#040 Quality of Growth

As an entrepreneur, one is often as asked ‘what’ made you take the leap. Each one has a reason that encouraged them to start a venture - be it shear passion for a product or a domain or taking on a personal challenge to resolve a problem or being frustrated in the corporate race, or even taking over the reins to step into family business. In the B2B world, it’s often the desire to understand a customer’s unmet needs, the drive to customise the product and meet a customer’s expectations, that lead to one taking a plunge into entrepreneurship!

Simon Sinek, an English-American author and inspirational speaker, insightfully stated, "People don't buy what you do; they buy why you do it. And what you do simply proves what you believe.”

In the context of B2B of course, this definition further extends into choosing the right customer! The question around ‘why' you do what you do constitutes the ‘value proposition’ of your product or service. It is not merely a statement; it is a promise that highlights the unique value your business offers to customers, and this cou;d further impact both scalability and operational efficiency.

It’s only when you have a well-defined value proposition that results in generating optimal leads for growth of one’s B2B business. However, this opens another big question: how good are these leads? It is essential to periodically assess the quality and more importantly, persistently follow up with the leads you receive to filter optimal leads, as they directly influence long-term revenue growth of your company.

When your business acquires a new customer, understanding the reasons behind why the customer chose you is crucial. This knowledge allows you to customize your product offering and client servicing journey to ensure sustained engagement. In my experience there are generally three primary reasons that impact a customer's decision-making process:

1.     A Unique Value Proposition:

―     When your customer is a business venture, the choices are influenced by the distinct value proposition offered by your product or service.

―     It is then imperative to ensure that the customer is actively engaging with and experiencing the unique value they signed up for. It is your engagement with the customer that sets the foundation for building a relationship and instils confidence strengthen it.

―     Persistent engagement leads to better understanding of the customer’s dynamic expectations, help you customising your product and results in building client stickiness or loyalty.

2.     A Better Replacement:

―     There are different types of customers; some are ‘first time users’ and the others are ‘existing users’ who are moving to your product / platform. A new user is keen to learn about your offering, whereas an existing user is looking to enhance their customer experience: better customised service.

―     If you are replacing an existing product or service, focus on demonstrating how your value proposition surpasses that of the incumbent, rather than merely highlighting price differences.

―     Remember that laying emphasis on enhanced customer engagement leads to dependency and service is a deciding factor in addition to the improved product or service experience that leads to better value realization for the customer.

3.     A Better Price:

―     Pricing too has a role to play in acquiring customers though it is important to remember that the price offering should enable you to make profit and not lose money!

―     Those who chose to offer a price that matches competition will acquire new customers and result in standard growth. If you choose to lower price to acquire customers, then I suggest you tread with caution as such acquisitions are high-risk because the customer may eventually replace you for the same reason.

―     Acquisitions based solely on pricing decisions are inherently volatile, lacking a significant anchor to retain the customer.

As you strategize to grow your business, evaluate it from the perspective of customer sustainability and assess the quality of your customers. While the customer assesses your value proposition, you too must ensure that your value proposition is correctly understood and decide if it is truly worthwhile to integrate them into your client base.