Over the past 14 years we have worked with organizations to improve performance, with a focus on improving their core day-to-day business model. Here are the top growth and cost-focused opportunities we’ve seen that quickly and dramatically improve performance:
Growth-focused opportunities
There’s no better way to improve performance than by growing efficiently. Holding costs steady while growing the topline delivers higher margins while enhancing company culture and employee engagement. A key theme to quickly drive the topline is focus. Organizations often spend so much time “covering all of the bases” that they spread themselves thin and miss out on opportunities to win where it’s easiest – with their core customers in their core products and services.
1. Focus on core customers
Everyone knows the Pareto Principle or the 80-20 rule, but companies are rarely disciplined when applying it to their customers. The appeal of a new logo, expanding customer counts, or adding net-new licenses or services all result in a fragmented customer base. Rarely do companies capture 100% of a customer’s spend; expanding with current customers is much easier and more efficient than increasing customer count. An over-emphasis on customer growth can lead to poor customer experience and churn, further challenging top-line growth. Invest the time to understand who your most valuable current customers are (including actual value and potential value) and develop initiatives and compensation models to increase share of wallet with them.
2. Focus on key partners
Organizations often work with partners to re-sell or implement partner solutions. They frequently partner with all leading solution providers to offer their clients the maximum amount of choice. While a firm’s partner page may showcase impressive, well-known logos, the costs associated with achieving this can be high. Partners require significant investment, including training and certification for team members, as well as the ongoing management of partner programs. This is time-consuming, with activities such as weekly sales meetings and annual conferences requiring continuous attention. Most importantly, partners often assist organizations where there is a committed partnership, passing along leads and collaboratively building business. Less is often more when it comes to partnerships, and focus can help to both increase revenue while lowering costs.
3. Improve the customer experience
Organizations invest significant time, effort and resources in growing their client base. Unfortunately, these efforts can be undone if customers are dissatisfied with their experience and leave. Customer churn can be incredibly damaging to an organization, and it is often under-emphasized due to how the metrics and incentives are structured. A robust, structured analysis of the customer journey can help to pinpoint opportunities for improvement and retain customers. From initial onboarding to key “moments that matter” to annual renewal, each touchpoint with customers can be analyzed to understand where an organization can improve service delivery. Dissatisfied customers are much more likely to tell others about their experience than satisfied customers, so getting the customer experience right helps to maintain revenue while supporting new customer acquisition through positive word of mouth and referrals.
4. Increase the relevance of core products and services
Delivering products and services that meet customer needs better than competitors is a winning solution to growing topline revenue. Organizations often get stuck in the belief that their success to date will continue to deliver success in the future. Change is difficult, and improving products and services is time consuming, costly and risky. However, a larger risk is that the market changes, leaving an organization behind.
The starting point should always be the customer. Interviews, focus groups and analysis of customer trends will uncover unmet needs in current products and services, and an analysis of the competitive landscape can highlight where competitors are placing their bets.
5. Improve the performance of your top sales resources
Top salespeople usually drive a high proportion of a company’s revenue. Surprisingly, growth initiatives often focus on improving the performance of the poorest performing salespeople. The assumption is that top salespeople have a “limit” to how much they can sell, and this is often reinforced by targets and incentives. Rather than improving the performance of poor sales team members, the fastest way to growth is to support your top performers to do more. Two opportunities to unleash the potential of your top salespeople include:
a) Revise sales targets: Sales targets that are consistent across the organization are unrealistic for bottom performers to achieve, and not ambitious enough for top performers. Combined with a hard cap on bonus structures, there’s no incentive for top performers to sell more. If caps prevent high performers from earning more, modify or remove them.
b) Free up capacity: To maximize the efficiency of top salespeople, free up their time by reducing or automating administrative and after-sales tasks. As a win-win, involve underperformers in supporting roles, allowing them to assist high performers while building their own skills and capabilities.
6. Invest more in winning channels
Investing in a robust channel strategy is rightly an important focus for most organizations. Brick-and-mortar retail, direct sales, online, and partnership models are just some ways that organizations can sell their products and services. Often, this broad focus minimizes impact as the spread of resources across multiple channels takes away highly productive spend from winning channels. Taking time to understand channel performance and productivity can help organizations to better prioritize spend and deliver higher and more profitable sales.
Cost-focused opportunities
Many of the growth-focused opportunities listed above will naturally lead to a reduction in costs, given their encouragement to focus. There are also a number of cost initiatives which can quickly contribute to a high-valued organization:
1. Eliminate under-performing products or services
Organizations regularly add products and services to appeal to customers, meet unmet needs and differentiate themselves from competitors. The result is often a long tail of low-revenue offerings that contribute very little to the top line, while consuming a disproportionate share of resources. Conducting a comprehensive product and service review to eliminate poor performers can focus time and energy on winning products and services and result in a more efficient organization.
2. Push customers towards lower-cost service channels
Customer service can be costly. Technology allows an organization to serve customers in lower-cost ways than through the traditional phone, branch or retail channels. Improving online capabilities is the clearest winner, as allowing customers to self-serve through a web site or online form is low cost and can often enhance the customer experience. Chat is a solution which has been around for years, and generative artificial intelligence (AI) is increasing its effectiveness because chat now feels much more like communicating with a human front-line employee. Virtual agents have progressed in leaps and bounds assisted by AI, and integration with back-end systems can create a seamless experience that not only directs customers to the right queue, but can often execute tasks and activities. Enabling these low-cost channels is in itself not enough to drive meaningful savings; customers need to be educated and made aware of their existence and capability. A well constructed “omnichannel” strategy can dramatically lower costs while improving the customer experience.
3. Re-organize, restructure and re-align roles and responsibilities
Change in organizations is constant, and organizational design rarely keeps pace with these changes. Advances in technology, shifts in customer demand, re-prioritization of products and services, and turnover all suggest the need to take a step back and redesign roles and responsibilities. A concerted effort to redesign an organization to focus on effectiveness can have a significant impact on performance, lowering costs while growing the topline.
4. Redesign highly manual processes
Emerging technologies are increasingly adept at automating manual business processes. Optimal character recognition automatically reads documents and emails, robotic process automation executes process steps and generative AI ingests broad datasets to synthesize insights and recommendations are all examples of ways that technology can free up people to focus on value-added activities.
5. Lower procurement costs and eliminate non-essential spend
Organizations must review and analyze their ongoing spend on products and services to lower costs and eliminate spend on non-essential items. An effort to optimize spend can deliver savings in a number of ways:
a) Eliminating non-essential products and services: Over time, organizations amass a broad set of products and services that are rarely, if ever used. For example, a company may pay monthly fees for out-dated technology licenses that are rarely used. Analyze where cash is being spent over a typical month and question whether that product or service is truly essential. Look at the “long tail” of expenses to find spend on seldom-used items – those small, recurring monthly expenses can add up to meaningful savings.
b) Consolidate spend: Spending on similar or the same products and services provides an opportunity to lower costs through consolidation. Taking the full value of purchases back to vendors to seek volume discounts and increase negotiating leverage can dramatically reduce costs.
c) Manage internal spend: Reviewing and revising spending and expense limits such as travel expenses and entertainment policies ensuring that guidelines accurately reflect what makes sense for the organization.
To achieve sustainable growth while managing costs, it’s essential to choose the right starting point. Whether you focus on optimizing sales channels, enhancing customer experience, or empowering your top sales performers, growth can be achieved with any of these options. Likewise, reducing costs by streamlining underperforming products, reassessing expenditures, or leveraging technology is another key. There are multiple options available; selecting the right one for your business will set you on the path to improved performance and competitiveness in the market.
Are you ready to improve performance? Contact us today to discover how our proven growth strategies and cost-saving techniques can help you drive performance and efficiency. Let’s explore how we can tailor these opportunities to meet your unique business needs and goals.
By: David Burnie, Principal and Founder
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