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WHY EVERY BUSINESS NEEDS A “GROWTH” STRATEGY + EXECUTION PLAN & HOW TO BUILD ONE
What is a growth strategy? It’s pretty much exactly what it sounds like — a strategy to grow your business. The problem is, it’s these no-brainer things that tend to get us in trouble. Most businesses want to grow. They want to increase their customer base, revenue per customer, retention length or the average amount of purchases during the life of a customer. Too often though, we don’t put a strategic plan in place to pursue these goals.
We forget how tender business growth is. How easily it can die without proper care. How much hard, consistent work it takes to keep growth going. Growing a business is one of the hardest things we will undertake in our lives. I know. I’ve spent the last 10+ years helping grow the commercial printing company (Executive Printing Corp) that my father started followed by starting, growing and finally selling my a marketing agency (Invoq Marketing).
Now I am no expert at growing plants, (My green thumb tends to be more black or brown) but I have spent the last 10+ years helping businesses grow, and have learned a few things that help and hurt. I’ve ridden the waves of winning big deals, launching that new partnership, and losing that key customer. The sleepless nights of excitement before a big presentation and the tossing and turning while trying to figure out finances.
Growth is hard.
Growth is exciting.
And the right growth is the catalyst for maintaining a healthy company.
If your growth has slowed down, plateaued or if you have an aggressive competitor building on your turf, its time to double down and build a plan.
Side note: a key decision to make early in this process is to determine who is responsible to say yes and no. Where are the checks and balances? Often when we start to think about our growth we get overly excited and try to do everything all at one time. We need someone(s) who can and will temper the excitement and keep goals and conversations realistic. This person also needs to be able to hold people’s feet to the fire to execute on the goals and decisions that have been agreed upon.
PHASE 1: Goal Setting
Step 1: Determine Goal & Growth Framework
There are lots of different frameworks for creating and setting goals and growth metrics. You have OKRs, Scrum, Six Sigma, E-Myth, etc. I love starting out with the VTO (Vision/Traction Organizer) document from EOS/Traction Process — You can get the book and materials, etc at EOS Worldwide. The VTO does a great job of starting out with your BHAG and breaking it down into yearly and quarterly goals that are accomplished through a set framework of weekly & quarterly meetings focused on solving issues and executing “rocks” or a big task during a quarter with weekly accountability to get it done.
Step 2: Bring in a fresh set of eyes
It can be a great idea to bring in a fresh set of eyes, that is unbiased and will see through your bullshit. As business people, we tend to be blind to our strengths and weaknesses. Also, it can be hard for a subordinate to point out a blind spot, weakness or oversight to their boss since they will have to show up to work every day with that person. I recommend a 3rd party that understands marketing/sales/growth/finances and the details of what is happening and can help you make changes in the trenches. They can call things the way that they really are without the dynamics of bosses and daily politics.
Step 3: Define key metrics that need growth
Define your key metrics that need to grow i.e. retention, net new revenue, new clients, profitability per client, overall profitability as a company, etc. then define the one metric that is the highest priority and focus on that first. This is where you need the person that can/will say no. You can not, will not be able to move the needle on all these metrics at once. This is why you must start with just one. These metrics don’t move in a vacuum, growing the customer base will most likely increase gross revenue, but that gross revenue increase is a by-product of your focus on growing your customer base not a point of your focus. That early client base growth though will also probably result in decreased profit margins in the short term due to extra investment in marketing, sales, & operations staff & expenses.
For this article, we are going to pick growing the customer base as the focal point for our growth strategy & execution plan.
For this example, you will have 100 customers and you want to grow to 150 total customers over the next 3 years. (We are talking realistic growth for a non-funded business, not hypergrowth).
Phase 2: Plan Creation
Step 1: Define the levers to move the key metric.
Now that we have the key metric we are looking to impact, we need to define the levers that will impact that metric and determine how we can push and pull those levers.
Example: Take your client base and divide them into 3 groups.
Group 1, Ideal Fit Clients.
Group 2, Okay Fit Clients.
Group 3, Bad Fit Clients.
Let’s define these groups.
Ideal Fit Clients (10-20%+ of your customers):
These are the clients that are a perfect fit for your product or service. They understand what a healthy relationship with your company looks like. They understand the concept of mutual success and want you to succeed. They pay their bills on time, and fun to work with. They care about their business, your business and you as a person. When they push back, its because they have legitimate questions, concerns or you haven’t provided the proper communication to them and they don’t understand. These are the customers that are a dream for your business. (Also they are very hard to find.)
Okay Fit Clients (50%–80% of your customers)
These are the clients that are a relatively good fit, they pay their bills, most of your services or products are a fit for them, but they aren’t perfect. Maybe they are a bit small or large for your offering. Or the point of contact left and the new point of contact is hard to work with. In short, these clients aren’t going to get fired anytime soon, but they are also not your perfect-fit client. These are the clients that are a solid part of your business and you need to take care of them.
Bad Fit Clients (Less than 20% of your clients)
The third category is bad fit clients, these clients come in a few stripes. Sometimes they are hard to work with, other times they were good fit clients when you started working together but over time as both businesses have grown and changed, they are no longer the right fit for you. Sometimes it’s a bad culture fit that you didn’t catch early on. Or they are never satisfied with your work, timelines or execution. These are the clients you do not want more of, and oftentimes you would be better off helping these clients find another vendor to work with and putting that effort into finding new, okay or great fit clients.
Analyze your Great Fit Clients
Take your great fit clients and start to analyze them. Look at things like:
Gross business revenue
The culture of the company
Your main point of contact
The mix of services and/or products they are purchasing with you
How long they have been a client
What did they look like when you first started working with them and how have they changed
What problems, pain or threats are you removing and/or managing for them
What opportunities are you unlocking for them via your partnership
You can use this helpful spreadsheet for your analysis.
You want to look for trends and consistency.
For instance, at TANK we know that having an internal mid-level person that is responsible for making us successful and whose job includes managing marketing make us much more successful vs if we are working directly with a CEO who is juggling a host of various different departments.
We know that when a company has a certain internal structure and meets certain revenue metrics that they will be looking to improve their marketing and get better ROI on their spend as they build their brand, but they are not yet ready to build a robust internal marketing team.
We know that we are a great fit for b2b manufacturing and service companies that are looking to build a premium brand and reputation. We also know that we are a terrible fit for a startup e-commerce company.
These are things that we know help us define our great fit clients.
In addition to analyzing these companies, it can also be helpful to jump on a phone call with them and get some first-hand information from them.
Step 2: Determine a realistic growth rate for your focus metric:
Now that you know the levers you can push and pull to impact the growth of your key metric, let’s look at creating a realistic growth rate. Entrepreneurs tend to be overly optimistic. Jon Acuff has some great advice in his book Finish. Set your goals and then cut them in half. This will give you a realistic and attainable goal. Especially if you are going from slow growth mode to high growth mode. It will take longer to get things into gear and to start working than you initially anticipate. Here is a spreadsheet that I have used to build out user and revenue growth in the past. Your growth rate won’t be linear. So plan for it to ramp up over time. In this scenario, we are looking for 50 users in the next 3 years. Taking into consideration a bit of churn, we will need to land 60–70 customers in the next 3 years. So year 1, plan for 12 new customers, year 2 for 20 new customers, and for year 3, 32 new customers. These are much more realistic and attainable vs trying for 20 new customers in the first year.
Step 3: Create your annual plan for driving growth — including tactics + staff
Plans are tricky. You need enough detail to keep you focused and on track, but overplanning and determining every detail ahead of time is an easy way to make yourself feel productive without actually shipping anything. The type of things that I recommend people put in plans is themes or key messages, staff requirements, internal initiatives, and chunks of work. Here are some ideas of what these can look like:
2019 Q1 Plan
Theme: Building Brands through wholistic paid media strategies
Staff: Take XYZ off of the paid media teams plate so they have the bandwidth to help with content creation and executing of the additional work. Also, track capacity and plan for potentially adding a junior paid media specialist
Internal Initiatives: Revamp internal processes in project management tool for paid media management to track capacity and efficiency more closely so that we can hire when needed or allocate other internal resources to grow this department.
Chunks of work: Update website to accurately reflect current paid media offerings. Create paid media campaign leveraging referral partners at XYZ company, PPC, LinkedIn Ads to our Great Fit Client profile companies, email drip campaign to our database and collateral for the sales team.
As leadership, you should build out these key blocks and initiatives, and then pass it off to the team executing to build out the detailed tasks. Try not to over-plan initially and as you build things out the details will become clear.
Phase 3: Execution and Iteration
Step 1: Start executing the plan
Planning is the easy part. General Patton said “A good plan, violently executed now, is better than a perfect plan next week” and Helmuth von Moltke said “No battle plan ever survives first contact with the enemy,” This is why we want to get into execution as quickly as possible so that we can start to see what is working and what isn’t and adjust.
I recommend starting these new initiatives with an all-hands meeting of the teams/leaders responsible for implementing and executing the plan. Make sure people know about the other parts of the plan that may impact them, even if they are not directly responsible for those things. Plan one month at a time in some level of detail. I.e. here are the tasks that need to be accomplished this week and month. The EOS weekly meeting and quarterly rocks process can give a good framework to manage these initiatives with appropriate accountability but also agility.
Step 2: Weekly and Monthly Review.
On a weekly and monthly basis review:
Completed Items: What are the results of those completed items. Are they successful, unsuccessful, or unknown/too early to know the results? Make sure to celebrate the wins as a team, even if they are small. This builds momentum.
Open Items: Items that have been started on, but are not yet complete. Are there things stalling them? questions or problems to resolve? Does the team have the clarity that needs to be brought to them etc?
Items Next in Queue: What are the next items to start on. Do the appropriate people know what they need to know to start on these, have they been granted access to the tools and resources that they will need? Do they have the authority to make the decisions needed to complete this task?
Step 3: Quarterly Adjustments and Pivots
On a quarterly basis, you will want to:
Review the original goals — are they still the right goals, is the plan still the right direction or have things broken or changed in a way that the goals and overarching plan need to be reevaluated.
Review the remaining annual plan —
Analyze the past quarter of work. Look at what has worked well and what has been a struggle to get accomplished. Are their assignments or structures that need to change?
Plan out the details needed for the next quarter
Run your all-hands meeting and get started executing.
This is not meant to solve all problems for everyone, but will hopefully be a good starting point to help you kickstart the growth in your company.
Give me your feedback, your pushback, and your insights. Let’s learn together how to grow companies better!