Great Not Big

On running a small, innovative company
  • Blog
  • Speaking
  • About

Great Not Big

On running a small, innovative company
  • Blog
  • Speaking
  • About
Sales & Marketing,

The problem with good marketing

by Carl EricksonJuly 30, 20117 comments

The payoff for successful marketing is supposed to be increased sales. One frustrating aspect of innovation services firms can be their inability to take advantage of all their marketing success. Ironically, success in marketing can actually create problems, along with sales.

Unlike a product company, the capacity of a service company is strictly limited by size — you can’t just crank up your machine and make more of what you sell. This is a great thing when you’re bootstrapping, but not so great once you’re established.

Atomic’s upfront team will handle three times the sales opportunities in 2011 as we averaged during the period 2006-2009. The dramatic increase is partly the result of how successfully we tell our compelling story. We can also credit being in business for 10 years, having a good reputation, high demand for repeat business from our happy customers, and a general under-capacity in our industry.

So what’s the problem with having 300+ opportunities but the capacity to deliver only approximately 75 projects annually? Unfortunately, there are several. First, it takes a lot of time to handle 300+ opportunities with care and attention. Second, it’s darn discouraging to work hard on a sale, knowing you may not end up having the capacity to complete the work. Third, every project you win creates the immediate need to sort out several internal complexities (putting together the right team, optimizing the strengths and availability of individuals, delivering within the customer’s time constraints, balancing the competing demands of other existing projects, etc). All of these complexities are exacerbated by constantly running at or near capacity.

On balance, the positives of being good at marketing outweigh the negatives, of course. I just find it ironic that there are in fact any downsides at all to successful marketing. As with most hard problems, this is one worth solving, and we’re experimenting with some new ways to balance demand, capacity, and our sales process.

  • About the Author
  • Latest Posts

About Carl Erickson

Carl is Founder & Chairman of Atomic Object, a software product development company with offices in Grand Rapids, Ann Arbor, and Chicago.
  • Attention: Spending Your Most Valuable Currency - February 10, 2022
  • Slicing the Revenue Pie in a Multi-Stakeholder Company - July 30, 2021
  • Commercial versus Existential Purpose - July 19, 2021
  • How I Misunderstood Mentorship and Benefited Anyway - June 16, 2021
  • Sabbath Sundays and Slow Mondays - June 4, 2021

7 Comments

Mike Karlesky

July 30, 2011

And saying no to new opportunities too often can be a detriment to the valuable reputation established…

Reply

Carl Erickson

August 2, 2011

There’s the rub, Mike. Balancing a desire to help, internal workloads, the dynamic nature of our work, brand risk, and a customer’s needs makes this a tricky problem to solve.

Reply

Dave

August 1, 2011

Nice post, Carl – GREAT to hear you are having good problems!

Perhaps this gives you an opportunity to position yourselves in your best fit markets?  We are money managers (also in the service business) and have found that approaching the top end of our growth objective has brought in more opportunities.  When dealing with prospects it allows us to be more clear on the terms we prefer, let marginal business go by, and refer out to adjacent peers when appropriate.

We have found this to be an excellent condition for our business (too many opportunities) and I hope that you find the same in your line of business as well.

Reply

Carl Erickson

August 2, 2011

That’s the hope, Dave. We’ve begun experimenting with the techniques you mention. Nice to hear that it’s worked well for your company.

Reply

Jeremy Yamaguchi

August 2, 2011

I’ve had these problems in the past with my company, as we have found that sudden spikes in leads have resulted in decreased conversion rates as our operators struggle to keep up with demand. 

I’d be very interested in hearing about what solutions you come up with to some of these seemingly universal problems.

Reply

Carl Erickson

August 2, 2011

Conversion rate is something we track and look at occasionally. It’s interesting to see how this problem wrecks that metric. We actually introduced a new “closed” status in our CRM to indicate we couldn’t pursue for lack of capacity.

I plan on an update on our experiments at managing demand and capacity in a few months.

Reply

Analytics can't measure customers for innovation services firms | Great Not Big

September 2, 2011

[…] website visits and potential customer visits by day.I estimate we’ll handle approximately 300 sales opportunities this year. Even assuming they all came through the website (they don’t, obviously), and […]

Reply

Leave a Reply Cancel reply

About

Great Not Big is the brainchild of Carl Erickson, Founder of Atomic Object. It’s where we chronicle our management successes and failures, and share our ideas for creating a successful small company where people love to work.

Subscribe to Great Not Big

We'll email you every time we publish a new post.
Email:

Explore by Categories

Blog Speaking About Privacy Policy
Copyright © 2022 ATOMIC OBJECT. All Rights Reserved.