7 Deadly Sins to Avoid When Expanding into a New Market
One of the questions we’re asked most often is about the best path to take when a business is ready to expand. This can mean a wide variety of things - entering a new geography, expanding into a new vertical industry, adding a new product, or going after a new customer segment. No matter what expansion means to your business, it’s important you tackle it strategically.
Over the years we’ve noticed seven key areas companies often get wrong when trying to expand. Here’s how they’ve missed the mark, and how you can avoid making their same mistakes.
1. DON’T Make Your Value Proposition All About You
This shouldn’t be a surprise - your customers don’t really care if your value prop will help you get more customers or add new markets.
They only care about what matters to them.
An example of a poor value proposition we’ve seen is : “We are growing our customer base by 100% every year.”
The company who was using this statement believed it would give their customers confidence they were a growing company, but the customers immediately tuned out.
A better value prop tells the customer exactly what they can expect. Two companies really stick out in this sense:
Target: “Expect more. Pay less.”
Salesforce: “Sell smarter and faster with the world’s #1 CRM solution.”
Instead of making your value prop “all about you”, these companies made it it all about their customer. An effective value proposition tells customers what they can expect if they do business with you. It shows them that you understand their biggest challenges and goals. It convinces them you have the experience and knowledge of them and their industry and are confident you can help them save money, save time, expand, and grow.
2. DON’T Fill Your Value Proposition with Fluff
Your customers don’t want to read about platitudes, they don’t want jargon, and they don’t want to be confused about what your solution will do for them.
They want facts and data so they can understand exactly where and how you can help them.
An old HP value proposition was: “HP provides the products, services, and solutions that help you simplify IT. Because your business is everywhere you are.”
This doesn’t really tell a prospect anything concrete.
Instead of talking about high level concepts, put your value in dollars and sense for your customer.
Specifically, if they implement your solution, what costs will they save? What time savings will they realize? What new revenue streams will they open up? What results have other customers experienced when implementing your solution?
The more you can monetize your value proposition in their terms, the more relevant you will be to your prospective customers.
A stronger value proposition example comes from Concur: “The paperless expense solution: Organizations that invest in an end-to-end expense- management solutions see processing costs decrease 37% while policy compliance increases 44%.”
This clearly spells out what the solution does (manages paperless expenses) and monetizes the benefits of cost savings and compliance increases.
3. DON’T Overcommit and Underdeliver
It takes a lot of money and effort to secure a customer. Don’t throw that away by overpromising and under-delivering.
Customers don’t want to have to worry about your ability to fulfill their order or meet their service needs. Not meeting a customer’s need causes extra work for your team, and frustrates your customers. Your customer wants to know that when they sign with you that they will have a delightful experience.
Instead of leaving their needs to chance, anticipate what your customers will need and do an honest self-assessment of your ability to deliver to each need. Make sure each team is ready and able to deliver.
If they’re not, put on the brakes until you can build capacity, or look for alternative means to add capacity and capability such as partnering. This ensures you’ll be able to deliver the level of service you want to be known for.
4. DON’T Under-develop Relationships
We’ve talked to a lot of companies that tell us they have solid customer relationships. When we ask who they’re working with at their top accounts, they’ll give us one person’s name. Having a relationship with only one person at their customer puts anyone’s business at a significant risk.
If this person leaves, you’re back to square one.
Instead of putting all your eggs in one basket, create a list of various departments, titles, and roles for the relationships you really should be developing. Next, create a plan to meet these people and align similar roles and titles from your own organization to their peer levels at the customer.
There are many benefits to creating and adhering to a coverage map. With more contacts and a cadence of calls, deeper relationships are developed and more knowledge about the account can be uncovered. We’ve seen companies add more value to the customer with this deeper coverage model, and we’ve seen genuine friendships develop.
5. DON’T Consider the Deal Done when the Client Signs
A common mistake we’ve seen over the years is when companies consider that a deal is complete upon contract signature. On the contrary, this is when the real work begins!
Ideally, you will have a map of the entire customer journey, from initial product selection through to the end of life of your solution. The onboarding step is the first one after selection and purchase, and is the first one that gives them a taste of working with you once they transition from prospect to customer.
Instead of leaving it up to your customer to figure out how to get started with your solution, a better approach is to put yourself in your customer’s shoes and create an onboarding process that touches on every step they’ll need to take in order to be successful with your solution.
List these steps out, and determine where your processes are smooth and simple, and where they are gaps or complexities. If you don’t know what your customer goes through once they have your product in hand, ask them! Where were they surprised or confused? What took more time than they expected? What would have made their implementation faster or simpler?
In our experience, customers are happy to share their onboarding experience if they think you are listening and sincerely want to improve. And with this information, you can now prioritize the top areas to address to optimize your onboarding experience.
6. DON’T Keep Your Critical Priorities A Secret From Your Team
Especially when entering into a growth and expansion mode, your team needs to be informed of your intentions, purpose, goals, and strategy.
Instead of having your team guess and gossip, share what you can, when you can. Of course, you don’t want to share anything you legally cannot, but keeping lines of communications open gives you the best shot at alignment and results.
Sharing goals and strategies leads to a shared sense of purpose and ultimately to the best results. When everyone knows what the company’s goals are, they feel a part of the plan and the team. When employees know how their individual role contributes to the overall company mission, they feel pride and accountability. With a shared purpose, your team will be more trusting and will look for more ways to make an impact.
All of this is only possible with a commitment to regularly communication. Any combination of face to face, video, webinar, and email can be used to share critical priorities, results, and other news that keeps the team focused, on the same page, and motivated. The format is not as important as the consistent outreach.
7. DON’T Measure the Wrong Things
Another common problem we’ve seen is companies measuring too many data points or the wrong things. Aiming for too many metrics typically means none of them get proper attention, and measuring the wrong things can lead to unintended consequences.
Instead of picking 20 metrics or Key Performance Indicators (KPIs) or having every leader put in their favorite metric, companies need to align on their top priorities and then determine the critical few metrics that will help drive the them. This could be securing 10 net new customers, increasing revenue from services by 25%, or selling $1M in a specific product.
Focusing on only a few targets is also a key to effective compensation planning. Research we’ve read points to having ideally three metrics (but no more than 5) in a comp plan, otherwise none of them are big enough to change behavior.
Another consideration is to create a sense of shared ownership to the goals. Marketing, sales, product teams, etc should all be pointed in the same direction. You don’t want the product team celebrating because they met a profitability goal, only to have the sales team bemoan the fact that they couldn’t meet their quotas because the product teams were inflexible with pricing. Aligned and shared metrics ensures the teams will work together, not at cross purposes.
Once you’ve aligned on the KPIs, you need a streamlined process to review progress toward your goals. Determine the reports you’ll use, and keep them simple so there isn’t competing data. Establish a checkpoint cadence where the key stakeholders can all review the same data and create an action plan if needed.
A Final Word on Expansion
We've seen businesses accept the status quo, take their eye off of innovation, not invest in the user experience, or take their customers for granted. These companies fail as soon as they begin to neglect to address what they need to be future-ready.
Businesses need to expand if they want to stay vibrant and relevant. So the question isn't if but how to thoughtfully approach the next phase. Following the guidance in here can help you successfully take that next step.