“There’s always another stick”
In my last post I mentioned I recently got a dog. I say got, not bought, because it doesn’t feel like a purchase. More a choice and commitment because if you’re like me, once I saw him, I knew I had to take care of him forever. Hugo, the 16 week old Labradoodle, who’s growing faster than your next SaaS IPO tip-off’s revenue figures, has given me many things; x1 destroyed pair of slippers, x1 stolen t-shirt from the washing rack, countless scrapes and nips learning ‘paw’, the four legged friend I’ve always wanted, and something I didn’t expect. Time.
Time walking outdoors more specifically. The grim winter we had up North, combined with the strange reality we find ourselves in mid-pandemic, has meant that forced time walking outdoors has been invaluable. Anyone who’s got a dog will know, rain or shine, you have to go. Or that x1 destroyed pair of slippers will turn into x1 destroyed couch.
I live on the Fylde Coast, and St Annes beach is about 5 mins from my door, so venturing out to the beach everyday has given me time to think. I’ve recently been hiring several key sales hires for a startup we work with and so over the past few weeks, sales and recruitment have been front of mind. On one of our walks looking out to the Irish Sea, I got thinking about how Recruitment and Sales intersect so heavily. Full disclosure, I’m an ex-Agency recruiter and proud, but I’m not here to convince you we have souls too. Maybe another time…
My mind turned to new business vs account management. The balance between customer retention and new customer acquisition is a tricky one to strike in a sales model. On the one hand, new sales are the lifeblood of business growth. But the sheer amount of effort that goes into securing a new client is huge. So when that customer comes back or needs support, it has to be very high up the priority list. Why go through all that trouble of winning the business in the first place if you’re going to lose it a few months later due to crap delivery and account management?
But too heavy on the account management focus and you can become so leveraged that all your eggs are in one basket. What if that client goes bust? Finds a better provider? The POC changes and they no longer want to work with you? They merge with another company and all agreements are null and void under new management? There’s so many things that could happen that lose you a client that are out of your control, and I’ve seen first hand startups (and recruiters) go bust because all their focus and energy went into keeping one or two clients happy, and they lost sight of building pipeline for the future.
Then I got thinking about VC, and how raising money has been so glamorised for startups, that many are dependent on it to scale. Look at WeWork and Uber as high-profile examples of astronomical raises and valuations, with business models that have been shown to be shaky at best, and potentially a scam at worst. Many startups need capital to grow, I’m not disputing that. But if the unit economics don’t make sense, and the revenue base isn’t there and growing, then there’s a big component of their business model that needs looking at.
I’ve always tried to hold a balanced view of things, and I value both sides of the sales cycle. The skill-set needed for each is unique, they’re different beasts. Speaking of beasts, my chain of thought was interrupted by an over-excited Hugo waiting for me to throw the stick. “Why this stick Hugo?” I said to him (yes I talk to my dog, I’m not crazy). “There’s always another stick down the beach….”
Hmmm, very true. If there’s one thing new business gives you metaphorically, it’s another stick down the beach. New business growth, winning new logos and expanding into new markets gives you choice and opportunity. If your new business engine is always humming, then you have options, and can take the churn or customer drop-off that will inevitably happen in your stride, because new revenue is always coming in. Unfortunately no client is the Bert to your Ernie, you won’t be together forever. Do everything you can that’s reasonable to keep them as clients. But never lose sight of new revenue.
I’ve always loved the chase of new business, and the excitement that comes from landing it. So if I had to pick, I’d say new business every time. I guess Hugo gave me something else. Perspective.
Speaking of the chase, it’s time to throw the stick again…
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