Whether the ball is in his court or not, you can be sure that Michael Rich is playing offense. For proof, just look at what he’s doing with Equitrac Corp. in the midst of a recession.
The president and CEO led the company to record product sales and $60 million in revenue for fiscal 2008 by expanding into the education market. Now, you’ll find Equitrac’s print management solutions in 50 of the top 100 universities, in addition to the offices of about 20,000 customers in 40 other countries.
“We could have said, ‘Let’s brace for the worst recession ever,’ and the next thing you do is you start retrenching, limiting your plans, cutting costs, firing people,” says Rich, who manages 300 employees. “If you believe in your vision, you’ve got a great team and you’re executing in the market, you don’t go into a highly defensive posture. You’ve got to stay on offense and work through those challenges.”
Smart Business spoke with Rich about weighing opportunities to grow during a recession.
Maintain marketplace awareness. Customers and partners are the best resource to help guide your direction and strategy. So we spend a lot of time in the field engaging our customers and partners. Over the past year, I have been in the field almost on a weekly basis meeting with C-level executives of our end customers as well as our channel partners.
It’s very easy when you engage your customers and partners to want to deliver some presentation to them and do most of the talking. We are disciplined in making sure that we’re doing more listening than talking, and as a result, we get a lot of excellent input. We have to stay on top of (their requirements), and the best way to do that is by direct interactions.
We have to span a number of different conversations with our business partners, not only in terms of what the end customer wants but what we need to do as an organization to support the business relationship. With end customers, you look at their specific feature requirements. You look specifically at their workflow needs in their firms and how to tailor your applications to provide a compelling value proposition. You need to ensure that you’re solving real pain points for the customer.
You need to amalgamate that customer feedback into a set of market requirements. Customers and partners will ask us for enhancement requests for the product. We try to assess how many of our customers are asking for similar things, and then we can make a priority call in terms of what to actually include in the end product.
We will author a document, which lays out the feature requests. Before you actually commit to any specific development agendas, we like to have our partners and customers review those expressions of their requirements to ensure that we have them right.
So the first part is getting the feedback. The second is synthesizing it. And then thirdly is reviewing that information with the customer to make sure that we’ve heard them correctly.
Weigh requests against plans. You can be completely facing gridlock responding to every single opportunity that comes up. We’ve got a game plan that we execute, and that’s how we stay on track. We know what exactly we’d like to accomplish for the year. We’ve got a level of financial discipline to make sure that we pursue opportunities that can deliver profitable growth to the company, not just pursuing revenue for revenue’s sake. In other words, don’t respond to any opportunity just to get another couple of bucks of revenue in the business.
Make sure that you’re looking at every opportunity through a strategic lens. You’ve got to look specifically at: What are you trying to accomplish in the marketplace? How do we define success? What kind of growth targets are we looking at, and how does the market support those?
You need to ensure that you don’t let opportunistic revenue scenarios take you too far afield from your core strategy not to say that you don’t look at and seize opportunity when it presents itself, but it’s got to be in the context of not only your strategy but your core competency as a company.
When we start a new opportunity, we look at the market size, the product fit. We evaluate our go-to-market strategy in other words, how are we going to deliver the product to market, how is it going to be serviced and supported, what kind of investments are going to be required to evolve the product over time?
Some days you say to yourself, ‘Why are we not running after that revenue opportunity?’ You can always sell a couple of products to a couple of customers a market that does not make. So we’re looking at the broader market opportunities. When you’re looking at scaling your business, you can’t have a lot of one-off solutions for a single customer. You’ve got to build your products with an eye toward the market so you can continue to grow and scale your business.
Research decisions. We don’t have infinite resources here. We’re always evaluating where to put the next incremental or marginal resource. While you might have a broad market opportunity, the momentum in those markets can help guide your resource allocation decisions.
The momentum of our business is typically defined by our sales results. So if we see particular strengths in one geography versus another, we’re more confident in investing in those. If we see a specific market that’s growing faster than another, it becomes somewhat of an easier decision to invest in those growth opportunities that have shown and proven that the value proposition is working.
Our greatest challenge is where to make those investments first and how to prioritize them. Sales results tend to be an excellent guide for that. You don’t double or triple down on a particular strategy until you see some results.
We have the operational systems in place that we can track revenue against those product categories. We have daily reviews of our sales results. ... So if something is not achieving its targets, we know it very quickly.
How to reach: Equitrac Corp., (800) 327-0183 or www.equitrac.com