Many businesses – and people – are ashamed of their mistakes. Don’t be: one Sydney consultancy has learnt its best business lessons by initially getting it wrong.
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Entrepreneur: Helena Krel, Founding Director
Company: StratigiSolve
Business type: Strategic marketing consultancy
Founded: 2002
Employees: Three permanent staff
Turnover: (2002 - 2003) Less than $1M
Head office: Sydney, New South Wales
Contact details: +61 2 8753 1569
The StratigiSolve Story
Starting a new business is rarely easy. Sometimes the business model is wrong, or the market research is faulty, or budgeting is inaccurate. Perhaps the wrong staff have been hired, or office procedures are woeful. Even the best fledgling businesses will get some things wrong. But the smart ones learn from their mistakes - and become stronger because of them.
Ironically, when StratigiSolve started in 2002, delivering strategic marketing solutions for companies in the information and communications technology sector, it ran into problems as it tried to market itself.
At first, the company’s three directors relied on word of mouth and their own existing networks to win new business. But within a few months those sources were exhausted. StratigiSolve dealt with its own marketing problem by forging partnerships with complementary organisations, including venture capital incubators and selected human resources consultancies. The strategy has been successful.
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Key learning points:
- Telephone shyness - Just pick up the phone and call. It is essential to connect and talk to people. Do not wait for the phone to ring with new business - it rarely does.
- Referrals - Ask satisfied clients for referrals - it can be surprising how often they will pass a good contact on to colleagues, or even their competitors.
- Sub-contractors - Keep a database of sub-contractors who are available for work. Sickness or new business may mean that they are needed at short notice.
- Contract details - Make sure that any follow-up agreements or scope changes are signed with the same person who made the initial contract. This avoids ‘he-said, she-said’ conversations.
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Next, StratigiSolve compiled a database of information and communications technology sector companies - 1,000 in Australia and 700 overseas - and began direct mailing them. At first, that failed to produce the desired result. Helena Krel, a founding director of StratigiSolve, says: “Our initial mistake was failing to follow up. For a few weeks, we sat there waiting for the phone to ring. We only had one or two calls. So we hired a contract telemarketer to get on the phones and follow it up. Once we did that we were much more successful. We found ourselves doing three to five meetings a week.”
Direct mail followed by telemarketing is now the company’s main method of finding new clients. Krel dismisses advertising campaigns, which she views as a way to burn through a lot of money very quickly.
The follow-up strategy works effectively with networking. When StratigiSolve completes a project, it leaves a five-point questionnaire with clients seeking ways to improve customer satisfaction. The questionnaire also asks whether the client would refer StratigiSolve to colleagues in the industry.
Krel says: “I was really surprised given the competitive nature of the industry. People have made calls to colleagues to introduce us or dropped an e-mail, giving us an introduction.”
With three directors and no other staff, StratigiSolve outsources its project work to sub-contractors. But Krel says there were initial problems in managing time and resources. “At first, until we got two or three capable ‘subbies’ on board, it was tough. If you’re spending your time in the business-development side, there is no one to do the project delivery. It’s that kind of see-saw balancing act.”
Krel also learnt the importance of having back-up resources: “Quite a few times, I got caught out where I had signed something and would then ring a particular sub-contractor, only to find that he was booked solid on something else for six weeks. That hurt.”
A third business lesson came at the cost of considerable pain to the bottom line. StratigiSolve began one project for a client, reporting directly to the client’s managing director. Halfway through the project, he hired a marketing director who narrowed the scope of the assignment. StratigiSolve felt the project was no longer viable and withdrew from the last portion of the contract.
Krel says: “If the project manager from the customer side changes halfway through a project, don’t assume that things will remain the same. But we were right to walk away. We are absolutely religious in controlling our man-hour and utilisation rates. This is how the big corporates work. If we are not making between $750–$1000 a day on something, we pull away from it.”