Why are high-growth companies potentially such high value customers, partners or employers?
Published 19th of November 2018
Fact - less that 1% of companies are in a high-growth phase
High-growth companies are, by definition, expanding, which means that unlike the 99% of firms that gravitate around a plateau, business-wise, they need and want more of everything.
They require more services, more goods and more people, and not only are they purchasing in greater volume but also in greater diversity to support the sales growth of 20%+ per year they need to qualify for this prestigious badge!
The other 99% of businesses have a set of regular suppliers and, while these will change slowly over time, most of their purchasing is on a wear-and-tear replacement basis. Hence the low success rates most suppliers face in trying to win business from them. We have all experienced this.
Not the case for the high growth set! In short, because of the pace of expansion, these companies are looking for and need to buy more and different types of services and goods, and to recruit more and different types of people, and in different ways.
You should be on their radar screen, whatever relevant products or services you have to offer.
When the new Mini car was launched in the UK in 2001, the business went from zero to over £2 billion in little over a year. In doing so this made a raft of new suppliers who had got in at the start, very, very happy.
Their fear of slowdown or failure makes high-growth companies receptive to approaches
High-growth companies have energy and confidence but also harbour a fear that they may not be able to sustain their rate of expansion. This means that they are usually open to finding new solutions to the pains of growth, of which there are many.
They will be more receptive to your approach, your pitch or sales message because they need to be. If you are able to offer them a route to maintaining or increasing their rate of growth, or exploiting their unique offering better - whether that is as a supplier, partner or employee - they will be willing to listen.
Incumbent suppliers might not be keeping up - what an opportunity!
Incumbent suppliers with all their challenges and distractions may not be keeping pace with or even be fully aware of the growth company's changing needs; and may not be sufficiently flexible to adapt to the rapid increases in scale and complexity which are the result of expansion. What an opportunity! I have seen this happen countless times.
And as high-growth companies do what they're good at - grow rapidly - if you can get on board and deliver on your promises, your order book will grow quickly too! As and when the growth eventually slows to a more steady position (it will inevitably!), your business relationship could be worth many times more than its initial value.
When McDonald's opened for business in the UK in 1974, you can imagine the food packaging company they appointed was pleased to see sales rocketing on the back of a firm largely unknown in the UK at the time, but which had intentions of becoming a big fast food player. With 1200 restaurants across the UK by 2017, McDonald's remains a prized account for any supplier, even if today they are not in the same rarefied high-growth zone.
Avoid the scatter gun approach - concentrate your resources
While I am not suggesting you should abandon other sales and marketing strategies, beware of the scatter-gun approach where resources are spread thinly over a huge group of prospects. Among your priorities, a focus on high-growth firms will pay dividends. It will allow you to sell in-depth, be in touch with more people and know more about a company's activities and plans - increasing the chance that you will make the all important breakthrough and be swept forward by it.
Price is not usually the key issue
For high-growth firms, the price of products and services is not usually the driving concern that is so often the case in other business deals and negotiations. Of greater importance is product and service quality and how to do things better, faster and more efficiently to build and enhance reputation and beat the competition, or better still to or prevent them ever appearing. If you have a product, service, experience or strategic thinking that can help them to get ahead and stay there, you will get a positive hearing.
High Growth 10,000 from Alert BI
Alert Business Insight has developed extensive expertise in identifying and profiling high-growth companies, which it offers in a series of unique data sets known as High Growth 10,000. These not only pinpoint the top 10,000 fastest-growing UK companies plus, importantly, those on the cusp of this phase, which it updates every three months, they also provide all the background detail needed to make informed approaches to these companies. Information on these 10,000 companies can be provided in one UK-wide data set or by region, city or post code.
Learn more about these powerful data sets by visiting alertbi.com/services/high-growth-10000. We are offering a 50% discount during July and August on all data sets in our online shop to promote this new online portal.
Use discount code SUMMER50 in the Alert BI online shop to receive a 50% discount from the cost of any of the UK-wide, city, postcode or regional data sets. This data supplies everything you need to initiate positive, meaningful business conversations - and win new sales or uncover other incredible opportunities!
Valid until 31 August 2017
Don't delay - get your sales pipeline buzzing!
Next in the series of blogs about high-growth companies:
1. The sectors and regions with the most high-growth companies.
2. Five key cultural differences between high-growth and low-growth companies.
3. The gender balance in high-growth companies. Balanced or skewed and in what way?
4. How long does a high-growth company phase last? Optimise your timing and approach.
5. The education levels of founders and chief executives of high-growth companies.
6. The fate of high-growth companies - short, medium and long-term.
7. The corporate trees of high-growth companies. Opportunities abound!
8. Working for a high-growth company - the short and long-term pros and cons.
9. How can your business achieve high-growth company status? The five key steps you can take.
10. How to recognise the four key stages of high-growth businesses and exploit them.
11. How to effectively market and sell to high-growth firms - the six must-do actions for success.
12. Departmental drill downs for high-growth firms - the who, why, where, when and how.
13. Which high-growth firms are about to seriously disrupt traditional industries?
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