#4 Newsletter: Growth is Critical if an SME or B2B Service Provider is to Survive. But How to Grow?

Adopting a growth mindset is critical for a small business or B2B service provider to survive the current high taxation budget of the Labour (socialist) government in the UK.

But having a growth mindset in itself is not enough.

It needs to be populated with answers to "How to grow?"

This is an area where many struggle. An often-used response is to tell your BD guys to go out and "find more customers".

And what do they do?

They attend more networking events (that cost you money) in the hope of finding more customers.

If you come from a Big Pharma background, as I have, you would know that this is "just p1ssing in the wind and wondering why your shoes are getting wet."

It is all very hit-and-miss, very amateur.

There are only a limited number of ways to grow a business:

1. Increase the average sales value to your current customers (sell more current products to each customer).

2. Increase the frequency of those customers' purchases.

3. Sell different products to your customers (other products for your customers).

4. Find new customers for existing products/services (and new products/services).

5. Move to big, high-value accounts.

There is, of course, overlap here. Let's consider each briefly:

1. Increase the average value of sales to your current customers

An easy way is to raise prices to raise revenue from the same volume. Selling more volume is much more challenging. Price is an elastic band. Raise it too much; you stretch the band and snap! It breaks. That is when customers choose to leave you because they perceive your price and value do not match. If you have yet to create a solid foundation for your brand (product or service) where the customer perceives you have a good brand with high value, then think carefully about raising prices.

Therein lies a fatal flaw. Seniors need to see their products and services from the customer's perspective. Many fail to do this, believing their perception and steadfast (mistaken) belief that their product is superb. Such executives are in for a rude awakening! Many find my straight-talking challenging to accept, but I tell the truth, and I tell it straight.

2. Increase the Frequency of Customer Purchases.

If you sell a product, people will buy more often if you create more demand for it. However, creating demand is costly. It involves selling and to do that; you need people. And people come with mixed selling abilities and expensive direct and indirect sales and marketing costs. Good salespeople are worth their weight in gold. But can you pick the good salespeople from the mediocre herd out there? Many cannot. I can.

Investing in sales and marketing can create demand. However, many SMEs and B2B services see this as a cost and expense when they should consider it an investment. Is it any wonder such organisations struggle, and many go on to fail?

Similarly, investing in the staff's selling abilities can improve their ability to create demand. Again, very few see this as an investment, so they accept mediocre abilities rather than raising each staff member's performance level.

3. Sell Different Products to Your Customers.

Cross-selling is a skill that many salespeople seem reluctant to indulge in. But they need not be. When you buy a new pair of shoes, the salesperson asks if you'd like to buy the special cream cleaner and protective sealant for the leather, which is half-price today if bought with the purchase of the new shoes. Or "How about an extra pair of laces for those moments when the laces snap just as you are headed off to an important client meeting?"

And male readers of a certain age will remember all too well their barber's words after the haircut on a Friday afternoon:

"Something for the weekend Sir? These Durex Gossamer always come in handy after a great-looking haircut"

Cross-selling is standard protocol. Get that in your head. It is not just for the barber or the car salesman who sells you the optional extras. What can you offer with a product purchase to increase sales?

4. Find New Customers.

This is the most difficult of all. Finding the keys to the entrance to King Solomon's Temple, where the Ark of the Covenant resides, laden with new clients and customers eludes many.

Finding customers, be they small or large corporations, is tough. Not many BD folks can boast a successful track record of over five years with one employer who can demonstrate they can do this. This is the modal value in a Gaussian Distribution Curve - the most frequently occurring result, which, for the standards I worked to in corporate life, is modest to mediocre.

We were top quartile payers and benefits package. We demanded a lot. We had to see results in year one. If we went outside for a role, we'd want someone one or two standard deviations to the right. After all, why bring in someone from the modal value when you have your guys in that modal value internally to sort out?

Some are one or more standard deviations to the left of that curve—the underperformers against the modal group I knew how to identify them and ditched them at the interview (if they got that far).

Some are one or more standard deviations to the right of that curve - the superior performers. These are often paid handsomely and have an attractive package of benefits, making it difficult for them to leave their employer to join you. So, there is a high chance that you will pick someone in that modal (moderate-to-mediocre) standard or an under-performer against that modal group's performance. That ain't gonna drive growth in your ambitious timescales if you want to survive.

You can also find new customers by bringing in someone with a network of contacts and connections, such as past customers and possibly even competitor customers.

BUT:

There is no guarantee that they will convert those competitor customers to your customers, especially if they were his/her customers before joining you.

Think about it. Think it over. Connections and contacts are not the panacea for all your business's ills. Can this person find you NEW leads and companies that are not drawn from his/her past clients?

For all you know, his/her past clients could have been a narrow group of small-time opportunities. Your client base is small-time businesses. Do you really want more of those?

Look at any job ad for a BD person or Non-Executive Director, and you will find they nearly all ask for networks of contacts and connections for the recruiting companies' products and services. As an applicant for NED roles, I walk away from anyone who only wants my network and contacts (listed as "essential" requirements).

Why?

Because once you give away your contacts and connections, you have lost the game! They have the names and contacts they want. That is what they want. Everyone wants more customers and other people's clients. After that, they can cut you out. They want your leads and contacts, nothing more. Your contacts and connections are your treasure box. Don't give the treasure box away.

Such companies are not short of NED applicants. No. They are short of customers. They may want VCs and PEs for funding and want you to bring these contacts to them. But I know those VCs and PEs don't give funds based on knowing me.

No.

They base their decisions on a clear, compelling business case that many SMEs cannot make—at least not to the satisfaction of funders and investors. They need help with the pitch deck. However, they don't want to pay. Instead, they offer ridiculous "equity" several years later that they'll not honour because they have gone bust (90% fail - fact). Or they offer a commission if they get the funding - but I don't make the pitch. They do. And they may fold at the first few questions! My intellectual capital is never free. It has a price. It is top dollar for a reason.

Some want me to open doors, usually asking me to go over and above what I am prepared to do with my contacts and connections.

Some NEDs may accept such demands. I don't. The client's staff are the ones who must develop the art of opening doors, not me. I did enough of that in my time. I can guide them how to do it. But it is for them to do, not me.

Not surprisingly, that narrows down my options for NED roles.

I don't have a problem with that. I want to work with a senior executive board that values my intellectual capital and commercial experience. I don't want to work for an outfit that wants an NED pimp, pimping out my contacts like the "oldest profession".

I offer value not only through contacts but also through my overall business skills and through developing a business on commercial foundations that many SMEs need to gain.

This lack of skills is evident in the massive number of scale-ups that fail each year (fact).

Contacts and connections from me do not assure a client's scaleup success.

Building a solid commercial foundation does - through my advice, coaching, mentorship and guidance.

So, to find new customers, SMEs and B2Bs need a structured, focused methodology to identify target prospects and then develop an approach. This is how I built up my consulting practice with the top 20 global multinationals. However, many SMEs and B2Bs do not do this.

Instead, they attend networking events, where they meet anyone and everyone and exchange business contact details. In my previous Newsletter, #3, I argued that BD folk do not need to talk to as many people as possible. They need to talk to the right people.

In Big Pharma speak, this is an amateur's way of working. I knew my target customers and learned how to hunt them down. In consulting, I was a Big-Game hunter focused on a small number (the top 20) of large, high-value accounts. I'd put effort into getting in front of my target audience and decision-makers. Focused describes me well.

I'd hunt Big Game any day over SMEs.

Why?

Because I'd work as hard chasing big game for a £150,000 project as I would chasing SMEs for a £10,000 or £20,000 fee and arguing over every little penny in an expense claim.

Chasing Big Game is not easy. It takes effort, a structured process, and a methodology to reach an apex predator. I have to stay downwind of the scent in my approach and ensure I target that one client that I can win.

But it comes with BIG rewards. There is magic in THINKING BIG.

Right now, more SME and B2B providers could do more of "thinking BIG" instead of scratching around at networking events trying to drum up business.

To survive the anti-growth and anti-business environment imposed by the Labour (socialist) government, SMEs need to shift up several gears and go for growth. Many will not be able to do that and die of natural causes.

I urge SMEs and B2B providers to move to big, high-value accounts to improve their chances of survival in today's UK market (and perhaps overseas as well). Do not make the mistake of borrowing more to stay afloat. This is crazy logic! Sell more. Sell to higher-value clients.

It is nirvana. But you need to learn how to do it. It's not difficult if you've come from my extensive commercial background.

It might be a challenge if you come from a laboratory scientist background, but it can be instilled in you. It can be learned. However, as a CEO, you need to see the cost of moving to these large, high-value accounts as an investment, not an expense.

Developing a growth mindset requires investing in skills and capabilities and formalising business planning and review processes. Nothing comes free in life. If you don't know how to do these things, pay someone such as me who does know to teach and guide you.

5. Move to Big High-Value Accounts.

This is nirvana. It moves you from 1:1 transactional selling to complex selling, where more than one person is involved in the decision to buy your products and services. The selling cycle is typically described as "long," meaning it can take many months to a year or more to go from opening a dialogue to signing a deal to buy your products and services.

The beauty is that as long as there is dialogue and you guide the discussion in the right direction, meeting checkpoint milestones, certainty is almost inevitable. Price discounts cannot happen (I can explain why in my programme - not everything is free after all!).

But you declare those RFPs, and getting onto Preferred Supplier Lists (PSLs) drags it out and is the bane of your life? You struggle and leave such Big Game clients mistakenly believing they are not worth the effort. Well, having to submit RFPs and getting onto PSL can be a thing of the past with my approach.

Despite clients stating it was their protocol, I never had to submit a Request for Proposal (RFP). Yet I still landed the assignment! Using my process, getting onto a PSL was easy. There is a point beyond which very few prospects will back away and leave you standing at the church altar.

The long sales cycle is worth it. Believe me.

Why?

Because at this level of selling, several things happen:

• You establish yourself as a business partner solving the client's problems and contributing to their business. You are not seen as a supplier selling them things.

• Price sensitivity decreases. Even though they may say they want a discount, the price may be too high, or their budget will not stretch that far. I can show you how to sell without discounting and why they accept it 99 times out of 100.

• Loyalty increases. They see you as a long-term, trusted partner.

• Repeat business follows when they see you as a trusted partner solving their problems and issues.

• There is less importance placed on the features of the product or service.

• The senior executive in the client may refer you to the senior decision-makers in their other business units for your products and services. This opens more doors for you to sell to more of their internal units!

• For example, the pharmaceutical business senior decision-maker may refer you to the senior decision-maker in the medical devices division who is experiencing issues where your products, services and approach to solving business problems would benefit the other division.

• Competition decreases. The dog-eat-dog of transactional low-value selling to SMEs disappears.

Very few competitors know how to move from transactional to consultative selling in complex, large, high-value accounts. You can make a leapfrog decision by engaging me to teach you how to do it, leaving your competitors behind in the swamp scratching around selling at transactional level 1 SME business.

If you want to grow, you should seriously consider moving to a higher level of selling abilities with large, high-value clients using a structured process and methodology I can teach you.

My methodology highlights how to pick target clients from the Universe of clients.

You see, networking for BD is like foraging in the Universe. You don't know who you will meet. Will it be a target client? You don't know if the decision-maker will be present. Worse still, many may be networking, not looking to buy, but selling themselves on the lookout for a job. Turnover is high in the BD world. Hence, many are expanding their network as insurance for when they need to jump ship when they see the writing on the wall that their current stint at BD looks like it is coming to jumping before being pushed out.

The hard reality you learn in Big Pharma is that as much as 80 or 90% of the Universe will never buy your products or services.

Why?

Because they are happy with their current products and services and see no reason to change. Don't waste your time on that 90% of prospects.

The same is true in consulting. At any given time, I targeted up to five big pharma companies from a list of 12-15. That's it. I was not a volume hunter. I chased high-value clients.

There are only two situations in which I can sell my services, and I knew how to find out if either of those two situations existed. If they did not, I'd drop the prospect like a hot brick and not waste any of my time until they came within sight of either of those situations.

Going for anyone and everything is amateur stuff. It is Neanderthal Man doing BD.

Focus is key.

Are you ready? Or will you be unable to meet the UK budget's high taxation demands and sink your organisation? Will you lay off staff instead of rising to the challenge? Laying off those who bring in revenue is akin to shooting yourself in the foot. There is an alternative.

There is a choice. You decide.

About Samkoman Consulting Ltd:

I started SCL after a stellar career at AstraZeneca. I advise senior Boardroom executives on their commercial challenges, how to grow revenue for B2B clients, and how to move to large, high-value accounts.

Growing the skills and capabilities of your organisation's BD and sales staff is likely the most critical investment you will make—an investment in your people.

Your people will become stronger and more focused. They will consistently use my proven process and methodology to deliver higher-value revenues, growing year-on-year to expectations and beyond.

Explore with me how we can bring those skills to your organisation. Let me show you how to make your organisation a lean and effective selling machine growing revenue and smashing budgets and expectations year-on-year.

Use the link below to book a free, no-obligation Teams or Zoom call in my diary. You have everything to gain on this first step that could transform your business in 2025.

Book a free consultation with me: https://calendly.com/amitvaidya2021/