On today’s show we’re talking about what you do if your business’s growth becomes stagnant or even stops all together.
Our guest is Jose Palomino, host of the Business Growth on Purpose podcast and founder and CEO of Value Prop, a consultancy that gives established B2B companies strategies to jump start growth when it has fallen off.
Jose gave me great insight about how you objectively examine the health of your company and take steps to make changes.
We talked about B2B marketing and what you can do to revitalize relationships with your customers. If your business’s growth is stuck, or you’re just trying to build a business, you’re going to get something out of this interview.
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Noah Graff: Say you’re a pretty diversified precision machining company doing $5 million in sales. Your growth has slowed and you’re feeling stuck. What is the first step to getting back on track?
Jose Palomino: It always starts first with an interview with the owner. I always like to get into their head to know what they think their issues are.
Then what we want to do is go through those issues with the leadership team.
Even further, I want to talk to some of your customers. If you have somebody who you’ve been working with, who’s loyal to you, who you feel you have a great relationship with, I just want to talk to them. I’m not going to interrogate them. I just want to get a sense from them.
Something is stopping you from growing. You went from zero to $4 million, from $4 million to $8 million, then you stopped growing. What happened? What changed? And that’s what we want to dig into.
Graff: It seems like it is important for people to understand their companies better if they want to turn things around.
Palomino: Here’s where it gets hard. There are times when I’ve done this exercise with the leadership team and they conclude that they don’t know what’s special about what they do. And I say, okay, well that’s not good, but the good news is identifying that.
When they tell me the attributes that they think set them apart, then I say, how would we validate that? Because I want to know that if I look at your competitive set, even through just a Web search, would I see the same words, ideas and illustrations you’re telling me set you apart (from other companies)? Because if there are two companies that to the average buyer look to be about the same size and capabilities, then they cancel each other out. By definition we call this “equally credible claims.”
Graff: It can be hard for a contract manufacturer to differentiate itself from competitors.
Palomino: That’s why you need to talk to customers. When talking to owners, this is a one of my standard questions. “When is the last time you personally had a conversation with your top five customers?” And the reality is it’s, “Well, I used to when I started, but I haven’t in a long time.”
I’m talking about years they haven’t (talked to them) unless there was a problem.
Graff: What do you say to customers when you call them?
Palomino: I would start with a very general question like, “How are we doing for you? I really want to hear the good, bad, and ugly.” And you have to really listen for the answer. You can’t just say, “Okay, great. Enough about you, let me tell you about me.”
Then I would say, “Is there anything you’re working on now that you might need some help with? You know, if you’re in the industry, we may know a resource.” And that’s the home run. If you can (provide) a client or a customer to another resource. You did that for them. You will solidify that relationship in a profound way. It’s not a blank check, but it definitely helps because it’s not the words of sincerity, it’s sincere action.
Graff: What is another thing you can discuss when you call a customer?
Palomino: If I think I actually have an idea for them, I might say, “By the way, our team put our heads together. We thought there might be some opportunities for us to help you with something in particular. Can I tell you a little bit about it?”
Make it one simple thing. Something like, “You know, one thing we’ve never done for you but we’re really good at is induction hardening.”
“I know you make some parts where that probably makes sense in your engineering. Is that something we should talk about, because it’s something we do really well. We would love to demonstrate that for you.” They might say, “Well, what do you mean?” And the moment they say “what do you mean” is a wonderful thing.
Because now you have a conversation going around the thing that you want to talk about. And it’s an easy conversation. And here’s the thing—the prefacing of it. My team and I got together to think about how we can help you. And we came up with one good idea we want to share with you.
Question: What strategies does your company use to create growth?