The journey from a prospect to a purchasing customer is becoming slower and harder, partly driven by the general caution in the minds of customers today. Growth in business capital spend in markets like the US is expected to come down to 6% this year vs. the 9% in 2021 and 20% in 2022. Though working with slower sales funnels, organisations are striving for profitable business growth driven by the need to deliver on positive unit economics.
Under these circumstances, there are five imperatives to consider and get right in 2023 for companies to drive growth. These will all come, if not already there in active consideration, in your leadership discussions.
Driving Business Growth
1) The renewed focus on customer experience: The customer has less patience nowadays, with multiple and increasing options that are always available. Customer experience is formed across all the touch points including (a) the purchase, (b) product performance and (c) customer support service experiences. Getting this right across all three pillars is paramount and foundational for a business. Usually, the best comes when teams stick to the basics (while viewing experience from the customer lens) and build iteratively on these – while keeping a close ear and with agility to improve.
When customer experience is suboptimal, as it sometimes might, then be fast, clear, simple, and direct in your communication and rectification. In our world today, all of these put together build trust and hence reinforces your business brand and integrity.
2) Prioritise your existing customers and lifetime value: Your customer relationship data should be proactive to inform you of your existing customer cycles of purchase, for example, knowing when they are likely to need upgrades/refreshes/addons and what you can cross sell. Protecting your acquired customer base, against loss to competition/alternatives, is important especially since new customer acquisition costs are typically higher. Conversations are now actively shifting to measuring and extracting life-time value from acquired customers.
While you have a loyal customer base – strive for referrals and testimonials from the base – I have seen some businesses do this well, folding PR and social media efforts to talk about customers adopting their products/solutions. These testimonials are most welcome to sustain momentum and the flow of positive conversations around your product and brand. This holds as much for established vs. start-up organisations.
3) The role of customer self-service and the Cloud: Over the recent past, the expectation has been built for businesses to be ‘always on’ and available – as customers learn, discover, and transact at their convenience and time. Not just for businesses but government services are also largely available and accessible online – hence it is an increasing societal expectation. For this ‘always on’ to work asynchronously, customer self-service options are now de-facto expectations, for e.g., either via an app or the e-commerce website if it supports that. Self-serving customers influence the improvement in business productivity outcomes/gains – and provides support when changes (e.g., pricing, messaging, product availability) need to be quickly reflected out in market.
The Cloud allows you to manage infrastructure and software applications – dialling up or dialling down as necessary. Offering options to customers to pay as you go or pay for what you use (either in the public cloud or cloud deployment on your premise) makes it easier for customers to adopt and try your products/services. The shift is from the capital upfront expenditure to operating expenditure thereby bringing a first level of management on the cost structure. If you are offering products/services with this model, your teams should be equally focused on product utilisation – in a sense of demonstrating ongoing value thus driving utilisation. Conversations around ongoing value – are a marked difference from earlier sales cycles – and are now more repeat vs. one time.
4) Improved ‘listening’ leading to better targeting: With resource spends under strain – both in budget spend and people resources – it will be necessary to drive efficiency in execution. Today, there is a plethora of signals available online around customer interests and intent. Your marketing team should be able to share audience segmentation – carving out those prospects who are more actively researching around your solution areas. Prioritising to reach those prospects who are “in market” makes sales outreach efforts more efficient and allows to the extent possible the personalisation.
5) Position your profitable product mix: With importance on both the top line and margin, equations are no longer only about pure market share, but also profitable unit economics. Positioning the right products, right price/product bundles and opportunities to cross sell are tailored to meet the margin goals in balance to the revenue growth.
A well-functioning business ties the execution of these five areas with people and processes as they manage through change; so that the vision is clearly articulated and the accountability clear among the people, teams and processes. Technology and digital plays the key role in most, if not all, among these above. It is the time for business transformation and growth via digital technology.