“I’ve often felt there might be more to be gained by studying business failures than business successes. In my business, we try to study where people go astray and why things don’t work.” -Warren Buffet, 1991
With the end of January approaching, I suspect I will be the very last person to wish you a Happy New Year in 2012. While I hope this will be a great year for all of you, let’s not close the door on 2011 without some collective reflection – which brings me to an interesting observation.
In work, like life, the essence of adaptive change is learning, and the most useful and transformative learning stems from the recognition and analysis of our failures.
While success has lessons to teach, we have the ability to learn far more from those unpleasant moments when we’ve inadvertently lost the plot.
As salespeople, we often interact with individuals and corporations who wish to benchmark themselves and their organizations against world-class firms and apply those new found best practices to their own set of circumstances. I have been asked to discuss emerging trends and best practices more times than I can possibly remember. However, in 20 years, I’ve never had one single interaction when someone asked me to share my thoughts on worst-practices.
Worst practices are certainly worthy of discussion. What are some of those negative trends that you are currently seeing? What were some of the great sales lessons 2011?
As a person who interacts with VP’s of Sales each and every week, I was exposed to one reoccurring theme far too often. Over and over, I heard enterprise-sales efforts disproportionately focusing on executing organic growth strategies within existing client accounts while completely diminishing any emphasis on new-business development. The strategy is understandable. In these risk-adverse times, new business engagements are trending smaller and smaller as concepts need to be proven and quantified before large-scale investments are eventually made. As a result, many companies are focused on trying to convert that $2 million dollar customer into a $10 million customer. In theory, this is completely acceptable. We’ve all seen studies that point to the high cost of sale associated with establishing new client relationships. However is this strategy truly sustainable?
I think companies are making a mistake completely turning focus away from new business and betting big on internal expansion. Internal expansion of business within a smaller set of existing customers might seem easy, but it’s intrinsically less valuable than establishing greater market share. New business development is difficult for the reasons already mentioned. However, de-emphasizing greater market share is only for short-term thinkers. Companies who repeat this strategy for too long will eventually suffer greatly as business must seek growth in order to survive.
What’s the right sales strategy regarding organic growth vs. new business development? Where are you spending most of your energy? What worst-practices have you seen this year?
Until next month, good selling.
P.S. Go Giants!
Will Petruski is myGreenlight’s VP of Sales. Follow him: @wpetruski.