How we re:Designed a Doomed Business and Grew From $4.5m to $25.2m in 22 Months!
Read on to see how I helped this traditional corporate gifting company pivot into a high-value tech SaaS business with recurring revenue.
Grew Revenue from $4.5m to $25.2m in 22 Months
Increased Gross Margins from 10% to 45%
4X Cash Conversion
Improved Cash Conversion Cycle from 200+ Days to less than 50 Days
My Client was a Corporate Gifting company - they sold personalised gifts to businesses to nurture relationships with clients, employees & partners.
➤ My client was in a sunset business - sales were diminishing each year, while costs were increasing, and gross margins became tighter. If things didn’t change, they would have to shut down operations within 18 months or sooner.
➤ Furthermore, when I surveyed the team of 30+ staff to understand more about the business, I asked them “What business are you in?” - and I received 27 different responses to the question!
This highlighted the state of chaos that the company was in, especially regarding its identity, what problems were they solving, what value it was creating and what its value proposition was.
I knew this was going to be a massive undertaking to change the nature of their business. So first, we needed to be guided by facts. I started by getting them to purchase data from Dun and Bradstreet to understand the corporate gifting industry and which was the largest industry in their city of 12m people.
Next, we designed a customer discovery journey. We interviewed almost all the current customers to understand a simple question - what value were they deriving from our services?
At this point, the direction we needed to steer towards became exceedingly clear. The leadership team had an epiphany that they were not in a gifting business - they were in the customer retention business!
Since we knew what we had to do - I made a drastic suggestion. Cease operations of the company for 2 weeks and rebuild from the ground up. They said OK, and we rolled up our sleeves and got to work 15 to 16 hours a day.
By reverse-engineering the outcomes we wanted the business to achieve, we decided it had to be a digital, tech-based business model. Based on their customers’ willingness to spend from the customer discovery data, we introduced an affordable monthly subscription model solution.
Then, we designed the product to include all the essentials that our customers wanted. You can see a summary in the “How To Win” section of the Playing to Win Strategy below - this was the most crucial part of redesigning their business strategy.
The organisation finally has a purpose and direction! They know who they are solving for, what problem they are solving & have a brand promise to communicate.
Marketing becomes easy once they are clear on which market segments has these problems (e.g. F&B, Women Fashion Retail, Large Distributors with resellers).
Sales become easy because there is no selling. They simply present in story-telling mode, show the facts and demo how the product works and usually clients sign up during the 2nd meeting.
The salespeople were closing an average of 10 - 15 clients per month.
We added 5-6 sales staff per month over the next 4 months.
The entire team grew from 32 to 167 people within 2 years.
With Agile Scrum implemented across the company and Daily Ops Standup Huddle, communications improved, priorities were aligned and execution became blazing fast!
The organisation suddenly becomes alive and feels like a wet market, noisy, engaged, driven, and starts running on its own - the founders no longer have to fight fires daily.
Now, the challenges they faced changed from survival to managing growth and scale, like when to raise Series B, and how often to do townhall meetings.
Scaling-Up! Ventures is a Strategy innovation, Growth and Service design company. We are a team of Entrepreneurs, Play to Win Growth Strategists, Management consultants, People developers, Executive coaches and Business mentors. We link Strategy & Execution, Business & Design, Context & Technology, Behaviour & Growth with Trends & Insight. We facilitate & guide Organisations to re:Imagine™ their business under the light of innovation and we facilitate them through their creative transformation journey step-by-step. Startups & SMEs we work with, we provide support to raise venture capital funding and/or acquire alternative financing of up to $5M after completion of our 10X Growth Outcomes Journey.