I was talking with an ex-colleague recently who was describing her frustration at her current company’s difficulties in closing new business. They are a small company in a fast-moving high-tech market and they are struggling to get traction outside of one or two key customers.
I went through my mental check-list of ‘have you tried x’ with her. The conversation went something like this.
I asked where the company’s focus was. I like focus you see – focus brings results and/or aids decision making. But she smiled and told me that they really had focused their efforts on a vertical market.
I asked her if they had focused their efforts on solving a specific problem/use-case for this vertical market. Again, I was told that they had and that they had built some fairly advanced supporting marketing material that describes what they do, how they do it, why this is a good thing, and how they do it better than the competition.
OK, I said, is this vertical market still spending money at the moment and if so, have you tied your proposition to business areas within the target customer that still have budget. Well, we’re not sure about that was the response I got.
So by this stage I was quite impressed with the process they had followed and thought that I would largely have followed a similar process myself – albeit with one or two sanity checks. I then asked why they were so focused on this specific industry. I was told that their first and major customer is in this industry so they ‘know’ that the problem they solve is real and that the solution they have is good.
All good I thought. Finally, I asked how they won this first customer. After all, small sales teams have to look for repeatable success. I nearly fell off my chair when I got the response. I was told that their CTO used to work for the first, and major customer and that their own product had been partially developed whilst he was there.
I pointed out that repeating this serendipitous set of circumstances in the future is going to be difficult unless the CTO is going to leave and go work for another company in that industry. My advice was to start their planning again (I would say that though I guess), or at least make no assumptions about market need based on this one, unrepeatable data point.
The moral of this story is that when conducting business planning be honest with yourself about how sales were won. If a customer win came about from some exceptional circumstance – or even exceptional selling, you can’t rely on repeating that again in the future. Look for some other repeatable success.