How can you grow your company’s revenue faster than your industry and faster than your competition? SBI recently spoke with Mark Lenhard, the senior vice president of strategy at Magento, and asked him this very question. Magento provides open-source digital commerce solutions to over 250,000 companies and was recently spun out of eBay. Mark is responsible for helping Magento’s leadership develop and execute their multi-year strategy.
To give a little background, Mark first explained their industry and growth rate. There are a couple of concrete areas where they play around ecommerce, ecommerce platforms and order management systems. “It’s really helping retailers, both B2B and B2C, deliver commerce platforms both online as well as through our order management systems,” explained Mark. Additionally, it’s a large market that is growing steadily at 12%.
Next Mark, and his team, identified who typically purchases Magento’s solutions. Normally the buying decision team involves folks like the CEO, and CTO.
Additionally, they have identified what triggers demand in their industry. The overall growth of the economy plays a part, as does globalization. But another key factor is the need to replace or upgrade ecommerce platforms. “The rate of technology change has been so rapid, particularly over the last 5 years that even the platform you may have purchased just 3 years ago is now dated,” he explained.
Determining Critical Success Factors
In order to grow faster than the industry, Mark has tried to determine the factors critical to his success. To him, it’s all about evolution. Magento must continue to evolve as they grow, and as the industry changes. And it starts with their product. “We’ve got to have a really great product that is cutting edge, and stays up with the market so we spend a lot of time and effort talking to our customers, listening to our customers and ecosystem, and really making sure we are staying best in class,” said Mark. They ensure they have the right product strategy in order to keep up with the market. Essentially, they have identified product differentiation as the organization’s competitive advantage.
Another key to success for the company is the ecosystem itself. They have a number of solution partners and technology partners in addition to their Magento-certified developers. And the health and growth of their ecosystem is of paramount importance to all of them.
And finally, ensuring they have the right sales and marketing team is critical to their success. “No one ultimately tells a story better than you do yourself, so we make sure we’re getting in from of customers, and doing the right things and giving a clear message,” he explained.
We ended the interview by asking Mark to share 3 recommendations to take in order to grow faster than your industry and competition. First, Mark recommends clearly defining where you’re playing, understanding your market, and not trying to boil the ocean. Pick a market. Truly understand where that market is going, what is driving demand, and who the buyers, customers and competitors are. Don’t be afraid to focus.
Next, understand your key strengths and competitive advantage. Play to them by focusing on your strengths, as Magento has with their product strategy.
And finally, translate this information into action plans for the different functions inside the organization. “From sales to HR, the departments need to really understand what market you’re playing in, and what your competitive advantages are in order to know where they’re going to focus,” said Mark. This execution plan and strategic alignment should be cascaded throughout the organization in order to achieve the necessary execution for revenue growth.
If you want more help replicating Mark’s success at Magento, download our workbook, How to Make Your Number in 2017. It’s the operating plan for the world’s top growth executives and will help you make your number in a hassle-free, consistent way, as he has done at his organization.