A Sound Plan
Developing and consistently following new business strategies can translate into additional revenue.
FINDING BUSINESS development techniques that present new revenue opportunities and consistently work is always a challenge. If there's always one business certainty you can count on, it's that you need to constantly tweak and fine-tune your techniques every 12 to 24 months. Your business development plan should be thought of in a strategic and tactical manner. For example, new revenue streams may come from future and existing customers. This means a different strategy and tactical plan should be put in place to address the ubiquitous question, “What's important to the customer?” Once you know this, your plan will begin to take shape.1. Establish a discount policy, and stick to it
New business is great, but if it's not profitable, who cares? For example, what's your company policy on discounting? One strategy is to discount or give away low-margin items because you'll make it up on the services or ongoing service contracts. For many companies, this has become a lucrative strategy. While discounting is a dirty word for some companies, for others, it's the core of their strategies. Either way, some strategy should be put in place. Discounting might be offered in a competitive situation that has a lot of profitable opportunity after the sale with add-on services, support contracts, or additional projects.2. Cross-sell and up-sell
Cross-selling and up-selling your clients is a great way to strengthen relationships. Cross-selling is the process of selling other products to existing customers, while up-selling is the process of selling upgrades or robust products and services to existing customers. Presenting your client with a variety of business solution options can become one of the biggest and most effective strategies for building revenue that a company can put into action. One way AV firms can properly identify these opportunities is with a Customer Relationship Management (CRM) system in place to centrally locate this data. You'll then be able to mine that data and determine the best customers for those opportunities, and target them first. With the right combination of clientele and account management, cross-sell and up-sell techniques could feed a lifetime of new revenue.3. Partner with suppliers
By using a co-op partnership with your manufacturers and/or suppliers with this strategy, you could reduce costs and maximize profit. One way to build and strengthen your relationships with your clients is to host a customer conference. Show products that you're trying to introduce to your mix of offerings. Provide workshops on optimizing the products they currently own. Invite prospective customers so you can demonstrate product and service competency over your competition. This also enables prospective customers to speak with your referenced customers of similar size and scope.
One systems integrator currently using customer conferences to build revenue is West Chester, PA-based Advanced Audio Visual. Its CTEC (Convergence Technologies, Expo & Conference) show includes many of the company's manufacturers and suppliers, and offers sessions complete with technology demonstrations of the latest and greatest products. Advanced Audio Visual President Jay Armand credits CTEC for bringing the company closer to its customers, and exposing it to new and different customers and opportunities.
“Our annual CTEC show is a revenue driver and a differentiator; however, we felt the event had lost its branding by becoming more of a regional AV show than an Advanced AV show,” Armand says. “So, we've doubled the show's marketing budget and moved to a different, larger venue — all in an effort to drive the Advanced AV brand back into focus.”4. Add new management expertise
Sometimes building revenue means adding new expertise to your organization, which is what Armand did at Advanced AV. The company uses its CTEC show to build top-line and bottom-line revenue, but recently added a new strategy to focus on bottom-line results. “We've added a materials manager to our executive team,” Armand says. “He has introduced us to, and is implementing an MRP (materials resource planning) system. It's a whole new world of information that I didn't know existed.”
The materials manager identifies current and future products that a company is and could be using. A great materials manager will help with configuration, find out where to get the best products, and negotiate the best prices.5. Pay attention to your cash position
Companies love to look at top-line revenue as an indicator for growth, but don't always consider their profitability. One indicator of strong growth is your cash position (how much you have on hand or how liquid your assets are).
Verne Harnish, CEO of Ashburn, VA-based Gazelles, a firm that helps businesses with growth strategies, says that companies should try to double their cash position every year. That means if you have twice the cash at the end of the year than what you started with in the beginning, it indicates your ability to grow, but more importantly shows financial health and liquidity.