Why will your company’s business growth stop someday, too?
Two months or so ago my daughter asked me what is most difficult about running a company. I don’t know exactly why she wanted to know. But I’d never really thought about the question so deeply until that moment. In the process of answering her question, I even ended up redefining FrodX’s mission. 😉 After a month had passed, I told her: the biggest challenge for any company is to maintain business growth.
Every successful entrepreneurial idea that leads to establishing a company and steep business growth at the start ends up losing steam at some point. It’s natural for any growth to slow down at one point or another. Quite a few companies stagnate, and quite a few fail.
If you compare the list of the largest 500 companies from 1995 to today’s, you won’t find even 60 of the same names. Even Jeff Bezos, the founder of Amazon, recently said that it will very likely reach its inevitable demise sooner rather than later. Despite the fact that Amazon is one of the fastest-growing companies in history. And it’s still growing.
Four key levers for managing business growth: the basic rules of growth
In order to maintain business growth, a company should invest in four key areas:- Product development,
- Marketing,
- Sales,
- Customer service.
The synergy of all four factors is reflected in the Customer Experience (CX), and this is the key to the business growth of any company. If any of these four factors is missing, it impoverishes the customers’ experience. This negatively affects interest in the product and the brand’s reputation, and consequently also business growth.
The art of maintaining business growth is in seeking a balance between all four factors.
- Product development has to provide a competitive product or service for the right target audience.
- Marketing processes have to be effective not only in developing the target audience’s awareness and interest in the product, but also identifying customers that are ready to purchase and the customer journeys for each of them.
- The basic task of successful sales is to make it as easy as possible for interested customers to access the product.
- The point of great customer service is that customers don’t feel any stress when they need you.
The art of maintaining business growth is in seeking a balance
It seemed to me that the easiest way to explain this balance to a fourteen-year-old was to say that each of the above levers has its own element on a wheel that turns. The faster the wheel turns, the more the area of the circle stretches, which in turn means a better customer experience. But the wheel can only turn as fast as its slowest element. And just as coordination accelerates the rotation speed, lack of coordination gradually slows it down. It negatively affects other elements. Maintaining the status quo is just an illusory feeling. The customer experience is always either improving or worsening, in most cases unnoticed. Unfortunately, there is no such thing as resting in place.
Dealing with problems that are easier to solve just makes it easier to await our fate
Although the basic rules for maintaining business growth sound very simple and logical, companies often don’t make as sensible decisions as one might expect. It’s human nature to prefer to deal with what is closer or easier to us. Or we incorrectly find it more painful (uncritical judgment).
Honestly, there is really a critical number of these misperceptions or misconceptions. They exist among our clients, and even more so among companies that had this potential but failed to agree on how to tackle their key challenges.
How do I know that your campaign will fail?
Almost every day I come across instances in which a client is thinking about how to use a new promotional activity (the campaign brief is ready!) to mitigate a decline in sales, but it’s more than obvious that the unique value of the product has already collapsed. The competition has made a few strides ahead. Sometimes I’m bold and ask what would happen if VW stopped developing the Passat and spent that money on promotion and sales. Would you really sell more if you significantly increased the number of salons and the volume of advertising? I’m convinced that in five years’ time, nobody would want that Passat from 2018. Cars from other manufacturers at the same price would simply be more attractive and more powerful.
How do I show that the problem is in lack of coordination in sales and not the product itself?
The delusions we encounter are sometimes even more ridiculous. It’s not uncommon for established marketing processes and communication of product value to generate good interest in a selected target audience and for new leads to present themselves in some way and be willing to talk to the salesperson. But there just aren’t any sales conversions. When we analyze the success rate of conversions across the sales funnel, we find that in places where salespeople are involved in the process conversions fall dramatically, and with such relationships there’s no way that the set sales goals can be attained. Even when the industry standards indicate something completely different.
Because we want to prove where the problem lies, we play a few games of “secret shopper” and find that all we have to do is convince our client’s management that they, too, should play “secret shopper.” Even though they originally hired us to help them “spruce up” an uncompetitive product.
Why are you sure you need an NPS expert in your ranks?
I could probably tell some more stories about customer care and the key criterion of success in this area. But I won’t.
Instead, I’ll give you some advice. Before you start paying your NPS / Customer Experience expert, you can do a quick test of how much room for improvement you have in this area. If the main complaint your customers have is that you’re expensive, I’d say you’re on the right path. Because that’s the only thing that bothers them. All of our clients that have gone over to another similar company due to a lower price have ended up returning to us sooner or later. It turned out that all of a sudden our price wasn’t such a big problem any more. They just hadn’t been aware of our other qualities before.
It seems more worrying to me if you determine that customers are complaining about how long they have to wait for you. Or how it bothers them that so many different people are involved in addressing their particular request, etc. Even though there are many NPS experts in Slovenia, they don’t distinguish between some of the most basic methodologies for measuring customer service performance. NPS, CSAT, or CES – for them, all of these are NPS. If we look at the speed of the turning wheel that describes the overall customer experience, the basic issue in customer service is primarily how much effort the customer has to invest in order to have a request taken care of. If their pain is only in their wallet, that’s the best indication that you’ll soon be able to raise your prices a bit further. If you get my drift.
Don’t worry if I’ve lost you here. I lost Pika, too.
I don’t know if my daughter really understood what I was trying to say. I had the feeling that she was following me. Up to the moment when I told her:
Me: “You see, at FrodX we help solve the biggest challenge that all companies face.We help them maintain business growth.The thing that is every company’s biggest challenge is basically our main specialty.”
Pika: “Oh, shoot, and all this time I’ve been thinking that you work in marketing.”
I didn’t explore what “marketing” means to her. But I was struck by the thought: it’s high time I arrange a summer internship for her at FrodX. She could start by clearing up the cups in the meeting rooms and erasing the boards.
But when are you planning to drop by? For a cup of coffee to start. So we can exchange a few ideas.
