Why retail tech companies stop growing
While the social media tells us that everything is awesome and that the future of everything is shiny, spare a thought for the growing number of tech companies that seem to have run out of growth. The reality is stark for start-ups because they launched on a wave of disruption, innovation and future-shaping, only to realise after a couple of years that all they have to show for it is a pair of awards, one flagship customer that is not profitable, and a growing pile of conversations with retailers that have not turned into any business.
This reality is less stark for established companies that can often travel for years on recurring revenue, while developing new products in the hope of generating new business, but the problems are often the same.
Tech companies often approach us and say, ‘I can’t understand why we are not growing; we are doing everything right’ – professional sales team, product development, PR, events, active social media, SEO-optimised web site and so on. They feel they have reached a plateau, and are having to work harder than ever to get off it.
Here are five reasons why growth stalls. There are of course more than five, but these are the ones that can be relatively easily solved.
The sales and marketing engine has to run faster
Plenty of companies are quite good at sales and marketing, but you can often tell which text books they copied their processes out of. There is no dynamism, no creativity, no proper market targeting, and often a weak link between what sales is doing and what marketing is doing. It’s not a question of doing more sales and marketing, but doing what you are already doing better.
Tech companies always have competition
When you were smaller, the competition didn’t care about you, but if you start winning business off them, they tend to get nasty. You then have to start doing things differently; for instance, talking to a range of influencers who are currently telling your customers and prospects that your competitors are better than you; revisiting your messaging and product definitions to ensure that you are clearly differentiated; and, qualifying your pipeline better so you do not waste your time trying to oust a well-entrenched incumbent.
The market changed
We all know this and we all laugh about it, but few of us do anything about it. If for instance, you are still trading on your innovation but you are selling to people who just want to get something fixed, then you may simply be pitching over their heads. Instead of believing your own hype, find out what is really happening in your market right now. You may already be headed for extinction (or a fire sale).
You’re only interested in selling
Call me old-fashioned, but in my day, if you wanted to sell your business, you didn’t tell everyone, because you risked losing customers if they thought you weren’t committed for the long run. Why do so many founders say on day one that they want a quick exit as if that is somehow a benefit to anyone but themselves? Dude, you’re in the service industry, and most companies want to know if they can trust you, that you are committed to their industry and that you will be around for a while. Procurement will look for that, and if they don’t find it, you’re already off the list
The senior management team isn’t talking (this is the hardest one to fix)
It’s amazing to me how, where two or more are gathered together, it is still possible to take bad actions or no actions at all. Outcomes should be set at the beginning of the meeting and clear actions set on each attendee. What started life as a bunch of people with a single goal, quickly turns into a set of individuals working almost in isolation. Companies that have stalled need benign dictatorship or a willingness to act on the advice of a decent advisor. Forget empowering the team; that comes later, once the growth plan has been agreed.
If you need help building your company’s reputation, and finding a voice in retail, get in touch today.