Your team is already working hard (or they should be). Focusing on performance improvement is important, but it's a long path to impact. If smart growth is important, reducing friction is the fastest path to impact. What's more, its impact compounds over time. There simply is no better investment to make in your business than reducing friction.
To understand the impact that reducing friction can create for you, consider this example (names have been changed to protect identities and the numbers have been evened out to make illustrating the impact easier to understand):
In 2019 GrowthCo's sales performance looked like this:
|Price/Average Sale Value (ASV)||$95,000|
|Average Lifetime (years)/Churn rate||5 years/20%|
- The GrowthCo sales team added 101 new customers.
- To win those customers, the sales team delivered 306 proposals (closing rate = 33%)
- They worked with 1,530 qualified prospects/sales qualified leads (SQL) to generate the opportunities (fit rate = 20%)
- The average revenue per customer (average sale value) was $95,000 with an average gross margin of 65%
- They generated almost $9.6 million of new revenue and just over $31 million of lifetime value
Friction slows things down. Let's look at the impact that reducing friction by just 10 - 15% can have on just the new business efforts in one year alone:
|Baseline||10% Improvement||15% Improvement|
|Lifetime Value Created||$31,183,750||$41,505,571||$47,426,586|
|↑ Gross Profit||$2,064,364||$3,248,567|
|↑ Lifetime Value Created||$10,321,821||$16,242,836|
That's a 33% - 52% improvement in
Gross Profit & Lifetime Value Created
Without reducing friction, you would have to increase the headcount of your sales team by 1/3rd or more to produce the equivalent result, and note that these results do not include any improvements in performance.