Episode 19: The Most Effective Approaches to Rapidly Grow Revenue - Part 1

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And engaged teams, stronger sales teams is right where you need to be. Welcome back to Stronger Sales Teams, the place where we provide real world and practical advice to help you develop your super powered B2B sales teams. So the last three months we have spent lots and lots of time talking about sales processes. They were the first six episodes of this year building high performing teams. So they were episodes 9 to 13 and then looking at the key habits that drive the success of sales leaders. So that was episode 17. If you haven't seen any of those, they're a really good baseline for where we're moving to from here and I'd highly recommend you jump back and check them out. The podcasts are pretty chunky, they're 20 to 25 minutes each, so you should be able to push through them pretty quickly. Okay. Over the next three weeks, we're going to change our focus towards revenue. So we're going to talk about how do we grow it quickly and what are the pitfalls that we need to be aware of. As we embark on these high growth strategies, we're going to look at how we can identify the best pricing strategies for our business. And then we're going to jump into some growth hacks that are really prevalent in the current B2B markets. As always, these podcasts are going to be practical, real world applications. So get ready for lots of chunky ideas that you can work through. Alright, let's get into it. At a top line level. There really are three ways that you can grow your revenue quickly. The first is long term retention. So this is repeat business from customers that you already have. For me, this is the gold standard in terms of growing revenue quickly, but it requires you to have a customer base to start with. Why do I like this one so much? For me, very little in terms of acquisition costs, often none. But I love it when you spend all that money Winning a customer and you have a lifetime value that can increase because they come back as repeat customers. They're generally quicker deal cycles because you don't need to spend anywhere near as long convincing the customer that they should choose you. Often less price sensitive, please don't take that for that's the ability to gouge. As a business, we want to be making strong profits, but we also need to be respecting our customer because the amount of transparent information in today, in the modern world is so significant that that if you go too hard, you will lose that customer down the track. But certainly repeat customers are less price sensitive generally because they trust you and they know that you'll do a good job. So they're prepared to pay you fair value for that service. That often results in higher margins, lower acquisition costs, quicker deal cycles, so you're spending less time, less wages in working through those cycles. And less price sensitive customers generally mean they're a few points higher. So for me, long term retention gold standard. However, it's not always the way that we can grow revenue quickly. There's two other ways that I see successful teams really nailing and they make common sense. The second one is about increasing the transaction size for every customer. So that's getting them to spend more dollars with us in the transaction that they have. That will typically increase margin as it's spreading your fixed costs, it's spreading your shipping, often spreading your finance costs, although they can be variable, but certainly the fixed parts. It's spreading your internal team involvement, your delivery costs, your service costs, your internal finance department costs, your legal costs, your contract costs, even your marketing costs. You're getting more bang per buck for your dollar invested into that lead. Third way and we're going to deep dive into all three of these. The third way is to acquire new customers. This is the most expensive. It's expensive, but it's also the greatest potential for you to grow quickly in the present and then turn that into future growth. If you can increase the transaction size, which was number two, or get some long term retention from these customers number one. So when you get it right, acquiring new customers actually leads you into long term retention and increased transaction size per customer, so it can fill your pipeline. So whilst expensive on its own, when you can work these three growth ways together in tandem, starting with the acquisition and new customers, it can have really long term and powerful success. The asterisks I say with acquiring new customers is we need to make sure that the amount of new customers we're bringing in is exceeding the attrition rate that we have in the business. So it's no good being a service industry like energy where we have a 30% churn rate annually, then only replacing it with 25% new customers. If we want to grow fast, we actually have to have a really heavy focus on new customers or retain those existing churning customers and reduce that rate. So let's have a deeper dive into these three methods for growing revenue quickly. So first one, long term retention. There's a few methods you can do here, but they generally apply differently to different businesses. The most obvious is contracts. It's really obvious for fast growth. We want to drive into contracts that will provide low risk for our customers. The bigger the contract generally the more due diligence and the approvals that are going to be needed to go through for a contract. So the longer term, the higher the dollar value, the more importance to a business. So in any contract where you can look at making them being performance based or low risk for a customer, you'll find that you'll get those contracts signed quicker. Because we're talking about fast revenue growth here, not long term revenue growth. Now very important, we want to see that fast revenue growth become long term revenue. But generally if you're looking to grow fast, you see plenty of businesses sacrificing that for the long term plan. But they then move towards that long term revenue growth once they've achieved that baseline of fast early revenue growth. So my favorite example here of a way to grow through contracts is a service based business that I worked with that provided a guaranteed result from their product. So they guaranteed performance to 90%. So the risk to the customer of a contract going wrong was 10%, 10% of the value it was aimed to provide. So 90% of it was hedged away with the supplier. Really powerful and saw some really fast cycles, but also a nice increase in the close rate. Second way for long term retention models is subscriptions. Very, very popular with consumable products and huge growth in the market at the moment. So the best practice today is, is to have a cancel at any time and short term money back guarantees. Why? Well, it goes down the reduction of risk. That same path that we've spoken about with contracts where if you can reduce the risk to a consumer for getting into a contract or a repeat monetary transaction with you, then you're likely to find that you're going to have a faster cycle and higher close rates. So really important when you're looking at these long term retention models and there's plenty more certainly key account Relationships, that's a more traditional form with long term retention methods. But today the progression around key account relationships is always creating value. So if we want to be having a long term retention model that's around key accounts, our sales team and our post sale follow up needs to continuously be providing value to that customer. It is so easy now to find information from your own self learning that if we can't provide that value, we lose those customers. So no doubt the actual sales process is critical. In fact, Harvard Business Review one of my stats to quote on my sources to quote because they generally get it right, they're quoting more than 50% of customer loyalty is based on the sales experience. So if you can get those key account relationships right, there's some really strong prospects for long term retention. Okay, so to round off on the key account relationship, what we want to make sure we're doing with our sales teams is focusing on how they can better their customer. So if their customer can be better at delivering for in turn their customer, so our customer's customer, then we'll find that these key account relationships will form into long term retention models which when we pair it with new customers and higher transaction growth is actually really powerful for growing our revenue quickly. Great example I've seen here is lighting companies that I worked with. One in particular, they really focused on the quality of lighting output at shop level. For a retailer, this was a big retailer, there was almost 100,000 lights rolled out for this project. They found out of that project that they could demonstrate a plus 80% improvement of quality of light at the shopper level. So for their customer, they were generating a better experience for in turn their customer, which led to a terrific result and a long term relationship. In terms of key account relationships. Before I move on, let's also make sure that our team are knowing their customer, know their birthdays, know their key business events, know the milestones, but expand their relationships as often as they can by showing that they care. We'll do a whole podcast topic, no doubt on key account relationships soon, but for now I'll move on other ways to get retention models working. Understanding the life cycle journeys of your customer. Super smart and really important. So if you can understand how a product that you're offering is part of their evolution and then offer the next steps in that journey, then you're going to have that long term model. So the services of consulting, for example, if you can get in there and provide the recommendations, but then offer the fixes or the programs that you recommend, perfect long term model in the tech world, when you're offering generation two and generation three and generation four Apple phones, classic example, I think you're up to iPhone 17. There's a great model there for long term retention. If you're in the business of reducing expenses for your customers, find out ways where you can offer the first layer of expense reduction and then the second, and then the third and the fourth. Last but not least in terms of how do we get a long term retention model working? Is a sale with a consequent after sales service really straightforward? Get that annuity revenue pumping. It's often the profit lifeblood of businesses. So if you're selling machinery, offer servicing. If you're selling product, offer extra warranties around it. Know when the product lifetimes are up. So if you can use your CRM system or your project management system to proactively be informing your team and your customer when product lifetimes are up, then you're able to jump in straight away with that next generation product. I'm amazed consistently at how many brands don't do this. So if you're one that can get this right, there's some great long term retention in there for you. So a few tips around this. Make sure you're leveraging your database for long term customers. So segment them into your acquired customers and your prospects and market to them differently. Measure the follow up of your team so make sure they're out there speaking to customers. Post first rollout because that obviously then leads to more business down the track. Reward retention. So reward your salespeople. Reward customers. Classic examples. Growth rebates. We see manufacturing industries all the time. When they get towards the end of their reporting period if they need to buy more raw materials or if their customers haven't quite hit the volume they want, bang out go growth rebates. And you often see big levels of purchases. Now there's a problem there because that's a push strategy. But if you can help your customers with a pull strategy to get that product through, then that equals long term growth. Get a great CRM in. That's a huge tip. I talk about it all the time. This is not just a CRM where you go in and write notes, but a system that systemizes your strategy and your next stages. Car servicing. Those types of businesses, they are ace at it. I get reminders, it's like clockwork. When my car is due for a service, I get that warranty and they follow up until it's booked in. So get that CRM cranking. Make sure your customer service and Warranty team are briefed. When you're having customer service issues or warranty issues that you're resolving, well, they will often see opportunities for more business. So when your sales, service and warranty teams work in sync, there's some very powerful opportunities for further business. So know when your customers buy. So if it's seasonal or beach related or winter sports related, you know the times when your customers are going to buy. If it's financial related, particularly products that reduce expenditure, look at targeting that early in the financial year so a business will get the benefit from that for the full year. If you're heavy capex related, when you're knowing your customers, if they're buying generally at the end or the start of the financial year, you can certainly influence that purchase cycle. And last but not least, on my tips here is fix your mistakes. If you get it wrong, that's not the end of your relationship. But if you get it wrong and you don't fix it, it is. I worked with a painting company recently, big job, and they painted the window sills all the wrong color. They went back and fixed it in their own time on the weekend at their own expense, as they should. What resulted out of that was the largest contract they have ever received with any customer ever with that customer who they made the mistake with. So three weeks later they won their largest contract ever. And they won it because the customer wanted to work with them, because they could trust them. Okay, let's move into increasing transaction sizes. So there's lots of great ways you can do this. For me, the most obvious is to have a core product with support products that come with it. So you'll see all the time in ecommerce models, people who purchased X also purchased Y. Classic model Bundle products together, right? Use pricing tiers and structures that encourage customers to buy more. We're actually going to talk about pricing in the next episode, episode 20 and we'll look at things like value based and competitor based pricing. But if you can find a pricing structure that encourages people to buy more, that then allows you to spread out your acquisition and delivery costs, then you're on a winner. Things like silver, gold and platinum programs. Things like value add. If you spend X amount of money, you get free delivery. They're very common out there and you shouldn't have to look too far to find some great examples for them. Extended warranty. I love extended warranty because it allows you to know your warranty rates and then charge a fee for it. So if you know that your warranty rates are 1% but you're charging 5% for an extended warranty, then that's strong margin for your business. But it's also providing peace of mind for your customer if something goes wrong. Charging for servicing upfront. So buy a piece of machinery and pay for three years servicing upfront. You know, then you've locked in that returning business which is actually a form of retention too. Offshoots of subscription models. If you can find ways that customers can have a product purchase from you. But then there's some subscription models that come out of that. Maybe for smaller products. Perhaps it's a car and you're pre paying for fuel, particularly an ev and you're pre paying for charging at a certain type of partner that you have for EV charging stations. Affiliates. See if you can recommend people move to affiliates. Affiliates is a great example where you have a product that supplements yours but you don't produce it and you can receive a commission. Fantastic shipping and delivery rates. Right? You can definitely find ways to be making margin in there. However, I recommend you're very careful here because it can very quickly seem like customer gouging. Supply and installation, supplier, product install it really common makes sense. I think most people out there will know that you don't have to in house installation. You can use subcontractors. Just make sure you've got a great quality control and safety program. Next one for me I really like when we're looking at how do we increase our average customer sale value is that we target our most profitable customer segments. So know who buys the most or know who buys at the best margins. It might be based on number of employees, so consumption. It might be based on their physical business size. So how much they actually need from a geographic point of view might be based on number of customers or quality preference or lots of different types of angles that you can look at to work out who your most profitable custom segments are and then target them. And then last but not least, payment options, payment plans. People expect to be charged a premium for those. So that can often increase your basket size. If not if you're charging at a linear model. So 10 payments of $500 each, it actually helps you bring in customers that you may not have got otherwise. So tips for here. Know your market. There is no substitute for analytics here. And spend the time doing it. Make sure the purchase is really easy. So if you want a customer to buy more, make sure they can do it in a couple of clicks in one phone call with one squiggle. Don't make it hard because you just don't get the return. Train your teams. Train your teams to know how to upsell or to cross sell or which products pair beautifully with others and you'll reap the rewards and reward them for it. Reward them for upsell and even margin. But again, avoid gouging your customers. I'm a huge believer that what goes around comes around. You can make extra margin and you want to make strong profits for your company. But if you're charging customers more than the value that they are receiving, particularly in competitive environments, it generally will come back to haunt you. And last but not least here, work with your NPD team. Work with your product development team to see what complementary products you can bring out to grow your basket size. Okay, moving along, look at acquiring of new customers. So these are new new customers, businesses or people that have never transacted with you. We'll talk a lot about prospecting and lead gen in our growth Hacks episode, which is episode 21. So I won't spend too much time on it now. But just to scratch the surface, we need to be making sure that our sales and marketing teams are prospecting effectively. Goes without saying, but some of the other areas that are also critically important are things like referrals. So referrals from existing customers, again, not much more powerful than when you get a little bit of social proof or a trusted source that refers someone into your business. Cheaper to acquire and generally they come with a greater level of trust. Look at related industries. So if you're selling to schools, can you also then move out to universities or early stage educational facilities? Find the area where you know you're successful in and branch out one lever at a time or branch out one degree of separation at a time and you'll find that those customers are easier and quicker to win because you can quite quickly bring forward that social proof. Geographical territory expansion Classic model, right? For me, it's often hard to get right. Traditionally the businesses that I've seen succeed at this will use fly in fly out teams first. So they'll start to build a small foothold in a region before they then put teams in there. It just builds a little bit of momentum to draw off. They'll often also use single customers as pillars when they're selecting these geographies. So they'll find a customer segment they work well in and they'll target that in the new geography or even similar to that would be a very similar demographic to customers that they have to target in the new geography. Last but not least here on acquiring new Customers very similar to increasing our basket size. We want to make it really easy to transact with us. So remove those barriers. If you're online, reduce the number of fields to be populated. If you're B2B selling, bring digital signatures into your model to make it really easy for people to authorise a purchase. Do your thorough needs analysis when you're meeting with customers so that you can move them through the sales cycle quickly. But for rapid growth in acquiring new customers, ease of purchase becomes really, really important. Okay, so a few tips here. Leverage your core segments and use social proof. So if you leverage those segments that you know you're very good at, that's where I target fast growth. Rather than looking at new segments where you need to bring a whole new level of social proof to the party, try and build on what you know you're good at and that will typically result in quicker growth. Try a number of avenues. Don't be afraid to try different things when you're growing, but ensure you measure them. So if you try three or four different marketing activities, or three or different types of lead generation activities via the sales team, make sure you can measure them and deep dive where they work. Fast growth, fast revenue growth. Hire hunters. So that might be a marketing team that is terrific at lead generation or a sales team that know how to find their own business. There is no substitute to this if you want fast growth farmers or people that like to look after existing business, they're generally not your type of salespeople unless you have significant upside from existing customers. So typically we're going to be hiring hunters. Create a culture of business development. Lead from the front. Everyone in your team should be out there looking for new business and they should be absolutely focused on doing so. Another tip is to do things like joining industry bodies. Fantastic way for rapid growth because you can get in front of a lot of people quickly. A couple of areas to caution. Be careful that you don't over invest early in where you're trying to build lead generation come from. Because if you go too hard, too early and you don't get it right, I've seen many, many companies have their budgets reduced. So start slowly, test it, prove it and roll it out. And then also have a think about where you're generating leads from. Some channels are just faster than others. So brands like Resourceful Selling, they put social media as one of the fastest sales cycles. So leads that come in from social media, they're averaging out at about a 40 day close time. Okay, so we've gone through plenty there today. But before we finish, I want to talk about some wise words that I heard very early in my career. Sales are vanity, margins, sanity and cash flow is reality. So what that is saying sales are vanity, margin is sanity and cash flow is reality, is that be careful not to chase sales for sales sake. We still need to make sure that our business is profitable or moving towards profitability and that we're going to be here to service these customers in the future. So let that one roll around in your head. But certainly not every sale is a good sale. Make sure it's sustainable. So we don't want to be burning out our teams by pushing them too hard to generate leads early. It needs to be a long term model that we can succeed at because we will just get better results from our team, make sure we're profitable. I've gone through that a couple of times, but don't burn out your marketing budgets too quickly. Couple more words of caution before we do it important to pick the right customers versus rapid growth. We don't want rapid growth with products or services that we can't deliver. So let's make sure we pick the customers that are right for us. Because if the pressure comes onto the delivery team and they can't meet the promises our sales team are making, then everything falls over. It's also important that we don't empty the funnel without replenishing it. So absolutely, businesses will have periods where they focus on closing out. But if we stop on the lead generation just to close out business to hit that high growth, we're going to have a famine cycle hit us really quickly. So we need to make sure there's balance. Last but not least, we need to make sure we have happy customers. The best businesses that embark on a high growth strategy that we see, they will focus on value so they won't short circuit what they deliver to achieve growth. They won't short circuit the sales process, the consultation process to make sure they have everything they need from the customer because otherwise, again, they won't deliver and they won't sell the product where it won't be utilised. There's nothing worse than selling a product that a customer doesn't use, because word of mouth speaks for everything. Okay, so there you have it. That's part one of our revenue series which was really focused on achieving fast growth. Next up, we're going to have a look at pricing models and what might work best for you. But if you haven't had a chance or if you weren't able to write everything down, or capture everything from this episode, then jump onto the show notes in your own time. They're on the website strongersalesteams.com at the same time, if you want a little bit of extra help because we went through a lot again today, then feel free to book in a discovery call with me and I'll help you. Specifically, you can get us through StrongersaleSteams on Instagram or LinkedIn or most of the social media channels there, and I generally will get across every connection made, so likely you'll hear from me directly. But before we leave today, our health and wellbeing tip. Change is painful. It creates uncertainty and for most people our minds and bodies will crave the opposite. However, change is crucial for growth, so how do we keep our mind clear and positive when we're going through change? For me, it's all about recognizing short term pain for long term gain. It's a temporary moment in time that you'll pass. More importantly for me is my focus on leaning into it. So if I'm going through change and it's hurting like I'm running into a headwind, I will embrace the uncertainty and acknowledge that it's short term. So if you get it right long term, there's a multiplication of goals. It takes practice. Look me up if you ever want to chat about it. I've done this so many times and I've been the hurt locker more times than I can ever imagine. But for now, get out and embrace that change. It's painful, but it's short term and you'll get some long term rewards out of it. But until next time, keep living in a world of possibility and you'll be amazed by what you can achieve.

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