Going from £1m to £10m : The FT Longitude Story

Probably the most common business challenge I hear about from agency owners is what could be termed the million pound trap. They’ve got a compelling service or offering of some kind, which they’re successfully pitching to a set of clients and they’re generally running a healthy business with a small team. But they’ve found themselves stalled at about £1m in revenue. This isn’t exact, it might be £700k for some, or £1.5m for others, but it’ll be in that kind of ballpark. After growing steadily to that point, they all too often find that growth plateaus. 

The problem is almost always a situation where the founder(s) is fronting up all of the sales, and they’ve not built a dedicated function focussing on sales and business development. Business owners can cover a lot of ground and handle the pitching and sales process to a lot of clients, but (unsurprisingly) there’s a limit to what they can cope with. What is surprising, though, is how hard many founders find it to take the step of delegating this aspect of the business to a sales professional, with a clear mandate to build a proper sales function and team. For various reasons, there’s often a lot of hesitation around taking this step, but it’s a step that has to be taken.  

When we set up Longitude Research in early 2011, my co-founder Rob and I handled all sales ourselves - and we were fortunate to see strong demand in the market for the services we were offering. During the first two years of the business, we bolstered our direct sales efforts with some external support, bringing in a third party business development team on a risk-only basis (ie, they got paid a sizeable commission for any deals delivered). Together with this support, we grew to about £1m in revenue by the end of year two, which was the catalyst for starting to hire a wider team to help support further growth. It was already clear to us that we’d need a dedicated sales leader and we recruited accordingly. 

Taking on a dedicated sales leader also set the ball rolling on a range of related changes in the business: setting up a proper CRM system and related sales tracking processes; creating a proper pitch deck; and defining a clearer set of products and related pricing. One of the underlying goals was to provide all of the tools and information for a salesperson to go and deliver a deal from end-to-end, without explicitly requiring input from a founder. That goal would take some years to achieve, but it was an important part of the growth journey. 

The ramp-up from £2m-5m  

By the end of year four, we’d definitively broken through the £1m trap, growing in excess of 50% year-on-year to deliver about £2.5m in total revenue - and we’d hired to expand our sales team accordingly. 

During this next stage of growth, the focus on marketing ramped up, with our first dedicated marketing manager joining the team. This set in motion a different set of important changes: a rebrand (to Longitude); the establishment of a proper brand identity; embedding a series of events for clients and prospects; publishing a regular newsletter; and expanding our social media presence (this was around a decade ago, and social engagement was rather different back then). The underlying goal of this marketing activity was to bolster our inbound enquiries, to complement the cold outbound prospecting our commercial team was engaged in. As with the wholly independent sales aspiration, this goal would take years before it got up to speed, but the underlying ambition helped guide the actions being taken at this time. 

Another aspect of the growth story during this phase was a simple underlying strategy we termed “plus one”. Each year, we’d seek to try and add one new focus area across either our product lines, target industries, or geographic regions. For example, at various points we expanded our core set of product categories (then focussed on research and content) to include strategy and design. On the target industry front, our initial triumvirate of professional services-financial services-and-technology was expanded to include industrial firms, and then later pharma/healthcare. On the geographic front, we initially put more attention into mainland Europe, before making a later foray into the American market. Collectively, these acted as core growth drivers for the business. 

Inevitably, mistakes were made. Some “plus ones” simply didn’t gain traction and we’d have to drop them. More often, we tried to do several things at once in a single year, and we’d get overwhelmed or execute poorly. Some additions took off faster than expected, whereas others were more of a slow-burn, which in turn meant we’d sometimes either have hired too slowly, or far too quickly–both being scenarios that were painful to resolve. Nonetheless, many of the initiatives delivered and provided important new sources of growth. Over the next 2-3 years we closed in on £5m in revenues, and by that point the business was featuring regularly in various high-growth awards–City AM’s Leap 100, the FT 1000, Inc 5000, and so on–with an annual average growth rate in the ballpark of 50%. 

The race to £10m 

During 2017, the growth engine slowed, albeit for good reason. What had started off as a conversation with the Financial Times’ events business in early 2017 quickly turned into a serious acquisition discussion with the wider FT Group. By January 2018, after months of intensive negotiations and due diligence, the FT bought 51% of Longitude with the right to buy the remaining 49% by the end of 2021. 

To get the best deal outcome, we needed to quickly ramp up both revenue and profit during that four year period. Of course, one huge difference during this time was having a major brand–and its global resources–underpinning us. For example, while we’d opted against any debt-based financing for financing growth, the newfound luxury of not having to worry about our monthly net cash position helped to bolster our appetite for risk. In turn, we sharply increase the rate of hiring for growth, while boosting investment in our sales and marketing functions. In turn, this fuelled another rebrand to highlight our new link to the FT, invested in a bigger set of events and more regular research reports for marketing, expanded our travel into new regions–and took the step of creating a dedicated commercial presence in the US. These actions, together with the halo effect of the FT’s brand, collectively helped to spur a new phase of growth. 

The aspirational target was to get somewhere north of £15m by 2022. But as the old political saying has it, “events, dear boy, events” got in the way: the arrival of the pandemic in early 2020 was a black swan event that reset the calculus. On the positive side of the ledger, we retained our full team and didn’t resort to furloughing any positions, which was a point of pride. And although profitability was sharply down, we remained in the black. 

Nevertheless, it was clear that our ambitions, and operations, needed a reset. During this time, we pulled out of the US, shifted our marketing events online, streamlined our areas of operations around the most profitable product lines, and split our commercial team into two - a larger group focussed on expanding existing clients, and a smaller team dedicated to new business development. 

An encouraging rebound in economic activity in 2021 put the wind back in our sales, and we finally surpassed £10m in annual revenues, with net margins north of 20%. The shift to 100% FT ownership also provided the opportunity to rebrand to FT Longitude, which in turn will help to reinforce the company’s market-leading position. 

Lessons on growth   

Each company’s growth journeys are different, but we believe the FT Longitude journey provides a number of insights and lessons for other agency owners seeking to break out of the £1m trap, including on the following themes: 

Growth strategy: 

• Setting core objectives and overall strategic direction 
• Target market identification 
• Competitor analysis and differentiation 
• Products, packages and pricing 
• Profitability analysis and optimisation 

Commercial strategy:

• Building, motivating and incentivising a high-performance sales team 
• Building a strong pipeline 
• Creating sales materials that inspire and convert 
• Sales and marketing alignment for effective meetings and relationships
• Account management best practices