It is that time of year most business and sales managers dread, regardless of industry. That’s right, it’s budget time—the time when you have to remember how to use Excel and you seem to spend more of your day in front of spreadsheets and calculators than customers.
Budgeting and forecasting usually consist of a plethora of formulas combining current industry trends, customer feedback and a Magic 8 Ball. Regardless of how painful the process, it must be done, and the more realistic your forecasting is, the better your business will run in the coming year.
During this process you have to make some strategic decisions, especially around your sales strategy. There are two basic ways you can increase sales: Grow your customer base or grow your customer. In other words, you can increase revenues either by prospecting for new customers or selling more products and services to your existing customers. There are pros and cons to both strategies, and the nature of your current business should determine where the greatest opportunities lie.
The first reaction of most business owners is to look at their current customer base and figure out ways to upsell them, become more ingrained in their business and deliver larger programs. This is especially true for solution providers as they migrate their customers over to a cloud environment and offer them managed services and virtualization upgrades. This goes way beyond the basic product sales-and-service sell and into recurring service revenue streams.
The cornerstone of the forecasting process should be evaluating which customers are good candidates for cloud and managed services, and whether they can/should migrate one function at a time or one department at a time. As the solution provider, you will need to prove the efficiencies gained far outweigh the costs incurred.
The second growth strategy, and perhaps the more difficult one, is prospecting and bringing new customers into your customer fold. Solution providers typically fall short in this area because they just don’t have the time—they are too busy servicing existing customers. This can be a huge mistake.
Today’s social media platforms make it easier and more affordable for solution providers to reach and interact with potential new customers. A well-targeted digital marketing plan can reach more prospects quicker than ever before. Plus, digital is now the medium of choice for gaining information and interacting with these prospects, who prefer to be reached via email or social media.
Also, partnering with companies that have synergistic skill sets is a great way to get into new accounts. Sometimes you have to give up control of the customer, but let your work speak for itself and the business in these accounts will come. The only way to do this is to be an active member in your industry. Attend industry events by CompTIA and others, as well as vendor channel events. Reach out to industry press such as The VAR Guy and let them know your expertise so you can be a source for a quote. Exposure equals business opportunity.
Also, a great sales teacher once told me to make a list of customers and don’t leave the office until you made at least one new call a day. For some that can be three new calls, but start with one. The only way to get new business is to find new business. It has to be front and center every day.
There is a third, difficult decision solution providers must make about their sales strategy—getting out of bad business. Sometimes, it's necessary to fire customers. An abusive customer who sucks up all your service time and doesn’t want to pay for it or a customer who doesn’t pay on time or adhere to the agreed terms can be more problematic than beneficial. These often are the same customers who always threaten to take their bat and ball and go home. Do it for them. Their growth potential is limited anyway. Life is too short to waste with bad people. It creates an unhealthy business environment and kills morale.
Thinking about your sales strategies as you plan your budget could mean the difference between meeting goal and exceeding it in the next year.