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Growth Barrier 2: Focus On Margin Growth

Posted by Doug Davidoff

May 7, 2010 5:32:24 AM

In my first Growth Barriers post, I discussed how your competition is irrelevant and how to tell if you’ve bypassed your competition.  Today, I’m going to address Growth Barrier 2:

Our growth rate is accelerating and our profit per sale is increasing

I often caution selling organizations:  just because the fish are jumping in your boat, doesn’t mean that you’re an expert fisherman.  For most of the last 20 years, demand was growing so fast that businesses could fool themselves into thinking they were smart, even when they were doing dumb things (pointing out another word of advice:  Never confuse brains with a bull market).


While economic and market conditions determine the fate of the vast majority of companies, there are always a few that are able to grow – and grow profitably – in virtually any market condition.  The critical commonality of these companies is maniacal ability to focus, and stay focused, on their core business; rather than being distracted by what seems to be low hanging fruit.


These companies know where they can be indispensable, and they allocate disproportionate resources to growing in those areas.  Because of this focus they are able to move beyond price as three powerful things occur:

 


    • They get more for their products and services,

    • It costs them less to sell their products and services,

    • They grow faster while enhancing their margins.


Now rate yourself on a scale of 1 – 10, where 1 would mean there is tremendous negative pressure on both your revenue and your margins, and 10 would indicate significant strength in this area.  With your rating clear, start brainstorming with your team things you can do to better focus on the areas where you can grow both revenue and margins.

I’d love it if you shared some of your thoughts in the comments.

Topics: B2B Sales Strategy, Demand Generation