The government defines “high growth” as 20% growth or more per annum.
A recent report by Barclays states that the Midlands leads the UK with 26% of companies with a turnover between £2.5m and £100m considered high growth (UK average up 3% to 20.5%).
A similar US based survey gives 4 key differentiators of high growth companies.
So what are the secrets of high growth companies?
1. Vision and focus: they have a well thought through proposition for their market. I know, it sounds obvious but how many of us actually, really get to grips with the core added value we are offering our clients or market?
The first thing is to have a strategic view of where we want to be – and that starts with ambition, both personal and business. If you know where you want to be, you can plan a route to get there – but how often do we see businesses that simply keep slogging on without a strategy…
2. Focus on what the customer wants: High growth businesses were promoting what their product or service does for their customer, not why their company, products and services are great.
By focusing ruthlessly on what the customer wants, makes it much more likely they will have successful sales and great references.
More importantly, this makes them totally customer focused. Customers are king and the whole organisation is tuned to making the customer’s life easy; nothing is a problem – only an opportunity to improve.
I have always said that you don’t know how good a relationship is until you face a problem. Poor companies fail here, offering excuses, delays and blame. A good company – a high growth company – will embrace the problem, accept responsibility and keep the customer informed throughout the resolution. Guess which one strengthens the relationship and has a long term customer?
3. Flexibility: This is key. If you are focused of outcomes for the customer then you need to be flexible. Maybe you can’t change your widget design, but you can change your delivery cycle, order quantity, training schedule, whatever… Really grasp what the customer needs and be flexible.
4. Reputation: Or “brand” in marketing speak. High growth companies are fanatic about their reputation. This again follows the customer centric culture. Every problem that might detract from their reputation is addressed and in doing so only improves their reputation.
5. Marketing: A surprising observation in the report was that high growth companies spend less than average on marketing – not more! The average spend on marketing is 5.1%, but within high growth companies it was only 4.9% (not much difference, but significant).
Why is this last point we wonder? Unfortunately the report did not investigate this observation further, but we can probably deduce the answer from the first 4 factors. It probably comes down to the fact that if you follow the first 4 golden rules of high growth, you will get a significantly higher proportion of referrals from you customers than others. In other words, free sales leads.
So is this final point the real driver behind their high growth rates?
OK, understand and state your ambitions, formulate a strategy to meet them. A strategy is only a plan to meet ambitions – you might only have one ambition, but their can be several strategies to meet it, some good, some bad – but you must have a strategy!
Understand how your product/service meets customer needs, i.e. where you add value, and put the customer at the centre of that strategy whilst making sure your reputation is second to none.
Now your reputation and referrals will boost your normal growth into high growth. Job done.