Most Aussie IT vendors have a financial goal - like selling the technology or floating the company - yet very few seem to choose the right strategies to ensure they achieve it. We ask the critical questions you need to answer - to devise the right growth strategy for your company.
What’s your end game?
Before you dust off last year’s strategy and change the dates, what about first focusing on the ultimate end game? It will make it a lot easier to define
the right strategies, and evaluate tactics that fit and those that don't.
Most Aussie IT companies want to achieve some of these goals. Are any of these yours too?
- Build a global business
- Sell the technology or company to a major player
- Float on the ASX or NASDAQ
- Generate long term revenue
- Do it all again.
6 critical success factors for growth
It doesn’t matter whether you’re in hardware, software or services, the 6 factors that are critical to growth are the same – and none of them is new. The
key is in viewing each of them through the lens of the end game, so you can clearly see their priority and sequence.
These are the 6 factors to achieving each of the goals above:
1.Sales growth – high revenue and growth
2.Technology – clear advantage, considered road map, secured IP
3.People – the right ones trained and well-equipped, with no weak links
4.Partners – effective ones with a plan to retain them and gain more
5.Processes – sales, marketing and management processes defined and efficient
6.Profile – thought leadership demonstrated, built and maintained.
While some of these are fundamental to business planning, marketing plays a key role in achieving many of them. Building a global business could burn a pile of money, so keeping these factors in mind will ensure your marketing spend is focused on results, not just activities. After all, marketing should be an investment with a high return, not an expense with almost none.
There are only 4 sources of sales growth, but it’s common to forget one of them, and most often it’s your customers.
- Existing customers for existing products. The key here is retention, which is far cheaper than replacement. What do you have in place for account management, and customer-only programs, events or incentives? Do you treat customers separately and specially? Do you run user groups to uncover product pitfalls and desired enhancements?
- Existing customers for new products. This is growth of existing customers. How effective are your programs to up-sell (advanced features) and cross-sell (related products)? How can you automate this?
- New customers for existing products. How well do you leverage your existing customers to gain more just like them? If overseas markets are vital to growth, how will you leverage local success to establish and grow them? What are the logical markets to target in sequence, based on local customers, partners and relationships? Do you need to set up an overseas office or can you expand via partners? How much time and money will it take to establish offshore? Can you build step-wise from Australia and leverage each new market for the next?
- New products for new customers. This is the most expensive of the lot because, first, you have to educate the market. What potential does your technology have? Could you quickly spin off a new product for delivery by new means to a new market?
Your technology is critical to your end game. It’s most likely the main reason that investors will part up with money, be it in for shares or acquisition. Take a close look at your technology, with a focus on:
- Protection – is there Intellectual Property? Is it protected?
- Enhancements – what is the goal of the product road map? Are you catching up with trends or setting them? Could you look outside the square to set a new product direction and eclipse your competitors?
- Pitfalls – are there problems that must be fixed? Or could you find accepting markets for interim cashflow, while you optimise the
product for more demanding, more profitable markets? Do you have a product or module that requires a disproportionate amount of support? This will
limit your scalability, so you might want to kill it.
- New products – what does the market need that you could develop and test quickly?
- Delivery – could you re-form your product for delivery in new, more automated ways that require less human input? (Possibly new markets too)
- Updates - how efficient is your product feedback and update process?
- New technologies – what related technologies could you acquire or partner with - to help you leapfrog a development stage?
- Support technology – what technology will you need to support your growth and make running your business more efficient with lower overheads?
Your people are important - and the best ones need to be retained, up-skilled and incentivised on results aligned directly with your end game. That means
there may be hard decisions about the ones that aren't the best.
Your people include sales engineers, engineers, developers, customer support and administration staff. You’ll need to consider:
- Do you have the right people with the right attitude and aptitude for growth?
- Who are the weak links and can they be strengthened? (If not, the answer is clear)
- What new skills will you need (do you need these in-house or can you outsource)?
- What enhanced skills will you need (sales, communication, presentation)?
- What product training is needed (existing products and enhancements)?
- What new people will you need to grow a global business?
To grow quickly without expanding your overheads, partners play a key role. They could be technology partners (bundled offerings), consulting partners (external skills), distributors or resellers.
Here are some key questions:
- What do ideal partners look like now (skills, size, vertical)?
- Do you have the right ones on board to grow the business in Australia?
- Will you need different ones to expand to global markets?
- How well is the Business Case defined for them?
- Do you have a defined Partner Program in place?
- How will you manage and grow partners (people and processes)?
- How can some of this be automated?
These includes marketing, sales, support, account and partner management and business administration. The key questions relate to how well-defined they are and how much they could be automated.
- Is your sales process well defined?
- Where are the gaps, obstacles and drop-off points (and what is needed to fill them)?
- Is your marketing process defined and working?
- How do you monitor and measure effectiveness of sales and marketing?
- Do your sales people have the tools they need to qualify, progress and close deals?
- How do you announce product updates and enhancements?
- Do you have an account management process and dedicated resource?
- Are your accounting processes defined and efficient?
Investors, partners and potential acquirers will only be attracted if they know you, and feel comfortable with you. That doesn’t mean you have to be a household name, but you need to be known where it matters.
- In what markets can you demonstrate thought leadership?
- Do you have the people, tools and processes to build and sustain it?
- Do you have the right relationships (analysts, media, partners, industry commentators, associations) and how quickly can you build them?
- What is your social media profile like?
- Will you need PR (do you have skills in-house or do you need to outsource)?
- How can you automate most of this?
These 6 factors, if viewed through the lens of your end game, will align and order your priorities. They will allow you to view new opportunities - be
they your products, technologies, partners or marketing tactics - and decide which to act on and which to pass up.
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