The Importance of Delivery to Keep a Small Business Financially Stable

Customer Delivery and RevenueToo many times we see businesses focus so hard on winning new business, they forget everything that follows the initial customer win… The stark reality is that only focusing on the initial customer win will ultimately lead to a large majority of businesses’ failures.

Let us share with you a brief example. A few years back, 3SixtySMB worked with a firm that was in the consulting services industry… This firm had seen six years of exponential growth, until they hit snag and had four years of declining bookings numbers. Their CEO thought they had strong brand in the industry and couldn’t for the life of him understand why their bookings numbers were declining. Afterall, they always had a large number of projects in the pipeline to be completed and even had a waiting list for new projects. As part of our work, we reviewed the business in its entirety and found multiple areas of improvement for the firm. But there was one area that was sticking out like a sore thumb: their services delivery. To start, they had hundreds of thousands of dollars in backlogged projects that were either undelivered or taking longer than they initially planned. The CEO saw this as a full project pipeline with a waiting line to begin new projects…“a problem any business would be lucky to have,” he quoted. In reality, it was the exact opposite.

Where the CEO had seen a healthy pipeline of activity, in actuality, it was a list of customers with growing frustration to how long their projects were taking to complete, and customers that sales could not sell to. As we spoke with various customers, their frustrations began shortly after the sale was finalized, as they were sent to a virtual purgatory waiting for their projects to commence. Many of the customers described it as feeling, abandoned… Their frustrations didn’t stop there. Once their projects officially kicked off, they were quickly met with delayed deadlines and longer than projected project schedules. Although the end result of the work was typically more than satisfactory, most customers said they that they looked for another firm for future projects. These challenges within the delivery cycle directly affected revenue; waiting customers were unable to sign off on new work, and once the work was actually completed, they were so unhappy with the process, they made the decision not to spend with the firm again. There was also another side effect. Word of how slow and sluggish this firm was began to spread throughout the industry. As a result, they were losing net new business without even knowing it. At the end of the day, this CEO was so focused on the sales team and the decreasing bookings numbers, he completely overlooked delivery. He was putting continuous pressure on his sales team to deliver new bookings that he was literally burning them—and the customer base—out, while the main issue for declining bookings was actually the result of a poorly designed delivery process leading to unhappy customers.

3SixtySMB follows the motto “the customer is everything,” and in order to get this firm back on track, we implemented a few changes to their process, communications, and tracking with that motto in mind:

Project coordination – It was a tough pill to swallow for this firm’s CEO when it was recommended they hire a project coordinator which would be a cost to the business… It was this person’s function to maintain project coordination from the initial start of the project, all the way to end of it. At the end of their day, their job was to stay on top of clients and internal staff to ensure that each and every timeline item outlined within the project was delivered and on time.

Before the win – Before a customer agreement was even signed, we created a process to ensure that a mutually agreeable project timetable was in place… This was a joint effort between the sales and delivery teams to ensure that the sales team is promising a feasible timeline to the customer. This was then relayed to the customer to ensure that proper expectations were in place from a timing and delivery standpoint before an agreement was signed.

Project kickoff calls – Each new deal that was won had a kickoff call immediately set up by the sales team… The purpose was simple: explain to the customer exactly what they just bought and establish clear and definitive next steps for the project based on the pre-approved timeline agreed upon in the sales process. This allowed for each and every project to start off with momentum and a clear timeline of deliverables, while effectively passing the customer to the delivery team without them feeling abandoned.

Project milestone documentation – After each kickoff call, the client was supplied with a document that detailed each and every step within the process… The primary goal was to ensure they had full visibility of the project. This also allowed the firm to use the document as a measuring stick to ensure deliverables stayed on track. As certain items were pushed out, this document was updated and then shared back with the client for full visibility of how changes affected the timeline.

Project tracking – We have a saying of “what gets measured, gets done,” and that is what was implemented within this firm. Utilizing some customization within Saleforce.com, we were able to build out a full reporting structure around the various stages of each project contracted. This reporting structure not only allowed for the project coordinator to easily maintain focus on each project daily, but it allowed for the team to group together weekly to review project statuses during their team meeting.

Weekly project status meetings – We all hate meetings, but again, what gets measured, gets done… These meetings were typically held between sales, delivery team, and management, with a goal of understanding the various project statuses. This allowed for the entire team to understand where each project was with regards to status and to find ways to move along stalled projects as a team.

Communication – We emphasized communication—both internal and external. Internally, sales was copied on all messages that went out to the client. This ensured that they maintained up to date on project progress. Externally, we pushed to over communicate with clients as well. The goal was to ensure that they didn’t feel abandoned, while allowing them to feel as if they had control over the overall project timeline.

Once the firm became adjusted to the process, project completion times were cut significantly without sacrificing overall quality… These changes, along with a few others, allowed the firm to double sales within the first year of implementation, while seeing further growth as time progressed.

When it comes to building a winning business, the initial customer win is less than half the battle. Regardless of your industry, it is as important to have a strong customer delivery platform as it is to have a strong marketing and sales strategy. Step back and think about some of your latest purchasing experiences. Did you have a good or bad experience with them? Now think about how that experience will influence your willingness to go back to those same businesses. Well, the general public thinks exactly the same as you do, and good experiences lead to repeat business while bad experiences lead to never returning to that business again.

Let’s dive in a little deeper:

Repeat business – Quite simply, the number one reason to ensure proper product and service delivery is to ensure happy customers… And happy customers can and will return! And, let’s not forget that new customers are hard and expensive to win in the first place. Happy customers are easier, faster, and much less expensive to bring back, time and time again, making any business more profitable over time.

Happy customers are also exponentially more likely to not only continue to purchase but expand their purchases as well… In the B2B space, I’ve seen $100,000+ annual relationships start with a small $10,000 purchase.

Speed of delivery – After analyzing thousands of small businesses, a core theme that is a killer for most is their ability to deliver their products and services in a timely manner. Not only does it frustrate customers having to wait, but a waiting customer cannot buy more… So, not only is making your customer wait turning them into an unhappy customer, but you’re hurting your chances for that customer to buy from you again.

Customer referrals – Another side effect of a happy customer is they tend to tell their friends and co-workers of their experiences… Customer referrals are the lifeblood of a small business. They tend to be a much lower cost of customer acquisition and close much faster than a net new win. And the process tends to be cyclical as they tell their friends, and so on. There are many good small businesses that solely function on referral business. However, again, on the flip side, customers can and will tell their friends about negative experiences as well.

Online reviews – No longer do customer experiences stay within an inner circle of friends and family; there are literally hundreds of websites and online forums that customers share their experiences on… Regardless of whether you love or hate these sites, the reality is customers are on them daily sharing their own experiences (good and bad)… Too many negative reviews can literally kill a business.

When growing a business, it can be all too easy for a firm to focus on new customer wins as customer bookings are the lifeblood of a business… But, if you are not a customer centric business with a focus on product delivery, you’re setting yourself up for failure. And in the long run, you’ll just end up drying up the well. Becoming a customer centric business doesn’t require a whole heck of a lot of money; a majority of the businesses we find that are struggling with delivery simply lacked a defined and measurable process around delivery. With a little bit of process and measurements in place, what gets measured, will be done!

 

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