I spend a lot of time with CEOs, boards, and top executives. Inevitably, profitable growth is a key issue, universal to almost all.
Many may be growing, some very well, but they always look for more. Others are struggling. They are growing, but barely. They struggle to maintain consistent growth, or see competitors growing faster than they are.
And others aren’t growing at all, their markets are being disrupted, they struggle to innovate and compete.
Often, in looking at growth, our conversations focus on overall business strategies, assessing current and new markets for growth. Looking at product development, new services, possible acquisitions, and other things that drive growth. We look at sales and marketing to make sure they are performing as best possible.
None of this is easy, but this issues underlies virtually every every conversation.
Often, sitting in these boardrooms and conference rooms, I think to myself, “I wonder if they know the dirty secret of all the opportunity they are not addressing?”
I screwed up the courage to ask a CEO this, recently. He, the CFO, the EVP of Sales and I were talking about growth. The company was growing very well. They were a leader in their industry, their sales people were doing great. They were a top performer, hitting their numbers, their boards and investors were happy (as indicated by the escalation in stock prices.)
But, they wanted more!
So I asked, “Do you realize how much current opportunity you are missing and what would happen if you could capture just a part of that?”
The CEO looked at me, then looked at his EVP of Sales (who was staring at me, wondering what I was going to say), then asked, “What do you mean?”
I replied, “Don’t get me wrong, your sales team is one of the best around, but there’s a huge opportunity they are missing….”
Everyone sat up wondering what I was going to say.
I went on, “Do you realize that 53% of buying initiatives end in No Decision Made?”
“As a result, your performance, as good as it is, is only focused on that 47% where the customers make a buying decision. That’s actually the smaller part of customers who have determined they have a need to buy!”
“What would happen, if rather than just focusing on the 47% that do buy, you started chipping away at the 53% that want to buy but fail to reach a decision? Imagine how that might drive growth.”
The CEO was stunned. More than half the people who wanted to buy weren’t–and all for reasons that had nothing to do with vendor selection. He realized he’d only been thinking about the 47% that do buy, and how to maximize share and win rate from those.
He said, “You mean more than 50% of the potential business that is available never reaches a buying decision? That’s enormous! Theoretically, if every vendor in the world could help eliminate that, we would double business at a macro level—and we could get our fair share of it……. I never realized how much opportunity was out there, that we are simply missing!”
He turned to the EVP of Sales…….
Fortunately, the EVP of Sales and I had “rehearsed” this. We had a plan, we just needed the CEO to understand and approve the funding. We were going to start driving changes in the organization, helping the sales people develop skills, helping customers make sense of their buying process and more effectively navigate that.
This data has been out for years. Whether it’s the 53% from Gartner, or what we see from other research firms, the number of buying efforts that end in no decision made outweighs the number of buying efforts that end in a decision.
Too often, sales executives are ignorant of this, or fail to realize the opportunity. We spend all our time focusing on improving our win rate of those who buy, ignoring the huge potential of those who want to buy but don’t.
Perhaps the easiest way to drive growth is not winning more from those that are buying, but helping more customers reach buying decisions. The probability of their selecting us, if we help them reach that decision is high.
Just imagine what happens when more CEOs start understanding this. If you are a sales leader, are you prepared to tell your CEO what you plan to do about this?
As we concluded the meeting, the EVP of Sales and I were happy. We could move forward trying to attack the 53%.
But, I thought, we didn’t even get to talk about those customers that NEED to change, consequently NEED to buy, but haven’t realized it yet……
I decided baby steps were best. Someday, we’ll sit with that CEO and help him learn the biggest part of the untapped market and growth opportunity.