If your company’s revenue has stalled after a period of rapid growth, you may have fallen into The Mile Wide Trap.
Consider the case of Rachel (not her real name) who runs a public relations firm. Kim studied marketing at school and went on to work for a big advertising agency where she spent ten years learning a variety of marketing disciplines, from public relations to advertising to direct marketing and social media.
Then Rachel decided to leave her job to start a public relations firm. Given her depth of experience and connections, she quickly landed a regional retail business as a client that directly competes with national Big Box stores and was asked to handle their regional events. She hired some helpers and her start-up agency quickly began to grow. Rachel did a great job with the events, so she was asked to handle their annual sales conference. Again she delivered with style and creativity.
Impressed by Rachel’s innovative approach to the event, she was asked to handle some of the creative for their next advertising campaign. Rachel had started her company to do PR, not advertising, but this retail business was a great client so she agreed to help out with the ads.
Then Rachel was asked to take a look at their website. Rachel’s new employees had no experience with web design, but Kim had done some website jobs back at the ad agency. Not wanting to disappoint, Rachel started to personally handle projects that her employees didn’t have the ability to execute.
Rachel didn’t worry about new business development for own firm because the more this regional retail client asked Rachel to do, the busier – and more profitable – her firm became.
Then one day Rachel looked at her monthly P&L statement and realized that, for the first time, their sales were flat on a month-over-month basis. The next month it happened again and then again. Rachel had run out of hours in the day to sell – she had inadvertently fallen into The Mile Wide Trap.
The Mile Wide Trap. The Mile Wide Trap ensnares you when you do an excellent job serving a small number of great customers and they ask you to handle more of their work. You keep delivering, and they keep broadening the list of products and services they want you to supply.
Your company is wildly profitable serving the expanding needs of this small list of “great customers” so you keep falling deeper and deeper into the trap.
Pretty soon, you’re an inch deep and a mile wide in offerings and the only person in your company with the depth of industry experience to deliver all of the services is you. But you’re trapped because your expenses have crept up as your revenue has exploded – leaving you dependent on the sales you get from a small group of demanding customers.
With no more hours in the day, your company stalls and you run on a hamster wheel just trying to keep what you’ve got.
The Solution: Sell less stuff to more people. Instead of selling more things to a few customers, concentrate on selling a few things to a lot of customers.
Nashville-based Ethos3 is a successful design firm that has avoided The Mile Wide Trap. Most design firms are founded by a designer who gets himself in trouble by offering a broad range of design services (brochures, websites, signage, advertising) to a handful of clients. But founder Scott Schwertly knew that in order to scale up beyond himself, he needed his employees to execute the work, and therefore he decided to focus on one very small corner of the design business: PowerPoint presentations.
Schwertly’s focus on PowerPoint has allowed him to train his employees to follow his system for designing presentations. Everything is standardized – from the proposal to project management to the final invoice – so employees can follow a system that doesn’t require Schwertly. Ethos3 has scaled up nicely and counts Microsoft, Google and Cisco among its 300+ customers.
Another example: Flikli.com is a video production studio, but instead of making videos of all kinds, they’ve decided to focus exclusively on two-minute animated “explainer” videos that explain a company’s value proposition simply and effectively. Their focus on creating one specific type of product allows them to standardize their pricing and give employees a step-by-step guide to making great explainer videos. Flikli has scaled up to 22 employees and their work has been featured in everything from Wired Magazine to The Washington Post.
You can fall into The Mile Wide Trap innocently enough: you do great work and a customer wants more of you. But it’s a trap that will eventually choke off your growth. The way out is to follow Flikli and Ethos3 and focus on selling less stuff to more people.
If you’re curious to benchmark your company on growth potential and the other seven factors that drive your company’s value, take 13 minutes and get your Sellability Score here: Get My Score
Five quick start tips for going deeper:
- Precisely define your target audience. Clearly profile your customer. If your customer is women between 35 and 55, that is a huge market. Narrow it by other products is one way to help. Women between and 35 and 55 that drive BMWs, play bridge and belong to a health club could be a segment.
- Identify local businesses that serve the same market segments. These are opportunities for cross promotion and repeat business.
- Create well thought offers to new customers. When using promotional activities (discounts, coupons) be sure they are targeted to acquiring long term customers – not one time takers. Loyalty cards work to retain and sustain repeat business.
- Know your current customer and be creative. Understand why your customer hires you and know what next they will need. If your business trains dogs and your customers want “dog grooming”, partnering with others to provide easy access to grooming – think referrals, mobile connections, experts that will help your clients.
- Be consistent. Providing consistent service or product is expected – don’t stray. Your consistency will be rewarded with your customers knowing precisely what you do and how well you do it.