The Red Review - A short solo ramble on how to double the margins of your firm by joining the dots through your funnel
In this episode, Jeremy joins us from the car on a long drive home with a solo chat through our thinking on joining the dots through your funnel to optimise growth and returns.
Find Jeremy Brim on LinkedIn - Jeremy Brim
Transcript
[00:00.4]
I'm Jeremy Brim and welcome to the Red Review podcast, brought to you today by Growth Ignition, the transformation consulting and enabling tech business. All in the work winning space and the Bid Toolkit, our online bid process and guide. So, hello, I've got a long drive home, so we've not a lot better to do.
[00:22.6]
I thought I would talk you through what we're up to with this date double your margin campaign. So we've realised through our client work and through our research that there have been a number of times, I think we've got six case studies now across when I was employed, when I was a board director of a business, and then since I started Growth Ignition nearly seven years ago, where we have taken businesses or big business units of bigger businesses on a journey and they have doubled their margin in pounds and pence across that journey or subsequently using our methodologies and our tools.
[01:06.9]
And so it was about time. You know, I've been busy for the last few years working with lots of great people, delivering lots of training and coaching people and doing bits of transformation, but we've not really tied it together as a proposition to the marketplace.
[01:23.2]
We've not really been overt in what our capabilities can do for our clients. And so I'm going a bit of a journey with you in real time, I guess, where we're starting to articulate that better. And so, as you might have seen on LinkedIn, I'm doing a series of, you know, between four and eight minute videos taking you through some of the elements.
[01:45.8]
It started with me and a whiteboard where I'd walked a client through a funnel end to end, and how to in effect go on a journey to scale their business and ultimately make it much more profitable.
[02:02.3]
And so I can talk you down through some of those key steps, but we've been doing it through the series of videos, but yeah, I thought I might as well, while I've got some time, talk you through how it all hangs together again and signpost people that haven't seen some of the content to it.
[02:19.1]
So fundamentally, 500 people a month in the UK search for the term bid writing training or a variant of it on Google and what we find is that is because they are losing tenders and they think it's because they don't know how to write them well enough, or certainly that's a component of what they think is impacting their win rate.
[02:43.4]
And that's true, but it's only really 20% of the problem. Where the problem really lies is further upstream all the way Back up at the top of the funnel. So what does he mean by funnel? So, fairly simply the key steps in a funnel for a business to business or a business to government organisation at the very top of the tree, the opposite end of the funnel is a business plan, a properly market research business plan that tells the business where to fish for work, in what ponds.
[03:15.8]
So where is the money going to be with who and where should we therefore go prospecting for it? That then acts as the North Star for the business. It enables you to stay focused and only pursue business with the right sorts of clients in the right kinds of markets.
[03:36.0]
And we'll come to that in a bit. That then informs your marketing and events strategy and planning. And so we should basically try and join the dots throughout the funnel. So there is this least wastage and energy is dissipated least and remains focused on those key clients and that key pipeline of work as much as possible.
[03:57.1]
And so your marketing and events activity should be focused on account based marketing, where you're funnelling all of your energies, all of your marketing activities to the clients and their other stakeholders who in effect are the decision makers on your bids that come later on.
[04:17.8]
So when you tot up all of the opportunities from the market research and from your current pipeline, let's just say that's 100 opportunities. For every one of those opportunities, there will be five people that ultimately read and score your bid, or ideally actually read and receive and sign off on your proposals.
[04:38.6]
For an example, negotiation is the optimum solution. But if you do have to competitively bid it, there's going to probably on average be five people that read it and score it. We need to know who all those people are. And there will be massive crossover across your pipeline because there'll be similar consultants or stakeholders on a number of opportunities.
[04:58.8]
And then we can build campaigns to engage and influence them, ideally far before attendance. So rather than the standard model in businesses like these to wait for tenders to slap you in the face and then bid as many as you can that come over the hill when they hit you, and Perhaps you'll win 25% and you'll think that's successful.
[05:20.7]
Actually, we can get far ahead of these opportunities, bid them much more effectively, have much higher win rates and much lower cost of sale net in doing so. And so marketing wise, lots of people get a bit lost with marketing because when we think of marketing, we think of B2C marketing, business to consumer, where people are trying to sell us a phone or a watch or a car, and that's What I've done a podcast in the past with Darren Carter from Morgan Sindel on the difference between that and B2B.
[05:52.8]
B2G marketing, where we are trying to influence complex groups of people who have objectives, they have a governance envelope, it's much more rigid, there's a lot more goes into it in different ways. The energy in marketing to businesses and government departments is very different.
[06:09.6]
And so that needs to be thought through. And how you do that, creating educational events, sitting that prospect between a happy client of yours and perhaps your project director or contract leader, all of that kind of stuff, you can facilitate human contact between your people and theirs.
[06:27.3]
Start building trust far before a tender ever comes out, you'll be wildly more successful. So that leads us nicely to key account management. So as we've talked about in our other videos, what we're finding is I'm on my 18th client in a row where 80% of their margin is coming from 20% of their clients on average.
[06:47.7]
No one has been more than 3 percentage points out. Either way, those stats and those companies are contractors right the way up to the biggest well known brands. They are asset consultancies, but also other professional services firms, outsourcing firms, IT firms, all sorts.
[07:05.7]
They're making all of their money in the first part of the bell curve and then it dissipates a bit. They make a bit more money with some rising stars and falling stars, but then they make a new loss on average if they accounted for their cost of sale effectively in a long tail of pity.
[07:23.7]
Clients, the sprats to catch backlogs that never come. You know, clients who are friends, but it's tiny pieces of work, you know, it's a bit of a fool's errand. And particularly I'm talking to my clients more and more these days about the fight for talent and its impact on our decision making, decision making and how we steer the business.
[07:44.0]
Now, if you're in construction, which a lot of my audience are, 500,000 people are going to retire out of construction in the next 10 years. We're already in a fight for talent. You know, certain clients of mine have got 10 to 20% of their seats empty and they're struggling to fill and recruit those seats.
[08:02.9]
You know, at the moment, actually, perhaps we're entering a bit of a recession, perhaps that will free up a bit, but their demographics don't. That is going to change and become more difficult. And so generationally we can have a bit of a shift. So we do need to do more and more better work in Shaping working with clients that our people enjoy working with because then they'll stay longer, they'll do better work, they'll create more value for clients that they value.
[08:31.6]
And in return we can make higher margins by taking a share of that value. We can put more stronger propositions to them, value share deals, all of that kind of game. So we want to try and cut the tail. You know, we don't want to kick out the baby, we don't want to chuck out the baby with the bath water.
[08:48.3]
There might be some rising stars in there, so we need to assess it carefully and have a smooth transition. But we want to manage out some of the tail where you're expending effort for not as much reward and focus on clients are the future of the business based on.
[09:03.9]
So we want to select your key accounts. It might be a handful I tend to say in year one start with three key clients per 100 million of turnover. If you're a contractor, top three clients if it's 10 million turnover as a consultancy perhaps.
[09:25.0]
And then you can add another couple of clients in year two and add a level of complexity. But start with one side of a three as an account plan in year one for three clients, add another two in year two. Build more complexity, mature and it will make a heroic difference to your business.
[09:41.6]
It will have far bigger impact than spending money or time and effort bidding lots of things. Further down in the funnel you will create a business that's much more of a self fulfilling prophecy. Then the next step in the funnel is capture my favourite home territory.
[09:59.3]
So again, what are the three to five deals in your pipeline that will really shape the future of the business? My top tip is focus more of your capture effort on recompetes with current clients who are the key accounts than you do with new shiny bits of business with new clients.
[10:17.5]
So perhaps 60 to 80% of that capture effort. A campaign to win a single piece of business. So either to get an extension of a current contract to win a recompete for the contract or land and expand with that client, win that next deal with them in a new territory, whatever it is.
[10:35.9]
What's that campaign to win that piece of business. So try and go on a journey with them to co solution more and more valuable solution for them for that next piece of business. Continue to build their trust, show that you've learned from mistakes and you're going to carry on making a difference.
[10:54.6]
All of that good kind of work and so go on that journey with them. Where possible you might spend 20 to 40% of your capture efforts on new business with new clients. But I would say that needs to form part of a properly thought through market entry strategy, not just bidding stuff willy nilly that you fancy because it looks fun.
[11:15.9]
And so let's do some proper market research to understand markets and territories that you might want to enter and then undertake capture on the first three deals, perhaps in that new market sector or territory so that you win one. So over engineer your solution, your efforts and ultimately your bids to win those deals.
[11:36.7]
Not necessarily by underbidding it or going in cheap, but let's get ahead of these deals to then get yourself some case studies that have key building blocks, staging post to move forward with. So that's captcha. And then obviously in the bidding game I can help you understand how to write better bids, come up with better solutions, come up with more valuable solutions and strategies and proposals to clients so that you win on quality and don't have to be as cheap.
[12:04.8]
We can talk about price to win and all that kind of stuff. We can upskill your people in how to perform in the end game and that's all cool. Provide tools, etc. We want all of your people who will touch a bid or a proposal match fit at that moment in time when it lands.
[12:23.9]
And that's cool. But then there's the next step that I'm going to be doing much more work on with the support of my wife's business marketing mixology, actually in client experience. So you've won the piece of business you're into delivery. What happens next? How do you delight that client?
[12:39.4]
How do you keep taking a temperature, temperature check with them, how do you impress them into delivery? And how do in particular how do we plan to win the next piece of business, land and expand, etc.
[12:54.6]
Etc. So we're building a whole new proposition. So watch out for new content on that along with actually new content in training your people in how to use LinkedIn effectively as a coordinated group. And obviously more activity coming in that marketing space, the account based marketing space.
[13:15.5]
So if you string all of that together, if you could do some market research to understand where the money's going to be with who, if you can then use that to inform your marketing and events planning so that you're engaging that addressable audience for that work, which will be much smaller than you will think it will be tens or low, hundreds of people, not thousands.
[13:38.5]
We're not marketing phones to a big audience if that can then funnel through key account plans for those top clients and it is key that does need to be a focused programme of activity for your top clients.
[13:53.9]
I should say you should select those clients based on how much margin they will deliver to the business in three years time. So it's not your biggest revenue clients today, it's your highest margin clients tomorrow. But if you can select that group, focus your efforts, the business will be more successful.
[14:13.3]
Pick those key capture pursuits, those key frameworks that you need to get back on those key projects with those key clients and perhaps some new prospects or market entry stuff. Depth charge with some capture activity to get you into new spaces, but in a measured approach with a watchful eye on budget.
[14:35.4]
And so really focus your efforts and then obviously up your game in the end game of bidding and then look after your clients, you will be heroically more successful. And almost nobody does that in one linear motion. Nobody joins the dots through their funnels marketing activities a bit all over the place.
[14:55.3]
You're exhibiting at conferences, but there's no real tracking of the roi. Nobody really touches key account management. It's very rare that businesses actually do that because it feels like an overhead or a burden, when in reality it's a one side of a three action plan.
[15:12.0]
Who do we need to know? What's the next step? It's a half hour. Teams call once a month, perhaps an hour with a sponsor on it once a quarter. It's not rocket science. Same with Captcha. So it's all about focus. I've been spending a lot of time with clients, the boards of clients.
[15:29.0]
I'm just driving back from a board meeting with an interesting specialist contractor where I've helped them realise that they don't need to bid loads of public sector work. They don't need to work with rubbish clients on rubbish terms. They just need to look after the clients they've got and find prospect with three key prospects.
[15:49.8]
To convert one of those to being a key client and they will smash their numbers to bits. Their business will be worth a multiple more than it would have done and they'll have a nicer life. And the same applies to you guys, whatever business you're in, whether you're an owner or whether you're a member of staff just looking to have a better time.
[16:07.3]
Let's focus those efforts through the funnel. So do reach out if you'd like to talk about any of that. I'm available to give talks about that and the components of that at leadership development conferences or forums you have in your business. You're welcome to grab a teams call with me with leaders in your business to talk them through that and components of it and how it applies to your business and your world and we can get more meaningfully engaged as appropriate.
[16:35.6]
I'm looking for a small number of clients to really pull partner and work more seriously with on this stuff in the next year or two. So I'm open to conversations with companies about partnering with them to drive these programmes through a bit more hands on.
[16:51.6]
But largely speaking, I'm open to more consultative coaching opportunities to work with businesses to help them shape these funnels and ultimately be much more successful. As I say, we've got six case studies where we've doubled the margin of these businesses and they've gone off into the future on a more sustainable, predictable growth trajectory that's continued over time.
[17:15.3]
So this is how successful businesses are run at the front end. It would be great to hear from some of you. Let me have your comments as well. Come back to me. Send me a DM comment on a LinkedIn post, let me know how you feel about this stuff.
[17:30.7]
Does it make sense? Do I need to break some of it down or what's your feedback? It'd be great to hear from you. Thanks very much. I'll see you around.
