The tailwinds of a strong economy are propelling growth for 92% of small and midsized business forward with 28% realizing multiple year double digit growth. Against this backdrop, Vistage Research, in partnership with Salesforce surveyed and analyzed responses from 1377 Vistage SMB CEOs surveyed in August of 2017. In <Customer Growth: Decisions for the SMB CEO> we learned about the decisions they face, the investments they are making and the winning initiatives they are deploying to continue double digit growth.
Both high and no-growth organizations are doing many of the same types of initiatives. It’s not that the underperforming organizations aren’t trying, it’s rather the higher-performing companies are executing much more effectively while activating more initiatives. They are able to execute more consistently across multiple winning strategies.
They also tend to have dedicated leadership in place. We anticipated as you go from small to big, even with in the continuum of small business, you would see a logical connection to when people added managers. But it turned out there was no correlation between size of company and having those roles in place. Rather it was that you had a dedicated manager in marketing, in sales, in customer service, that made the difference in ability to execute and performance.
That translated into a really powerful effect in terms of not just the use of technology, because everyone’s using technology, one flavor or another. We found that those high-performing organizations were 56 percent more likely to be more effective or highly effective in the use of the technology. 59 percent of no-growth businesses said they were ineffective in using the technology.
It’s not a single factor, it’s a combination of factors. And a lot of it, I believe, has to do with the ability to impart solid leadership, and have that leadership have the ability to execute.
Transition to Transformation
A broader trend that has been in play since there’s been sales and sales technology, and that is the movement from tools of individual productivity like a spreadsheet, PowerPoint or Word to those tools that drive organization execution. Like the ability for an organization to impart a common language, a common approach in terms of how you describe customers and customer phases, and then having the discipline to use the technology to capture and analyze that data. We can each individually build our skills as we choose with individual tools, but we must collectively develop and execute our collective skills for true organizational gain.
Somewhere on that continuum, from, I roll my own, to I’m just going to invest in established best-practices, is where we see people on the continuum. And directionally, the data shows that those that have dedicated leaders are twice as likely to out-perform, as well as they’re more likely to have a dedicated application and get better value from that.
The challenge SMB CEOs face today is moving from digital transition to digital transformation. Meaning, as I move from paper to spreadsheets, or spreadsheets to some little point application, I’m just transitioning my analogue processes onto a digital platform.
True digital transformation is to look at what the platform has modelled in terms of established best practices on a vertical, business size basis, and adapt what you do to technology. Because if you don’t believe that technology is the change agent of our generation, then you will be disintermediated rather quickly out there.
As simple as it sounds, high growth companies are also much more likely to go after new clients. They get 29 percent of revenue from new clients as compared with 19% for no growth companies. Evaluating the revenue mix between existing and new, they’re 53% more likely to rely on new customers. So, we focus on what are those new customer strategies:
Relationships: Traditional face-to-face selling. With small or mid-size business, you’re always doing business locally. Sometimes regionally, nationally or globally, but always locally. So, the ability to have face-to-face relationships, especially in long-term, traditional small businesses is at the top of the list.
Defined sales process: High Growth SMBs maintain an organizational understanding of how your customers want to buy, and you’ve been able to translate that into measurable, definable sales actions and steps. With that common sales process comes common sales language. Meaning we don’t reinvent how we sell every time we sell. Rather, we’ve now been able to capture, document and then put some resources behind it.
Referrals: Referrals remain, especially in a small and mid-size business, as a critical growth strategy. it’s who you know, and can they connect you to the next person. Or, more importantly, are your customers out actively promoting and referring you? That’s who your prospects listen to most closely. The positive vibe from customers just radiates into the market.
High growth SMBs are out executing their competitors. There are no new secret strategies for customer engagement. The leading initiatives of high growth SMBs succeed because of execution and the effective utilization of technology. In the study, we capture the leading initiatives for Marketing, Sales and Customer Service. At Dreamforce 17, we shared the results of this study in two sessions where three Salesforce customers shared their winning initiatives for customer engagement:
Listen to Joe Galvin, Chief Research Officer for Vistage Research as he shares research and insights on customer growth for high performing SMB CEOs: Quotable podcast #83: https://www.salesforce.com/quotable/podcasts/episode-83-how-smb-ceos-improve-their-sales/