Hilary Briggs, profitable growth expert and Managing Director of R2P Ltd helped Pinnacle Communications Ltd to increase their monthly recurring revenue by over 100 percent over 12 months by using customer analysis and profiling.
Pinnacle Communications is a telecoms business supplying and installing phone systems, providing calls and lines, as well as support and maintenance.
MD Alex Mathewson was keen to increase the revenues in the “calls and lines” area of the business, as this provided recurring income for the company.
At the time this area brought in approximately £40k per month and seemed to have stabilised at this level.
Alex called in profitable growth expert Hilary Briggs of R2P Ltd, to help him identify ways to grow the business.
Hilary has over 15 years of industrial experience having held senior management positions at Rover Group, Whirlpool Corporation and The Laird Group plc. For the last 10 years, she’s worked with SMEs to improve their business performance and profitability
Analysing the data is an important part of what Hilary does. So her first job was to assemble the information on customer spend that was in various spreadsheets, where it was hard to see the patterns. For the first review meeting, she presented the information of monthly spend per customer in value order as a chart. It was the classic Pareto type graph – top 20 percent accounting for 80 percent of the sales – with a long tail of lower value customers.
Looking at the chart, Alex immediately grasped that if he had a minimum spend of £500 per customer, he would be able to channel the company’s resources better and grow more effectively.
Taking this a step further, Hilary categorised the different types of company and developed an “ideal customer” profile that the sales team could focus on, and the best sources for developing new sales leads, for instance complementary IT companies that made perfect partners for Pinnacle.
Pinnacle then set about re-focusing their sales efforts to concentrate on Hilary’s “ideal customer” profile and to identify other IT companies which could be potential lead sources.
If they got leads that were below the £500 target, they handed them on to a partner better able to deal with them. Although they were aiming at the £500 target, in practice, they started to pick up more customers with monthly spends in excess of £1,000 per month.
“We didn’t expect big growth in the first year, as we saw this as a longer term strategy. Changing the focus of your sales team takes time and we considered the first 12 months to be a preparation period. But in fact we saw immediate results. Our revenue has increased month on month and now, 12 months later, we have improved by over 100 percent,” says MD Alex Mathewson.
Pinnacle is about half way through the implementation process, and based on the growth so far Alex is confident they can reach incomes of £160k per month within the next year.
“By focusing on the £500 per month customers we actually found we were attracting £1000 per month customers too. This has encouraged our sales team to aim even higher. As a result we’ve also seen a great improvement in performance and motivation,” says Alex.
During the process Hilary worked closely with MD Alex and Billing Manager Ian Boyce. By regularly reviewing progress Hilary was able to ensure that Alex and Ian maintained their focus.
“Hilary was very disciplined at making us sit down and “do the work”. It was no good talking about it or planning, we had to actually implement the changes,” explains Ian.
“It was also essential to keep reviewing our progress to see how we were doing. Were we heading in the right direction? Could anything be tweaked? What was working and what wasn’t working? These were all areas that Hilary constantly looked at. As soon as we saw an improvement it was tempting to just keep going without any further reviews, but Hilary made sure we regularly analysed the data and this has meant that our growth hasn’t plateaud. We have continued to grow month on month. Our growth has been better than we ever anticipated,” says Alex.
In summary, by analysing Pinnacle’s customers and refocusing the sales team on the “ideal Pinnacle customer”, the company has seen revenues increase by over 100 percent in 12 months. They project their growth over the coming year to also reach in excess of 100 percent.