Okay. So I’ve used this reference before, but it really fits this story. It’s one of my favorite Steve Martin gags, when he says, “YOU can be a MILLIONAIRE and NEVER pay taxes.” How? “First, get a million dollars.” In some small way, the sketch makes this point: it takes money to make money.
So, what’s it going to take to make $1B? As it turns out, only $200,000. And we know where it’s going to come from. We’re one of a gazillion companies competing for a shot at 12 - $250,000 prizes being awarded by JP Morgan Chase in their Mission Main Street™ Grants contest next month. In the application, Chase asks us how we’d invest the winnings and what sort of return we’d expect. Great question. Here’s our response:
We’ll accomplish this by investing the majority of the prize money in expanding our outreach. This will result in acquiring 40 new clients where we’ll help them double their businesses in 3-5 years resulting in… $1 billion. Here are the details based on our client acquisition metrics:
- Our target acquisition cost (and we’re close to hitting it) is $5,000 per client
- Our target revenue per client engagement averages about $100,000
- Our average client size is about $25M in revenue, 50+ employees
- Our typical client growth opportunity is 100% in 3-5 years
So with the $250,000 grant award, we’ll invest $200,000 in market outreach and national awareness activities to drive the following result:
$200k/$5k cost per client => 40 new clients x $25M growth (100%) => $1B new rev
We’re fairly confident in this pro-forma analysis because we keep pretty good data on our marketing effectiveness. Of course, there are other factors that will contribute to our client companies’ growth and other costs likely associated with implementing the plans we put together with these new clients. But there are also multiplying factors not accounted for that could make the $1B even larger. So we’ll call it a useful analysis for what it’s intended.
Central to our purpose is “making big things happen at mid-sized companies.” This is the fire in our bellies. It’s also the orientation that allows us to think of this contest in this fashion – what will be the impact on our purpose by receiving a $250,000 grant?
One of the biggest areas of opportunity for most mid-sized companies is making the transition from recognizing, “what we do” to “why it matters”. In some lexicons this might be described as going from features to benefits, or from products to solutions. The trick in implementing this transition is clearly understanding how to resonate your messaging and positioning around the relevance of what you do, to whom you do it, and depending on your market situation, how differentiated it is from competitors. This is one of the areas we typically explore in our 2014 Foundation for Growth™ workshops. Check these out to see if they might apply to your business.
We’d love your help. Just go to the Mission Main Street™ site then vote for us! (The process is a bit clumsy; they’re using Facebook for authentication. The voting process makes it appear Chase is going to follow you and your friends around. They’ve assured us this copy is hard-wired into the Facebook authentication process. Anyways, we’ll appreciate your vote.) Let’s make some big things happen, together.