How To Expand a Tech Firm’s Customer Reach
Once technology firms have reached a level of maturity where revenue is consistent and practice (and delivery) is dialed-in, talks of expansion are almost inevitable. Expansion of tech firms comes in a few different flavors of conquest: geography expansion (into new country segments), moving up-market into complex deals/bids and expanding various practice areas.
We’ll cover expanding practice areas in another post, but expanding market and customer reach is often seen as the logical next step of a successful firm compared to moving up the market.
Whether that’s expanding revenue growth across market segments in the same country or outside, it is a trying hurdle for operations, marketing, and the entrepreneur’s sanity.
Here’s how to handle all three.
Keeping Your Sanity
Change in a firm is difficult, but when all of the partners are aligned on a firm-wide move, that resistance to change can swing the other direction into unbridled momentum. While deciding to grow a firm’s new revenue streams can feel incredible, eventually the honeymoon phase of decision making is over, and the reality of execution begins. To ensure partners can focus on their work and not lose sleep over the expansion, it’s critical to have realistic and achievable goals in mind.
When a lofty plan hits operations, the holes in your goals become painfully evident. When a “perfect” yet incomplete plan reaches execution, deadlines are missed, goals are overlooked, and the momentum of a pivotal firm move dies.
This is when the entrepreneur (and founders), understandably, lose their minds. With some preparation and a clear understanding of start-to-finish implementation of your expansion, the whole firm can be focused, ready, and sane when the expansion begins.
Having realistic goals and achievable execution dates for a market expansion or launch are the two most important goals for a comfortable execution. If the entrepreneur set too lofty of goals, or if people executing on the expansion deliver subpar results, expectations are not met and the expansion causes more pain than profit. Setting realistic goals for growth starts with understanding what is achievable and what growth really looks like.
Calming the storm of Operations
High growth tech firms aren’t known for their pristine operations. If they were, flat rates would be significantly more popular than billable hours. That being said, a firm that is looking to expanding markets should have its operational teams built out and a good grasp of the firm’s economics. After all, tech firms that are looking to expand have likely looked at the opportunity costs of expansion, and have decided that the numbers make sense.
Expanding a firm jostles the carefully built operations and systems of a tech firm. As obvious as that sounds, firms are often surprised when phone systems aren’t working properly, websites are broken, and vital structural employees are redundant, or worse, absent altogether. Walking through the minutiae of an expansion is worth the extra time. Waiting for the execution of the market expansion before talking about the details will almost certainly result in unexpected costs.
Marketing: Building a launchpad out of words and numbers
The number one thing we’ve seen firms fail to do when they expand is to devise a comprehensive expansion marketing plan.
Firms that get comfortable in their success and assume that an expansion will naturally extend from previous achievements, learn a harsh lesson. Expanding markets is more akin to starting a new business. Referrals can help kickstart an expansion, but even referrals need optimizing if you’re going to turn a profit on the new expansion. With the cost of an expansion, your firm is now in the hole and expecting a return. It only makes sense to bring the materials to build the ladder.
Marketing into new customer segments is similar to marketing an entire firm, but instead of trying to expand the reach and image of the entire firm, expansion strategies can focus on driving the subject of the expansion into highly targeted areas of the market. If a firm is expanding into specific geographies or customer segment, marketing will help the firm identify who the ideal clients are, what exactly they want to see from your tech firm, and where to reach them.
Once those three factors are dialed in, the tech firm now has a clear launchpad for a market expansion and clarity on how they are going to surmount the operational costs of capitalizing on a pivotal growth opportunity.