Top 9 Reasons Technology Companies Stop Growing
July 7, 2021 •Nikole Rose
Every tech company wants to experience 5X growth year over year. And you may have started that way. But something eventually happens where growth starts to plateau.
If you have started to see your growth plateau or feel a plateau coming, here are the top nine reasons that prevent technology companies from continued growth.
1) Outsourced HR
As you build a tech company, you need the right people on your team. Unfortunately, it’s often difficult to find the right people, so the easy answer is to outsource HR. With an outsourced HR firm, you can focus on building the business, and outsourced HR can focus on finding the people.
There are a few problems with this model.
- When you outsource your HR, no one focuses on the development of the culture. For long-term sustainable growth, you need a company culture that invites employees to live into a purpose larger than themselves.
As of June of 2021, surveys show that 25% to 40% of the American workforce will change companies or careers in the next 12 months. It’s called the Great Resignation. It’s happening because people don’t feel purpose in their work. When you outsource HR, you can’t develop a culture driven by purpose.
- In a young company, your people will make or break you. They are helping you lay the foundation of the company you will become. You want to ensure you are getting quality people, both culturally and technically. These people will likely become your future leaders.
- It’s challenging to ensure the vision of the company is conveyed through a headhunter. If you’re getting started, you likely don’t have a formal process for really anything. You need people that understand and have bought into the vision. Once they know the vision, they can make tactical decisions that align with the company’s overall direction.
- Sustainable growth requires employees to invest in the team long-term. Head hunters are typically compensated based on their ability to find an employee that stays around for 1 year. For many tech companies, it takes a year to understand the product. If you have a revolving door of employees, you can’t grow.
- Technology is… well, technical. Unless you have partnered with a headhunter specializing in finding candidates specifically for your job description, most candidates can sound like they know what they are talking about in an interview. You want to ensure you’re getting the right people. When you have internal HR, you have the opportunity to have HR pull in the right people for interviews to ask detailed and specific questions.
When you bring your HR internally, you ensure you are getting the best people, both technically and culturally. When you get qualified people that buy into the vision, they will put in the extra effort to grow the company to see the vision becomes a reality.
2) No Internal Processes/Lacking Tech
When you are getting started, a lack of processes is typical. A process is simply an agreed-upon best practice for doing a task. When you haven’t ever done a task, you can’t create an effective process.
With that said, a lack of processes doesn’t lead towards sustainable growth. Processes result in scalability. You can teach people a process.
For most companies, you need to simply start developing processes in a word document or google drive. This is not a permanent solution, but it’s the easiest place to start. As you look to further scale, you’ll need to operationalize your processes by implementing the right technology.
Almost every technology company will need the following tech to scale properly. Below is the technology you need to implement to effectively scale your business.
- A CRM- Keep your data clean, organized, and easily accessible. This will become the organization’s one source of truth for everything customer-related.
- Marketing Automation- People expect speed. When they request a demo on your website, they need a calendar link and meeting confirmation in less than a minute. That’s where you can use marketing automation.
- Sales Pipeline Organization- You need the ability to visualize your sales pipeline. If you see a deal has been stuck in the agreement stage for 30 days, you need to get that deal unstuck and won. Tech to help you see your pipeline will help you know where to focus.
- A Ticketing System- You’re in tech. Things will break. You need a streamlined way to ensure your support people can handle the requests as they come and keep existing customers in the know. A ticketing system will help.
Cloud-based technology is essential in the wake of remote work. When you implement technology that ensures your can operationalize your processes and enable your employees to work from anyway, you ensure your company can continue to scale no matter the situation.
One of the main arguments for implementing processes is that the company will lose the agility of a start-up. Your processes become the foundation you can grow from. Without the processes in place, you can’t start to impact the companies growth systematically.
3) Not Enough Human Capital
One of the many common themes within the technology space is the tech start-up. With the constantly emerging technologies, it seems like there could be a start-up for every potential product or service.
One of the downsides to a start-up is that everyone needs to wear multiple hats. Many start-ups only include aspirational business leaders and executives. You will need to eventually bring on more people and skillsets to grow the business. The lack of people won’t lead to sustainable growth.
Hiring enough people is about more than helping you meet the needs as they arise. It’s also about retaining current employees. Without enough people on staff to keep up with the rapidly growing demands of the business, you will end up having people feel burnt out and frustrated.
One of the best ways to help mitigate the frustrations of a lack of people is by developing a hiring plan. You can then understand what you will likely need at each stage of growth and how much revenue you need coming in to justify the next hire. With a hiring plan, you can ensure you are enabling your business to grow sustainably.
Though you won’t get a perfect hiring plan, having a general understanding and direction will make your hiring process exponentially easier.
4) The “Build It and They Will Come” Mentality
Every technology company needs a great product. Without a great product, you simply won’t stay in business long. The problem that companies run into is that they focus so much on exclusively building the product, they never promote.
Imagine you're cooking an amazing dinner for your friends. You get all of the ingredients, cook it, set the table, and wait for your friends to arrive. No one shows up, and now you have an amazing dinner with no one to share it with. The problem is you never invited your friends over. Marketing and sales of your product are the same as the dinner invitation for a dinner party.
It simply doesn’t matter how amazing your product is. If no one knows about your product, they won’t buy it. Building it won’t make people buy. You need to tell them what you have.
In reality, digital marketing has made it easier than ever to ensure you are getting your message in front of the right people at the right time. If you aren’t implementing any digital marketing efforts today, you are missing out on revenue. With the right digital marketing tactics, you can start telling your ideal customers about the product you have and how it will help them grow their business.
5) Unclear Messaging
Even if you are doing marketing, many technology companies have a terrible message. Many technology companies use incredibly complex jargon. There are emerging technologies that invest a new term in explaining what their technology does.
As a result, most people don’t understand what they are talking about. There might be a gap in knowledge that only people in your industry know what you are offering. In most cases, that sentiment is shared as a crutch to avoid doing the difficult work of clarifying your message.
Taking the complex and technical products and having the ability to communicate what it does to a 5th grader is difficult. The average reading level of an American is a 7th-grade reading level. To ensure your audience knows what you are talking about, you need to use clear language.
Lastly, you know your target audience, and that decision-makers likely may know exactly what you’re talking about. Unfortunately, it’s often not the decision-makers doing the research. It’s typically someone that works for them that brings them a list of options. If you can’s explain your offer in a way that a more junior employee will understand, you are likely not going to end up on this list.
It doesn’t matter if you have the best product on the market if no one understands what you are selling.
6) Outdated and Non-Scalable Marketing and Sales Tactics
The tactics that started to build your company are not likely to be the same tactics that will scale your company. If you entirely build a business through cold-calling, you are only doing addition. You can only potentially make one sale for every call you make.
To ensure your company can scale, you need to transition from one-to-one tactics alone and start implementing one-to-many tactics. When you have tactics that can reach numerous potential customers without additional effort, your marketing and sales efforts start to have a multiplicative effect. You put in the effort once. It starts to pay dividends in the future.
For example, blog content has a multiplicative effect. You write a blog to answer one customer’s or prospect’s question. That effort put in enables you to grow significantly more than a single cold call. Now you have a piece of content that can start to drive traffic organically in search engines, can influence social media content and enables your sales team to start answering questions that arise in the sales process more easily.
Additionally, many technology companies have made their main source of growth something entirely out of their control. When COVID hit, and every tradeshow was canceled, many companies didn’t know what to do.
You must build a marketing strategy around something you own. Referrals are fantastic. You can’t own referrals. Tradeshows and digital search ads are great ways to get in front of a lot of customers. You don’t own those channels.
If you want long-term sustainable revenue growth, you need to build a marketing strategy that engages people on various platforms and brings them to the digital channels you own, like your website and email list. No matter what happens globally, email will be around, and it’s a direct line between you and your customers.
7) An Incredibly Long Buying Process
Many tech companies struggle with their buying process. They want to ensure they are attracting qualified leads to not waste time with people who can’t buy. On the other side of things, many know that the customers want to see a product demo.
The difficult spot they find themselves in is adding more layers of qualification to ensure they maximize the time of their most specialized people. The problem with the numerous layers of people is your buyers have likely requested a demo. It shouldn’t take three calls to get to a demo. If they have asked for a demo, they are probably ready to buy today.
You need a buying process that reflects the ways buyers want to buy. If they request a demo, they don’t want a meeting for qualification. If you are getting tons of unqualified traffic, you need to educate potential buyers through your marketing content better.
You may also want to consider adding automation that can help to qualify an account better. If someone is an ICP fit and has requested a demo, they should have the opportunity to receive a demo immediately. If someone might appear unqualified, have a very short initial conversation to qualify them. It isn’t recommended that you completely automate the qualification process as you could lose great opportunities and never know. Simply incorporating some automation into your sales request form will allow you to streamline the process for those you know are qualified.
8) Difficult Onboarding Process
Technology companies often offer complex products. As a result, they have a complicated onboarding process. When you have a difficult onboarding process, you create an incredibly poor start for your customer relationship.
Most technology companies use a business model that thrives based on recurring revenue. A poor onboarding colors the remainder of your relationship with the customer. When you don’t start well, they end up always remembering the frustration even to get started.
Additionally, the longer it takes customers to get started using your product, the more likely they are to churn. They are paying for a product that doesn’t deliver results. They are going to become frustrated and eventually leave.
Lastly, if they can’t onboard quickly, they won’t fully adopt the product. If they don’t start using your technology as a critical part of their success, your product will get cut when budgets become restrained.
One of the best ways to streamline your onboarding process is to implement learning management software. With an LMS, you can easily create video tutorials that dramatically improve your ability to onboard clients more quickly. The primary benefit is that the customers can onboard themselves independently instead of sitting on numerous calls over months. They can onboard themselves in many cases, which saves you time and makes them happier.
Should you still have customers that want you to onboard them, you can create an upsell opportunity. The upsell opportunity simply has a product expert walk them through the onboarding process.
Using the LMS, you end up creating a consistent onboarding experience for every customer. You make the onboarding process easy for them no matter what they choose.
9) Lack of Continued Education for Customers
You may have numerous products you offer that all work well together. You may have integrations that make your product work even better. You may just want to drive the adoption of your product. Regardless of the exact reason, every technology company needs to offer continued education surrounding its products.
Unfortunately, many companies severely lack any kind of ongoing education for their customers. As a result, the easy opportunities to upsell, cross-sell, and drive adoption are missed.
If you implement an LMS for your onboarding process, you can use that LMS to drive continued adoption and learning of your software. A prime example of a company that does this incredibly well is HubSpot Academy. HubSpot teaches their customers exactly how to use the platform and teaches them the methodology behind why they recommend what they do.
When you continue to educate your existing customers, you show that you genuinely value their success. You show them you want them to succeed. As a result, they will stay with your company.
So What’s Your Problem?
Above are nine problems that prevent technology companies from continued growth. The problems were outlined in a way to help you identify which problem you should tackle first.
With that said, if you are a marketer that has no influence over HR, you should start with the earliest problem listed that you can impact today.
Start by mapping out your customer’s experience.
Identify the gaps.
- Do you not have any automation to streamline the buying process?
- Do you have a terrible onboarding process?
- Do you not have marketing tactics you can scale?
Start by filling the most obvious gaps. If you were to fix all of the problems outlined, it would likely take years.
There’s only one way to start improving the long-term success and growth of your company. Start by taking this list, and identifying the areas of improvement. Then start.
If you’d like support in improving your customer experience, please schedule a call today.
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