This is the third in a series of Posts on scaling a hypergrowth enterprise. I was the co-founder and CEO of CyberRep, a CRM and call center company which grew revenues nearly 160x (16,000%) to over $80 million over a 9 year period. In Part 1 of this series, I talked about People as the first of 5 key elements for scaling a hypergrowth company, the other four being Culture, Scalable Customers, Process, and Capital. I examined Culture in Part 2 of this series, and today we will discuss the 3rd element, Scalable Customers.
All customers are NOT equal. Some are much better fits for your company than others, in terms of how they treat you, their level of dependency on your services, and the degree of difficulty in servicing them. You want to serve customers who are growing fast and who will have more and more needs as they themselves grow. A “scalable customer” is one which grows and takes you along for the ride.
Partner Mentality – The best kinds of customers take a partnership approach to your relationship (as opposed to a vendor-vendee mentality). They rely on you for true “value add” solutions that go beyond just providing the bare minimum of what they need. They rely on you and have a high degree of dependency. These kinds of customers will continue expanding their scope of business with you, as they grow. Note: An added benefit of a customer with a partner mentality is that when things get rocky (and they inevitably will from time to time), they will be more apt to work through the issues with you, since you are a valued “partner” and not just another vendor.
Customers who grow fast – Try and find customers who are in hypergrowth mode themselves. Whether they are in hot market segments or expanding via acquisition, these customers need you the most because they have challenges supporting their growth. For example, my company supported Nextel and Microsoft (MSN) in the early 2000s when both companies’ user bases were exploding. The more customers they added, the more customer service they needed, and the better we performed, the more business they gave us. They expanded astronomically with us.
Know when to say “No” to revenue – It hurts to turn away revenue, BUT it’s required if you want to build a hypergrowth company. Saying “no” is really tough. It is tempting to want to do any kind of work and take on more than you can handle, or to take on a client that is not “scalable,” but you have to stay disciplined in your business acceptance. By pursuing the revenue YOU want, and focusing only on clients who will grow with your company, you can marshal your scarce delivery and other resources on becoming an expert at your craft and improving your service offerings with these scalable customers.
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