Blog Hunker or Grow:
The economy still seems challenging. If you own or manage a business that sells to other organizations, you have a choice. Hunker or Grow?
Is It Time to Hunker Down or To Enter the Revenue Stream?
- Do you opt to hunker down and ride out the difficulties?
- Or do you find ways to get proactive and create opportunities?
More than ever, our ability to know what to do is clouded. The lessons we so painfully gained in the past lessons don't seem quite as relevant. Yet, commerce is clearly still happening. People are still buying.
This is two blog articles. In the first, published this week, you’ll find suggestions about whether to hunker down or to seek opportunities and take advantage of them despite the current disruption in the economy.
In the second, to be published soon, you’ll find strategies to take quick advantage of disruption. You can make disruption your ally.
As a manager do you hunker down and ride out the current economic difficulties? Or do you choose to get proactive and find and make use of new opportunities?
Many managers are acting in shock. They are not taking the initiative because they cannot predict the immediate future. Your ability to know what to do based on past lessons is challenged. Doing nothing feels safe, acting feels risky.
With all that, it is easy to forget that commerce is still happening. Companies are looking to take steps to make as well as save money. Governments are continuing to invest in services. It is easy to forget that things are still being sold and that customers want to buy more of them.
If you own or manage a business, you have a choice. One option is to bide your time during the disruption. You can wait for the revenue to appear. Many managers will choose this.
Another option is to move into unknown areas to create revenue projects. The unknown is not the easy choice for many, but some will choose to try to create opportunity. The good news for the latter managers is that this disruption is creating opportunities that never existed before. This is a time when new products and services can take hold.
You face risks when you move into the unknown. Many projects you propose to customers may fail. However, if only a quarter of the new projects happen, that is a major opportunity that other companies may miss. You have an opportunity that your business will miss if you wait out the recession.
When you talk to your sales teams, remind them that there is a continuous river of spending. Although the rate of flow rises and falls, the river never stops. The economy changes and takes odd turns, but the river of spending never dries up.
Some times you stand on the side of the river of revenue opportunity. You point at it and discuss how much larger it was last spring. You watch it and wonder what next spring will bring. Perhaps you walk along, looking for the right place in which to dip a toe. Sometimes you step into the river of revenue and get thoroughly immersed in it. Right now that might be appealing.
Getting the Sales Team Into a
For your sales team to take advantage of the stream may require that they take a different view. You may want them to look at customers a bit differently. Consider:
- There are businesses to which you sell that are withdrawing and hiding and hunkering down, hoping to survive. They provide trickles of revenue.
- There are also customers who are looking to thrive and grow their own revenue. These businesses are part of a fuller and fast stream.
The key here is that your sales team may not realize that these trickle and fast stream customers are often people who work in the same company. In many businesses, managers hoping to survive are in staff roles like human resources (HR) and information technology (IT.) The ones planning to thrive and grow are in line positions on the revenue side of the same business. It is time to ask:
- Do your sales teams call on the staff or the line?
If not both, they may be missing the stream of revenue.
You can take real advantage of this in a competitive marketplace. This is because some of your competitors are in survival mode; so they appeal to the hunker-down folks in staff roles. This works to your advantage when you work both the staff and the line in your sales strategies.
Fewer of your rivals are stepping into proactive mode. They differentiate themselves by talking about revenue. They appeal to the managers and executives who want to grow their businesses. They are in the faster stream; you may want to join them in that stream. As late as it is in the calendar year, their are still new deals to be had in this stream.
Your fastest path to the quickly growing your revenue stream this year is going to be found with the line managers of customer companies, people who also need revenue this year. Every company has managers who want to find ways to get things done and are willing to break budgets to make revenue happen. At this time of year, they are more frustrated and more willing to work with a new supplier. That is an opportunity for you.
Approaching Your New Customer – Three Practical Considerations
The economy isn’t an object to which you are prey. The economy is an average, a line defined by mathematics. There are companies and people below that line, and companies and people above it. No one of us is average; each has a choice to be above or below that line. You control that choice.
Customers aren’t monolithic. Each company or municipality is a combination of buyers and decision makers with different agendas. This is a good time for your sales team to take advantage of the difference between those taking the survive path versus those looking to thrive.
For example, you might rely on the news to say that Cisco Systems is gathering cash to retire debt and buy businesses at a discount. You could say that General Motors (GM) is unable to spend money, a poor place for you to invest sales time this year.
But these generalizations hide important truths. Cisco is cutting back at the same time the company is investing in growth. Their non-revenue departments are looking to avoid spending. At the same time, GM is spending substantially in tools, consulting, and, of course, new technologies for cars.
Even saving money is expensive. Closing plants requires a substantial investment. GM will do it. On the revenue side, GM is building the cars of the future. That requires a substantial investment and creates a revenue stream. At GM, you will find top managers focused on revenue. There is a stream there for someone to tap.
To gain an advantage for your business, you need to ask your sales team a question:
- Do you call on cost control departments or revenue generating departments?
For most, it is cost departments. There is nothing wrong with doing that and building long-term relationships, but this may not grow your business this year. Your goal is long-term profitability, but can you also have the short term? Can you increase your market share today while your competitors hunker down? You can.
Start by designing sales strategies that bring value to the revenue oriented groups at your prospective business customers. That means adding value as the customer sees it, not as you want him or her to see it. Letting the customer define value can be uncomfortable. So is reaching high into executive offices that are not familiar to your sales team. On the other hand, if there was ever a time to get uncomfortable, it is now. This is a high leverage period because other companies are withdrawing from competition.
The good news about this being a blog is that if you want help you need only send over a note. I’m an author, I love it when you read what I write and ask questions. Drop me a note at Peter @ MeyerGrp.com
A practical step to locating your revenue stream is to segment each customer company into individual buyers, focusing on whether the individuals directly contribute revenue. Some of those buyers are on the cost side of the company. Some are on the revenue side. Don’t let your sales teams miss either side.
It is not just companies that have revenue-generating departments. So do governments, medical centers, and nonprofits. Governments have tax collection and economic development groups. They are quickly creating revenue streams this year. Have you allocated some of your sales resources in that stream?
The second practical answer? Make it easier than ever for the revenue managers at your new customer to make a decision to go ahead.
- Can you make it easier to for your customers to buy in small bites?
- Can you make it lucrative for your sales teams to sell small deals to new customers?
- Can you help your new customer ease into the relationship with you?
- Are you compensating your sales people to prospect for this kind of business?
- Can you offer bonuses for new customers? Even if located within in companies you sell to?
As the economy rebounds and a customer grows, to whom will the revenue managers turn? It will be companies and people that focused on selling small and easy to absorb projects during the recession. Why not make your company the preferred source?
If your team is not used to talking to customers’ revenue generators, the third practical step to take is to take a leadership position. Show them by doing it. That requires time and attention, but it is likely to be the best investment you can make this year.
As you guide your business, you have the option to hunker down and let things get better. Or you can take advantage of the opportunity to get a larger market share and add new customers. The best way to focus your sales teams on obtaining new revenue is to recognize that potential new customers include individuals inside businesses. Point your teams toward managers who generate revenue for your prospect.
One of the key investments is your own energy. If you want your team to be proactive with customers, you will need to act that way. If you combine your leadership with the right product and service packaging, you are likely to get revenue for your company that others will miss. As Intel’s spokesman said when announcing the $7 billion building plan: "You never save your way out of recession. You invest your way." Will you invest in a revenue stream? Will you make it work for you?
This posting is from the upcoming book: Grow Your Revenue, Time, and People. It has appeared in a slightly different form in BusinessQuest, the journal for the Richards School of Business.
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Hunker or Grow:
The economy still seems challenging. If you own or manage a business that sells to other organizations, you have a choice.
Hunker or Grow?