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Robert Lalonde on adapting a business model for changing times

Globe and Mail Update

Robert Lalonde is chief executive officer of AnyWare Group, a Toronto company that provides remote-access solutions for the health-care sector. With a strong track record of driving sales growth in high-tech companies, Mr. Lalonde is responsible for directing the company's strategic vision and establishing growth strategies.

In a career that has spanned 20 years, Mr. Lalonde has led companies through growth periods, including Hummingbird Communications, Delano Technology, Fusepoint Managed Services and Pano Logic.

Here, he talks about SalesFuel's experience with Shaw Communications Inc.

Heather Gamble and Eva Gooderham were cash-strapped when Shaw approached them. To do the job, they'd have to forego their pay for three months and invest $70,000 of company money. They decided to go for it. What are your thoughts on this decision?

Robert Lalonde: There are a couple ways of looking at it. From their perspective, they had a confidence level that they could do this because they have sold before in their previous experience. And while some may argue that you should stay within your core competency during a tough time, they thought they could run with this and be successful because they had these skills personally.

What they did is related to their core competency. They didn't try switching from apples to oranges, and that's very important. This was a related capability to what they were already doing and that's why it was less risky. They're taking their competency and doing vertical integration. They've already got that person on the phone. Why not take it to the next level and try to lock in the sale?

I think good business people bend their business model as the economy changes and as they learn things. Very few startups out there are in the exact same business as when they started. They get into the market and start to evolve and learn and meld the business into something successful. What makes many successful startups is the ability to adapt to the environment and evolve.

Ms. Gamble and Ms. Gooderham feel that the current economy has created an opportunity for them to step in and help companies with shrunken sales budgets. How do you see the current state of the economy affecting SalesFuel's market?

Robert Lalonde: Any company that you can promise to help grow their sales in this kind of environment is going to listen. What it will come down to for SalesFuel is whether or not they have a good track record with Shaw, and if they can leverage it. If they do have a good track record, other companies are going to listen and they've got a model that they can replicate and take to other customers. But it's paramount to make sure Shaw is successful before they spread themselves any thinner. Prove it works before you start to replicate in other accounts.

SalesFuel wants to close the sales cycle for more of its clients — but they also want to manage their growth. What's your advice for them on this note?

Robert Lalonde: First and foremost, they need to make sure Shaw is successful and referenceable. Then it's about cash flow. Try to leverage profits from the first deal to help the second one get started. This way, it's not as painful as you start to grow. Growth has to happen within your capabilities and your cash flow. Lack of cash flow is the No. 1 killer of small companies.

Your business has to be growing at a healthy rate you believe is consistent with your objectives. You don't want to stagnate. If you're growing too fast, you're going to see it in your cash flow and your people will start to feel pressure and your customer service will start to decline. If your customer satisfaction and cash-flow metrics are stable and sound, you can keep pushing the envelope. But don't go past the point where those core metrics are in good shape.

How can they leverage their success with Shaw to create more success for SalesFuel?

Robert Lalonde: Make Shaw extremely successful and take that and package it into an offering you can easily replicate, as opposed to doing one-offs each time. Take all the competencies, process and skills that [were] gained through Shaw and try to replicate those as much as possible so that each customer is somewhat cookie-cuttered. This avoids going through new training each time and is more efficient.

And moving a sales cycle forward is always much easier if you have customers that will speak for you. It can be name-dropping or using them as a specific reference by phone. Having good customers will help you get more customers because there's less risk for the second than there was for the first and a lot less risk for the tenth.

If you have a bad customer experience, it will get around industry very quickly. If someone has a bad experience, they tell five friends. If someone has a good one, they tell maybe one.

How important is diversification for a small business in this sector?

Robert Lalonde: I think it's good to offer more where it's a related competency. It's risky to diversify into completely new offerings and unrelated solutions. If small businesses spread themselves too thin, they can run a risk. What SalesFuel has done here is expand into a related competency and put another tool in the tool belt, as opposed to something totally different.

If you move too far into other offerings, you get out of your competency and sometimes customer service can suffer and can distract the core team from old business, which can cause your original customers to be dissatisfied.

It's important to go to either the same type of product to new customers or a new product to the same customers. Don't go to new products and new customers at the same time. Do one or the other, or you're probably doing too much, especially for a small business. General Electric may be able to do it; SalesFuel can't.

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