Why do some companies grow 20, 50 or even 500% Year-over-Year while others struggle? This is one of questions I'm excited to answer as we look at data from 100's of US-based EO companies that have participated in the Growth Research project with myEO. The first look will be at Lead Generation. Here are few key insights come to light that you can apply to your business today.
High Growth vs. Low to No Growth Companies
High Growth companies are those who grow over 20% YOY compared to all other companies growing under 20% are low to no growth. First off, let's look at these two segments as represented in the charts below. The chart measures 3 different things.
Lead Generation Effectiveness: On the X-Axis (bottom) is a rank from 1-to-5 on how effective different lead generation methods are. The farther right, the more effective, so the numbers represent the following:
Not Effective - 1
Slightly Effective - 2
Moderately Effective - 3
Very Effective - 4
Extremely Effective - 5
Lead Generation Method Frequency: On the Y-Axis (Left) is the % of respondents that use a lead generation method.
Top Revenue-Generating Lead Generation: The size of circle is based on how many respondents said the lead generation was the top revenue generating method. These are also segmented and color coded based on Top, Middle, Low or None in terms of how many respondents selected their top method.
A couple observations, first, and not surprising, low growth companies lead generation methods are all below 4 with the most effective method Channel/Referral Partners ranked at 3.7 out of 5 and only 2 ranked higher than 3.5. High growth companies have 3 methods ranked over 4 and 7 over 3.5 . In total, Low Growth companies averaged a 2.78 compared to a 3.28 for High Growth.
What do High Growth B2B Companies do differently?
1. High Growth Companies Focus on Lead Generation Methods that Scale.
60% of High Growth Respondents selected their top lead generation method as something that is scalable and repeatable (Channel Partners, Customer Referral Programs or Cold Calling). On average these top methods were responsible for 40% of all new leads the company generated.
On the flip side, many low growth companies use a couple of these methods, but many also selected low scale lead generation strategies as their top method like Networking, Associations & Local Groups (14.63%) and Events, Trade Shows/Conferences (10.98%). For those who rely on these lower scale methods they say they provide 49% of all new leads.
When asked what one lead generation method are you most interested in learning more about, high growth companies were interested leveraging Influencers (16.67%) and Channel Partners (12.5%) while low growth companies selected Channel/Referral Partners (13.41%) and organic Social Media (10.98%) which most did not consider very effective.
2. High Growth Companies invest where they can win.
Over 1/3 of low growth company's lead generation methods were Slightly to Not Effective compared to only 15% of all the lead generation methods ranked by high growth companies.
3. High Growth Companies are more specialized in Sales & Marketing and spend more on it.
Over 34% of high growth entrepreneurs are involved in either sales or marketing with a leader handling the other, compared with only 9% of low growth entrepreneurs. Low growth entrepreneurs are more likely to run it all or to not have a leadership role in sales and marketing.
Sales & Marketing Budget: High growth companies spend 18% of their revenue on Sales and Marketing compared with 12% of low growth companies.
Sales & Marketing Employees: High growth companies said 46% of their employees worked in sales and marketing compared to 19% of low growth companies.
4. High Growth Companies win because of their clear Competitive Advantage.
91.3% of all High Growth Companies have a Competitive Advantage, compared to 71.8% of low growth companies.
72.73% of High Growth companies said their competitive advantage was Innovation and/or Differentiation compared to 69.57% of Low Growth, who said their competitive advantage was Customer Focus.
Is Customer Focus compelling or are low growth companies relying a weak competitive advantage?
Clearly, the High Growth competitive advantage seems to be more compelling and is measurably allowing them to get more leads and close more deals.
As mentioned before, our next theme will focus on MONEY. So look for a new survey coming your way but until then more great content on GROWTH is coming your way.
I am excited for us to learn from each other as mentioned, our chapter seeks to increase member-to-member value through curating and creating valuable content that you care about. GROWTH is the first theme that will be unpacked for the next several months but over the year we will focus on 4 themes GROWTH, SCALING your operations, creating a winning STRATEGY and MONEY.
Feel free to reach out to me if you have questions!