There are dozens of growth strategies that a business can adopt. Which ones are right for you?
Every growth strategy should be able to achieve a few key objectives such as achieve sustainable revenue growth, improve customer retention by creating deeper value, increase margins, and be perceived as a brand.
A simple way of understanding which strategies add genuine long-term value is to go through case studies. In this article, we will talk about Salesforce a customer relationship management company which happens to be one of the fastest growing software companies of all time. Founded in 1999, Salesforce’s 2017 revenues were $8.4 billion.
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1. Brand Building with Salesforce Dreamforce Conference
Every B2B marketer knows that organizing and attending events are extremely important for building an enterprise account pipeline. Salesforce has taken events to an entirely new level with its annual conference in San Francisco – Dreamforce, an event that is now the world’s largest software conference.
Prior to Dreamforce, Salesforce used to conduct events called ‘City Tours’ where they showcased new features and their roadmap.
Then, in 2003, Salesforce hosted the first Dreamforce conference with 1000 attendees. Back then it was primarily about product previews and updates and keynote speeches from thought leaders in the industry.
In 2017, Dreamforce had over 170,000 attendees and had over 2700 sessions, hosting speakers like Michelle Obama.
Dreamforce isn’t just about Salesforce anymore. It’s way bigger. But how does it help the company’s growth?
Now Dreamforce isn’t just about acquiring opportunities. It’s a massive brand building exercise for Salesforce. Salesforce isn’t content with just being known in the tech industry. As CMO Simon Mulcahy says, it wants to become a household name.
Considering that nearly every hotel room and AirBnB rental in San Francisco gets booked during Dreamforce, I believe Salesforce is on track to achieve just that!
Events are an extremely effective growth strategy for any business. You get highly qualified leads, get to create a fantastic first impression on those leads, network with other businesses to build strategic partnerships for a go-to-market strategy, and promote your brand.
Start by attending major events and proceed to organize your own events. It’s an expensive growth strategy, but events have a high marketing ROI and should certainly be on your radar.
2. Cultivate a Killer Sales Function with Specialized Roles
Salesforce is known to have one of the best sales functions on the planet. The person who is credited with helping grow the company’s revenue to $100 million is Aaron Ross, best known as the bestselling author of Predictable Revenue – referred to as the ‘Bible of SaaS Sales.’
Aaron led the sales function at Salesforce from 2002 to 2006 during which he came up with a number of innovative growth tactics. The most cited is having more specialized roles in the sales team. Aaron separated outbound prospecting and inbound lead qualification from sales. He maintains that talented salespeople hate these activities and they are quite terrible at it.
Moreover, giving a salesperson too many roles dilutes their focus. It’s extremely difficult for them to work on targets for closing deals as well as prospecting at the same time – and both activities suffer as a result. Talented salespeople are also expensive and it’s far more economical to have a specialized prospecting team.
Salesforce invests substantially in training its sales team. New hires start by going through a sales boot camp – a program where top Salesforce executives also drop into coach people.
Salesforce is also extremely selective in its hiring process. Out of more than 100,000 applicants that it gets every year, the company hires only around 4.5% – lower than the acceptance rate at Harvard!
60% of recruitments are through referrals. Newbies are never hired. Reps for small businesses have at least a couple of years of sales experience, while enterprise-level salespeople bring two decades or more to the table.
The highest ROI growth strategy is usually to invest in building a great sales team. It’s impossible to run most businesses without a sales team. The exception is monopolies (but even Google has a sales team!) So, if you have one, why not seriously invest in it?
Create specialized roles in your sales team, hire talented people who can perform those respective roles, train and coach your salespeople and apply the right metrics for tracking your sales activities.
3. Target Strategic Acquisitions like MuleSoft
Acquisitions, if done right, can also take a company forward in addition to organic growth. You get the acquired company’s customer base and you can use the technology to enter new markets or go deeper into existing markets.
Salesforce has made several acquisitions throughout its history. In 2016, it acquired Krux and Demandware and used those acquisitions to launch its Financial Services Cloud and Health Cloud – both of which are important revenue streams today.
More recently, Salesforce announced the acquisition of MuleSoft for $6.5 billion. Their technology is used to link a company’s apps, databases, and IT infrastructure into a single unified system. As Marc Benioff has pointed out, the acquisition is in line with Salesforce’s strategy to offer more integrated solutions to its customers. More about this strategy in the next point.
Acquisitions are usually perceived to be a growth strategy for mid-sized companies and above. However, that’s not necessarily true. Even if you are valued at just a few million you should not rule out this growth strategy.
Look for startups that have a technology that is complementary to yours, have a solid growing customer base or a have great teams. Either of these possibilities can add serious traction to your revenue growth.
4. Develop Additional Helpful Products to Cross-Sell
Salesforce isn’t just a CRM anymore. It has transformed into a complete set of tools for providing an integrated 360-degree visibility about the customer with its Marketing and Customer Service applications. President Keith Block says that while Salesforce initially engages with customers with its sales cloud, they proceed to demonstrate how they can go beyond the cloud-based CRM paradigm and also provide value throughout the customer lifecycle
Once you have acquired an enterprise account, you should try to generate additional revenues from that company. Think beyond just getting more users – can you develop complementary products that are linked to your existing product?
This is a tried and tested strategy for penetrating deeper into enterprise accounts. When you develop an application for one company – they pay for it, but you can also sell that product to other companies too. Moreover, it’s a highly effective way to increase customer retention – because your systems are so deeply embedded in the company’s processes.
5. Build Partnerships such as the Salesforce AppExchange
How often do you wish your CRM had an additional feature?
Salesforce believed in leveraging the power of a user community to support innovation and customizations. In 2005, Salesforce developed a platform that Forbes called the “iTunes of business software”. AppExchange is a marketplace where developers offer applications and extensions that are based on Salesforce. The platform has both free and paid apps.
AppExchange apps are used by 87% of Salesforce customers and 89% of Fortune 100 companies. IDC predicts that the Salesforce “economy” – comprising its partners and customers will generate $859 billion in new business revenues and 3.3 million new jobs worldwide by the year 2022.
If you don’t have the resources to give customers everything they want, build partnerships with companies who can. Building an ecosystem that keeps your customers happy will increase customer retention as well as build a community of companies/people who will endorse you.
6. Growth Through Innovation
Innovation isn’t exactly a growth tactic, and yet, strictly from a marketing perspective, it will play a huge impact in your growth.
Innovations always get lots of press coverage in top-tier publications such as Forbes, Inc. BusinessWeek, Techcrunch, etc. while products and features which are not innovative struggle to land even one single story.
A mention in a top-notch publication get you hundreds of sign-ups in a single day. Smaller publications and blogs pick up those stories and give you tons of exposure and backlinks.
Of course, innovation also helps you to close more deals and upsell to your customers. Salesforce has products that are customized for several verticals such as financial services, retail, and healthcare.
Salesforce was an innovative company, to begin with. It practically pioneered the concept of SaaS and cloud-based software and was the first cloud-based CRM. And over the years, it has continued to develop several innovations and stay at the forefront of tech.
Salesforce’s most recent notable innovation is Einstein – an Artificial Intelligence platform. Here are just a few things that Einstein does:
- Prioritizes leads most likely to convert based on historical conversion data.
- Captures new data and contacts in the CRM and saves users the trouble of manual data entry
- Detailed analytics for uncovering opportunities, tracking performance and pipeline visibility.
Companies that are innovative usually have the highest valuation. But more importantly, companies that don’t innovate either end up surviving on thin margins or die out entirely.
In the long term, growth strategies and growth hacking can only take you so far. It’s your capacity to innovate that will determine your company’s future.
What’s amazing about Salesforce is how they’ve completely revamped a segment of the business process. What used to be stored in rolodexes and in the minds of salespeople is now open to the whole organization. Everyone can now tap into this powerful tool. It provided more accountability, more reliability and a steady way to document and nurture activities and contacts for businesses of all sizes.
You may not be in an industry as ripe for disruption as Salesforce, but you can still learn a lot from their growth strategies.
Your choice of growth strategies depends on the size of your budget. However, you can adapt each of these strategies to your company size. If you can think of any other notable growth strategies, let us know in the comments below.