We recently partnered with Vistage Research, a division of Vistage Worldwide to conduct a study of their members, small and midsize business leaders, to understand how they successfully manage customer growth. Over 1,350 SMB CEOs participated in this study that captured the decisions, strategies, and investments those leaders are making to capitalize on today’s positive economic environment as they engage with customers.
The analysis compares high-growth and no-growth respondents. High-growth SMB companies were defined as those who reported double-digit revenue growth in the prior year as well as projected double-digit growth in the current year. The no-growth respondents reported flat to declining revenues in both years.
Joe Galvin, chief research officer for Vistage Research, will share the findings exclusively at our upcoming Boston Growth camp on October 10 (register here for free), and we will be releasing the full report, Customer Growth: Decisions for the SMB CEO, later this month.
We caught up with Joe to get a sneak peek at some of the key takeaways.
Adding new customers, the fuel of revenue growth, is a different and a much more difficult proposition. It requires strong marketing, solid selling competencies offering differentiated products, and services to replace an existing provider or add new capabilities. Displacing a current provider or demonstrating new capabilities to a new customer introduces a level of “buyer’s risk” that many prospects prefer to avoid.
A clear distinction between high-growth and no-growth business is the contribution of the “hard to get” new customers to their revenue mix. High-growth businesses reported 29% of revenues from new customers as compared to 19% for no-growth. This difference compounds itself as new customer growth this year becomes customer revenue next. Focused acquisition strategies for new customers and markets help high-growth expand their customer base while also retaining current customers.
The five core elements of a customer growth strategy are common for all businesses:
Expand/retain existing customers
Serve new markets and customers
Create operational efficiencies to better scale for growth
Introduce new products and capabilities
Grow the sales force (i.e., salespeople, telesales/inside sales, partner re-sellers, etc.)
High-growth businesses are more likely to diversify their strategies. The difference between high-growth and no-growth businesses is that high-growth businesses diversify their strategies. They’re up to 30% more likely to engage in all five initiatives. What’s more, they tend to execute these strategies with more sophisticated tactics.
The clearest representation of CEO decisions are the investments they make to execute their strategy. Investments rarely follow growth, rather they push growth. The top three responses were investments connected to talent, training and technology. Recruiting, hiring and onboarding of customer-facing resources is a top priority, followed directly by investments in their development and engagement. Powering their productivity are investments in technology.
Once again, we see common categories of investments for high growth and no growth. The difference again is frequency and execution. High-growth SMBs are up to 31 percent more likely to invest in these customer growth strategies than those with no-growth. This is not to say that no-growth companies are not making these investments, it’s simply that high-growth businesses are much more likely to invest in more of these categories.
Get the full research report and hear from Joe Galvin at our Boston popup Growth Camp event on October 10 at the Exchange Conference Center. Get hands-on advice for growing your business, meet with experts from Salesforce, along with partners Sage, OpFocus and more for a powerful half-day growth extravaganza. You’ll get hands-on advice for running your business, working more efficiently, and building close connections with customers. And best of all, it’s FREE. Learn more and register here.
Salesforce can help you find customers, win their businesses, and keep them happy so you can grow your business faster than ever. Learn more about our small business CRM solutions or follow us on twitter @SalesforceSMB and join the conversation with #SalesforceGROW.