability), but this is the only way to create fast growth. Sometimes there is a training issue, and the team just needs training. Often there are change management issues which require a cultural overhaul.
Finally, you also wouldn’t use a screwdriver handle to pound in a nail — you need to use the tool correctly. For example, getting HubSpot and sending thousands of cold emails to cold prospects is a surefire way to end up in spam jail and have your account temporarily or even permanently suspended.
#7: They don’t adapt quickly enough to reality
In the early stages of a company, conversations with current and potential costumes are priceless. Find out what they like and don’t like about your offering. If the market is telling you something, the sooner you pivot the better your chances of succeeding, acquiring more market share, or sometimes, even surviving. A “no” response from a prospect with an explanation of why they are not interested is nearly as valuable as a “yes.”
Most sales and marketing activities can be captured in technology platforms, yet many people, especially in sales, don’t want their activity captured. Recording all activity in your technology platforms needs to be a requirement of the job. If you can’t measure it, you can’t respond to or improve it, and you can’t measure it if you don’t track it.
The data created through these activities will tell you a lot about how the market is responding to your message -- what’s working or not working -- and how strong your product market fit is. If the data tells you that your approach is not working, try something else!
Once you establish baseline metrics for what works, see if you can improve the next iteration. Create a hypothesis on what will generate even better results next time, and then A/B test it. Wash. Rinse. Repeat.
And never stop testing and trying to improve. Once companies start experiencing success, I’ve seen them don blinders and ignore signs the market is changing, sometimes to their ultimate demise.
BONUS! They don’t engage experts where they don’t have the expertise in-house
At the risk of sounding self-serving since I’m a revenue consultant, don’t be penny-wise and pound foolish. Bringing in an expert where you don’t have the expertise in house can really catapult your revenue if they can get your engine running more efficiently. You can also end up wasting a lot of money with the wrong consultant or solving the wrong problems if you haven’t diagnosed the problem correctly.
Some tips to ensure success -- start with the end in mind and make sure the goals and deliverables are clearly defined in a statement of work with objective metrics tied to the results wherever possible. Always check references if the expert did not come by way of a referral from someone you trust. Finally, make sure they will train someone on staff so the expertise transfers.