There are certain key elements to driving organic growth in a software company. Broadly speaking, these are:
- Increasing net new sales
- Maximizing pricing power of your products and services
- Increasing white space opportunities through carefully planned add-on products and services
- Decreasing customer churn
- Optimizing your teams to enable all the above to happen repeatedly
Increasing Net New Sales
Increasing sales of your product organically requires making the most of your marketing and sales processes and people. Areas to focus here include:
- Reviewing your existing marketing efforts for generating leads.
- Comparing lead generation activities by looking at cost per lead, and conversion rates.
- Creating a streamlined process of funneling leads to your sales team.
- Optimizing the close process.
- Ensuring a smooth hand-off to your on-boarding organization.
- Creating a process for catching lost leads or unconverted demos and feeding them back into the process.
- Ensuring your compensation plan is optimized to drive performance where it counts.
Maximizing Pricing Power
Maximizing pricing power is not just about randomly raising prices. The key is to understand market forces, what your competition is doing, but also what your client is cable of. The concept of “maximizing your share of wallet” is key. Activities here include:
- Doing a market study to understand your green field and white space opportunities.
- Identifying the set of personas of your typical client.
- Understanding your client’s share-of-wallet potential.
- Understanding your competition and their pricing strategies.
- Optimizing pricing of your products and services.
- Revisiting your discounting and promotion strategies to ensure maximum return.
Increasing White Space Opportunities
Your existing clients often have additional needs for products and services that your current offerings are not satisfying. It’s important to understand those needs and consider fulfilling them. Key activities here include:
- Understanding your clients’ needs beyond your existing product line, through interviewing and focus groups.
- Understanding the financials for what it will take to create new products and services and what your payback period will be.
- Working with your Product Management organization to prioritize creation of new features, products, and services.
Decreasing Customer Churn
You work hard to gain new clients and often there is not enough focus on keeping them, or winning them back once they have left. You will not meet your growth targets quickly enough if you don’t focus equally on both sales and retention. Key activities here include:
- Establishing clear visibility into your churn rate.
- Conduct win-loss and churn analysis and look for common themes.
- Educate the areas of the organization that are negatively contributing to churn (e.g., support, on-boarding, engineering, etc.) Once clients are in the door, the typically don’t leave you for a better price. They leave you for poor services, lack of features, and service disruptions.
- Assign a leader within the organization to oversee churn and win-back.
- Create win-back campaigns to recapture lost clients.
- Track churn and win-back metrics as you track new new sales.
Optimizing Your Teams
Growing a company requires firing on all cylinders internally. There are core areas that need to be optimized. Focus areas include:
- Ensuring you have the right internal IT tools to allow you to capture key metrics, and have visibility into what is happening throughout your organization.
- Ensuring your marketing dollars are going towards activities that are productive.
- Setting up a sales team to optimize each stage in the process. This requires solid metrics on what is happening throughout the funnel.
- Optimizing key hand-off’s from sales, to on-boarding, to on-going support.
- Optimizing training and support to ensure best execution within reasonable costs.
- Aligning your development and product management processes and people to optimize growth.