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Managing in a Downturn – Part III – New Revenue Sources

February 24, 2009 3 comments

If you followed this series of posts (Part I and Part II), you’ve read my opinions on creating better client attachment through a consistent client sales plan and creating a more cost efficient organization.  In this post, I want to address how to create new revenue sources from your existing intellectual capital and product mix.

Every day that I am selling to our clients, I see them do the same thing:  they take their scarce investment dollars and place them in the projects that create the most immediate impact on their revenue stream or cost reduction strategy.  Not the largest impact, not the most systemic impact, but the fastest, most immediate impact.  The philosophy seems to be “I need it now because I may not be here next month”.  As confirmation, recent discussions with Microsoft sales team members told of large projects getting iced, medium sized placed “under consideration” and smaller are getting done, but it takes more effort.  While fishing with some friends earlier late last week, a senior sales rep specializing on monster ERP deals said that he’s back to cold calling and talking to customers “that I wouldn’t have picked up the phone for” this time last year.

What do you need to do to meet this kind of customer demand?  Take a look at your core business and client base for new ways to deliver your services or new complementary products that add value quickly to the customer.  Some guidelines:

  1. No New “Bet The Farm” Products Offerings:  This isn’t the time to bet the farm on something completely new that has no complementary value to your core business.  So, if you are a network security shop, don’t start selling CRM.  If you are a CRM shop, don’t suddenly start doing web site and content creation. I know the temptation will be to jump to a new market (“Hey, everyone’s doing MOSS well, we should do that”) but the folks that will survive that new market are the ones already there and already doing the work.
  2. Make Your Services Bite Sized: If you can’t sell a complete network re-architecture engagement because the client is nervous about committing the funds, how about just focusing on moving them to Exchange 2007 to take advantage of its more robust mobile access functionality and higher performance from its native 64bit design?
  3. Package Your Services:  Rather than creating a scenario where you have to discuss their needs, develop a custom quote, negotiate rate, etc instead use your experience in your customer base and the knowledge you glean from talking (often) with your customers and come up with packaged sets of services that are modestly priced, pre-quoted, and with ready to sign contracts for when they say yes.  At my current company, we defined an entry level BI solution (that includes significant internally developed IP coming from our years of experience in CRM and ERP) that we sell as a fixed price project to customers needing better information on their selling and financial activities.  Its priced for less than $10K, is delivered in 3 – 5 days, and has a clear, immediate value prop.
  4. Expand into Complementary Services: This is the time to find better and different ways to serve your customers AND leverage existing organizational knowledge.  But, you have to do this incrementally, not by attacking a whole new product segment.  So, if you are a .Net dev shop, take a look at MOSS as a workflow automation platform so you can provide such functionality in your existing apps.  If you are a CRM or ERP shop, find ways (like BI)  to unlock years of accumulated data so your clients can better understand their businesses.  If you are a network integration shop, add better remote access systems and lower cost security appliances so hard working and time constrained remote staff can more easily get at corporate data. 

You will know much better than I what will work best for your consultancy and your customers.  Just make certain that its an incremental move with high-value to your customers and takes maximum advantage of your own intellectual capital.

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