One of the hardest things about business growth strategies is that they often require big decisions that involve eliminating products or services. Most organizations are familiar with making difficult calls to end big projects.
Google has sunsetted some of their biggest initiatives, including Google+ and Google Reader. In the digital marketing world, Moz had to shift directions in 2016, ending Moz Content and moving Followerwonk to a new company.
HubSpot ended their keyword tool in early 2018, which lead to big changes to their content strategy tool.
No matter your industry, your size, or your business, you're going to run into these situations where you have to consider ending products, services, and even customer contracts.
Why?
Sometimes, you need to cut down on aspects of your business model that are hurting your revenue growth opportunities. And the best way to shift is following the pumpkin plan.
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What the hell do pumpkins have to do with business growth strategies?
Michael Michalowicz, one of my favorite business leaders, found inspiration in one of the most unlikely places – pumpkin farming.
Most of his business insights focus on sustainability. He discovered this pumpkin plan strategy by looking at pumpkin farmers, a strategy he explores in depth in his book, The Pumpkin Plan: A Simple Strategy to Grow a Remarkable Business in Any Field.
Most farmers grow the standard pumpkin you buy for Halloween, but the small population of farmers who can yield massive pumpkins adjust a little bit of how they grow.
The same goes for entrepreneurs and business owners. Making a few changes to your business operations can yield huge results. Some of the best takeaways from his book including planting the right seeds and applying a tourniquet to certain areas of your business.
A lot of companies might be overextending their resources and focusing on trying to please everyone they come in contact with. They might even try to help customers with something that is outside their expertise.
When you're "planting your seeds," make sure you plant the right ones. In other words, identify exactly what your business is and what value you offer to a specific audience.
Then, do not stray from that. Continually water that seed and focus all your attention and resources on that area.
This is one of the toughest aspects to put into action. You have to first accept the fact that it's not all about how much you offer or how many customers you have.
More customers. More products. More services.
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This should not be your end goal. As Michalowicz writes, "More is not better, people. Better is better. You need to shift your mindset away from the quantity game. You need to stop killing yourself for scraps."
While it's scary to do things like sunset products and fire customers, it's necessary for fueling your growth. The best way to implement the tourniquet technique is assess your current situation first.
Look at all your customers, and find the ones that drain your resources and deliver little to no return. Then, establish a plan to end the relationship respectfully.
Yes, this is tough to do, but it's worse to let bad fit customers slow your ability to grow. The pumpkin plan isn't just a nice to have; it's a must for every business.
The reason you need to follow business growth strategies that encourage you to double down on your niche is simple: the cost of keep tough customers drains you and your team.
You don’t want to be hamstrung by products and customers that underdeliver on revenue. Resources, like time and your employees, are at stake. And if you're burning out your staff, you might struggle to scale your team as your company grows.
For an agency, it’s easier for account managers to work with less customers that are generating more revenue as opposed to juggling more accounts that deliver less revenue. Not only is it hard on that particular employee, but it can also hurt results for the customer.
Many service-based companies will take an approach to offload more demanding, less profitable customers to other trusted organizations that can better serve them. It's how companies make room for their larger pumpkins to grow.
Some business models are like a weed field, existing as a plot of land covered in little weed stalks. These weeds are small customers who do little to fuel sustainable growth. If you look for accelerated growth, at some point you need to trim the vines.
The process of trimming vines is especially difficult when long-term customer relationships are those weeds. But it's important to face the facts – if it's the best thing to do for your company, it needs to be done.
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That being said, there is still a human element to ending a customer relationship. The transition period should be simplified for the customer, which is why when it's time to end customer relationships, you should provide plenty of notice and guide customers to find other companies you can vouch for.
Present a full transition plan over the course of a few months. If you're not referring customers to other qualified companies, offer to train your customer's internal team. Mostly, this mitigates any hard feelings.
Occasionally, you'll get jilted customers if you're a service company transitioning them out. But in service companies like agencies, there's a natural evolution that most customers understand.
In terms of troublesome customers who slow your growth, you might not necessarily have to completely cut ties with them. Sometimes, a simple discussion can help.
You can reset expectations for existing customers, especially if their budgets are smaller than your other customers' budgets. This reframing can give them a better perspective of the value you're delivering that fits within their means.
The most important part of following a pumpkin plan is looking at the big picture while you start trimming the vine. It's important to be strategic about shifting revenue generating opportunities.
You don't want to sacrifice the hockey stick growth you're pursuing for bigger profits in the short term. In other words, don't just swap out current weeds for other opportunities that could become another weed in your pumpkin patch in the future.
Consider how each new opportunity you're pursuing will impact your ability to continually grow revenue over the long term. This requires a lot of patience, which is hard to maintain. But with patience and a structured plan for watering the right seeds, your land will be filled with massive pumpkins you can rely on for a long time.