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The Challenges in Young Companies

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Categories: For the SME, Business Strategy, Management

Over the years I have had the privilege of helping a broad spectrum of types of businesses.

Despite the differences of whether a company was in services, distribution, manufacturing, technology, energy, or another industry sector, I discovered there were common challenges being faced in businesses of similar maturity, that is, how long they have been serving their customers.  To simplify my comments, lets look at them in three broad categories.  These are

  1. Young, typically from start-up through the third year
  2. Stable, usually in their 4th year or longer
  3. Mature, typically 7 or more years

This and a future blogs will cover some typical challenges faced by each of them.  Today’s is focused on generating and managing new and existing customers.

Young

  1. Marjorie was a bright individual, born overseas, and a true self-made entrepreneur in the services sector.  She was completing her professional accreditations, and had become quite insightful in helping business owners with tax strategies.  What was her largest challenge?  Filling the chair across the desk in her office.  Most of her start-up clients were not effective in providing referrals, and Marjorie lived from feast to famine and back to feast again.  Help in generating steady leads in short periods of time came by breaking down her lead generation into key steps.

  2. What was her competitive advantage?  What set Marjorie apart from other planners in her geographic area?  She had more sophisticated insights into tax efficient strategies for her target audience.  As such, it was important to build key phrases, success stories that followed a SODAR (Situation, Opportunity, Decision, Action, Results) structure, and an elevator statement that reflected her unique advantage.

  3. What was taking up most of her time?  Marjorie spent a lot of time with each client gathering information and then more time explaining how each element in an advantaged tax strategy worked.  We showed her that over 75% of the circumstances faced by her clients were identical enough to result in very similar tax strategies.  Potential clients needed to have their fears overcome while learning how sophisticated strategies help them build and keep wealth.  Marjorie just didn’t understand how to create events (in her case, dinner seminars) that would bring in 10 or more couples at which she could educate.  At the end of the event, all were asked to sign up for a personal “no risk review”.  Result? A filled calendar!

  4. Why was the referral process not succeeding?  Marjorie’s initial meetings took 2 1/2 hours and were quite intense for her clients.  She had a great closing ratio, but the combination of financial intimacy with fear about subjecting friends to the same resulted on no one new being sent to visit her.  Solution?  Two free invitations to her next dinner seminar had her clients inviting their friends to the “no-risk” way of getting educated.

  5. What was her marketing budget?  Marjorie had none.  It was important for her to understand that she already had a unit cost of generating one lead (which was documented for her) whether she realized it or not.  Showing her a better way to generate more leads (at a lower cost per unit than her “old” method) allowed her budget for a more effective way to create new clients. 

Summary for Young

  • What makes you different?  Detail it, document it, rehearse it, and leverage it!

  • What takes up most of your time in a day/week/month? Can parts of it be done with many rather than with a few to an objective of filling your appointment calendar?

  • What have you tried that is not working?  Take time to find out why (ask your clients- they will be happy to tell you), and change how you do it!

  • Lead generation costs money whether you planned for it or not.  Take the time to evaluate your lead costs and find ways to do it more efficiently!

Next up, The Challenges in Stable Companies..

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