Five Ways To Grow Your Business Right Now6:27 PM EST Thu. Sep. 23, 2010
It's a big achievement: Posting revenue growth of any sort is something to be proud of in the shadows of a recession. But the companies on CRN's Fast Growth 100 list have experienced phenomenal increases in revenue -- 20 percent or more. Getting there is a combination of hard work and an ability to truly understand customers' needs.
CRN's Fast Growth companies are a resilient bunch. Our measuring stick was a company's average percent of revenue growth between 2007 and 2009 -- years representing the throes of the recession. Not only did these solution providers and IT consultants weather the storm, but they weathered it with an average growth rate of 110 percent.
Those are numbers no one can argue with. Want to crack the code? Here are ways from the fast-growing companies themselves -- along with an industry expert -- on the best ways to achieve similar success.
Tip No. 1: Listen To Your Customers
"Follow Grandma's advice: "You have two ears and one mouth.’ Use them in that proportion," said Malcolm Frank, senior vice president and chief strategist at Cognizant (2010 Fast Growth No. 55). Frank explained that at the start of the recession, Cognizant CEO Francisco D'Souza really focused on understanding how customers were viewing the economic environment. A large proportion of Cognizant's customers were in financial services, and if that ship didn't right itself soon, the solution provider would feel the waves.
After several weekendlong monthly meetings with top management in Germany, a picture began to emerge. "This was not a cyclical recession, it was a secular one," said Frank.
Cognizant's program, known as "Shining Through the Fog," took shape from those executive gatherings. The program focused on investing in Cognizant’s business and on understanding how customers need to invest in their own enterprises.
"It's really tough for a client to make changes when revenues are flat. We had to work with them to free up costs, to determine what gets outsourced, what goes elsewhere," Frank said. "Then they have to take those savings and invest them into core competencies to win in new markets."
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Tip No. 2: Get Into Virtualization
More than half of the solution providers on the Fast Growth list offer virtualization services. Don James, CEO of Bear Data (2010 Fast Growth No. 49), says it's one of the drivers of his business.
"We want to offer additional services to clients and be more than a supplier of hardware, offering assessments and services to grow customers' businesses. There is a need for virtualization services for every size client in the marketplace," said James. "Every end user has some sort of virtualization project. Companies are finding some application they can virtualize and therefore can save on some back-end infrastructure cost, whether that's hardware and software, power and cooling or space. We are seeing more of those [virtualization] projects coming to fruition."
And that has led James to continue hiring during the past two years, resulting in the addition of a number of offices. "You can't be afraid to hire. Yes, some projects have been pushed out. But you look at new geography or new markets. There is still IT spending."
With new hires, James feels it's important also to have a physical office location: "Some of our competitors feel they can have a person working out of a house. We pay for an office location, because we feel it gives us a better presence."
Tip No. 3: The Customer Is King
When the economy is in a rut, customers want to spend what money they do have with providers they trust and with which they have a good rapport. They’re worrying about their own sales -- so making it easier to do business with your company will go a long way toward customer loyalty.
"We went back to the basics and focused on customer experience and satisfaction. This not only helped with customer retention, but helped us grow our customer base -- we listened to our customers' needs and priorities, which helped guide us in our decision to widen our capabilities in adjacent lines of business," said Michael Souders, president and COO of Netarx (2010 Fast Growth No. 19). "We also concentrated on aggressive business development, and we invested in marketing to stay top-of-mind with our customers."
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Tip No. 4: Invest In Marketing
Getting the word out is a tried-and-true means of increasing share, but counterintuitively, marketing is often one of the first areas cut by companies when times get tough. Fast Growth companies know the bottom-line value of strong marketing; just as Netarx went ahead with its marketing plan, so did public-sector specialist Carahsoft (2010 Fast Growth No. 14).
"While I know that some companies may be experiencing a downturn in demand, our public sector business remains strong in all sectors -- even in the state and local market, which may be one of the hardest-hit verticals," said Carahsoft President Craig Abod. "In fact, by redoubling our marketing efforts and tuning our message to focus on technologies such as VMware, Adobe Connect and Adobe LiveCycle that help customers do more with less, we were able to grow our state and local business by almost 100 percent over last year."
Tip No. 5: Hire A Good Lawyer And Tax Accountant
Entrepreneurs are at risk of losing thousands of dollars a year by not using the proper tax strategies, said Deborah Sweeney, CEO of MyCorporation, an online legal and business filing service focusing on entrepreneurs and small business. Small companies in particular -- even fast-growing ones -- don't always choose the correct incorporation structure or take all the tax deductions to which they are entitled. Companies with revenue of less than $10 million made up one-quarter of the Fast Growth list-- and those are just the types of companies that Sweeney said could use the advice of a good lawyer and tax accountant. In addition, an attorney can offer suggestions about trademarking a company's name, product or services -- crucial for stepping up those marketing efforts.
October is Fast Growth month on CRN Community! Executives from Fast Growth 100 solution providers will be blogging daily to share their secrets to growth. Join the conversation at community.crn.com/groups/fast-growth.