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February 3

The CEO Trap

Sitting in the CEO seat of a sales and marketing firm for the last 15 years gives me a unique vantage point. I’ve had the opportunity to look into the eyes of hundreds of CEOs looking to grow their companies. Most see unrealized opportunity that would fundamentally change their growth trajectory if they could only capitalize on it.

I started this business to support owners and CEOs in realizing their vision for growth. That’s my “why” in the spirit of Simon Sinek.

It’s painfully difficult to start or lead a company and scale it. There are countless long days, often years of low pay and constant pressure over all of those mouths to feed. I learned this first hand from my father. That’s why I’ve made it my life’s work to build a team capable of partnering with CEOs to identify and execute scalable growth. The idea was always this: If my team and I could lessen this stress and support these brave leaders in realizing their path to scaling their companies, imagine how many more budding entrepreneurs would be inspired to follow their lead. Our country was founded by entrepreneurs. Investing in their success brings me joy.

It’s for these reasons that I felt compelled to write this article. I’ve seen far too many of the owners and CEOs I’ve met through the years fall into the same trap with devastating effects, and it’s been exacerbated by the pandemic. It’s gut-wrenching to see an owner on the brink of losing his or her business and the resulting ripple effect through all of those impacted.

So what is the common thread of these business failures? Waiting past the point of return to de-risk revenue.

They either have most of their top clients in a single vertical or worse yet, most of their revenue from a single client. Or, they have not identified other paths to achieving their growth goals if their current strategy for scaling sees a performance decline.

If you only have a single path to growth, you are doomed to fail. And too often, by the time these owners get to my team, they are past the point of return — where every dollar in marketing investment must pay off immediately with no room for error. Marketing is an art and a science, and it takes time to fully optimize a new strategy. If you are in a financial position where every dollar spent must produce an ROI in the next 90 days, you’re likely past the point of return sans an outside investment of capital.

I’m going to share with you the stories of three such owners that I’ve encountered through the years. Key facts have been adjusted to protect the anonymity of these owners. The lessons to be learned from their experiences are vital to business survival.

Behind the Times:

A big-ticket retailer that had experienced significant profits through the years from in-store sales was seeing a steady decline in customer volume over the past five years. Despite the data showing that customers in this vertical preferred an online experience, leadership declined to move toward this model because their merchandise was unique and ever-changing, leading them to believe that upkeep of online inventory would be a nightmare. Plus, their inside sales team felt like family, and a shift to an online buying experience felt disloyal. The result? Key people within the organization left as they could see the writing on the wall, and ultimately enough customers took their business elsewhere that this business is now closed.

Brand Irrelevance:

A national subscription-based company had a loyal group of customers who paid monthly for their products. The company’s customer base averaged 70 years in age by the time they approached us. As the income of most of their customers became fixed, many dropped the service for financial reasons. For generations, this company remained laser focused on consistently delivering exceptional services to their loyal customers; only they lost sight of their next generation of customer along the way. As a terribly unfortunate result, this company’s brand and products became irrelevant to younger demographics without them realizing it — until it was too late.

Single Customer:

A tech manufacturing client had a great run of steady, organic growth with 80 percent of its business coming from a single, global client – a client which encountered a significant financial crisis causing it to freeze spending. The result was a complete elimination of purchases from this manufacturer. With very few other clients, a limited pipeline and lack of a scalable sales strategy, significant layoffs were inevitable. It’s at this point that ownership sought outside help to devise a growth strategy but lacked the funds to execute it.

As leaders and owners, it’s so easy to become isolated where your only input is from like-minded people who are in your inner circle thereby limiting new ideas and thinking. I know this because I was precisely in that position — a few years into my firm’s growth trajectory. 

The time to partner with a strategic, forward-thinking marketing firm is during good times, as they are outside of your bubble and can bring objectivity and different thinking to the table as you work to mitigate risk in your business and develop numerous contingency plans for driving revenue. And this is the time you can afford to test various contingencies. 

The job of CEO or owner is not for the faint of heart, and it’s one I’ve admired since the days of watching my father run a company. My hope is to see more success stories, and that begins with picking up the phone for outside consultation from objective advisors while your financial position remains strong.

When that time comes, RedRover is at the ready.

Lori Turner-Wilson is founder and CEO of RedRover Sales & Marketing Strategy. A fast-growing agency of seasoned professionals, RedRover is the only Memphis agency to integrate sales training with marketing strategic planning and execution. RedRover has a uniquely intense focus on achieving measurable results for its clientele, as the only Memphis area agency to offer its clients a results guarantee. The agency’s diverse client roster represents nearly every industry vertical in greater Memphis.

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