The Issue – August 2019
ARE YOU MISSING YOUR GROWTH TARGETS?
Here’s How to Recalibrate With a Sales/Marketing Assessment
By Mark Quesenberry
Adrift in the Doldrums
Oftentimes during a company’s growth trajectory, sales revenue can hit a period of stagnation or underperformance. You can see the signs: net new sales are down, customer acquisition is not occurring at the same pace or are much lower, misses in revenue and growth targets occur in successive quarters, and sales and marketing morale is low.
The cause could be external, such as changed market conditions and other macroeconomic issues like tariffs or financial crises. Yet, what if market conditions are good and the same concerns occur?
What should a company do when its sales and marketing teams don’t have answers to why the team is not reaching the performance goals? How does a company adjust, if the growth problems are coming from inside its own four walls?
Assess your Environment
A sales/marketing assessment is the first step in a three-part continuous improvement exercise, called sales/marketing optimization. It provides a company with a baseline of its current sales and marketing groups, collectively or individually. An assessment should cover these key areas:
- Market Planning
- Sales/Marketing Operations
- Metrics & Reporting
The assessment should provide facts, findings, and prioritized recommendations to help company professionals understand which suggestions will provide the most impact, along with timeframes and any associated dependencies.
The results from this assessment phase guide the next phases: 1) implementation of recommendations, and 2) governance to measure success and make adjustments as needed within the process areas.
Sometimes called go-to-market strategy, market planning is oftentimes done once – at the time of the original business plan or company creation – and then forgotten. Sole proprietors and family owned businesses fall prey to this mistake as they become embroiled in the running of daily business activities and feel they don’t have the time or the luxury to move their noses away from the grindstone for a better view of the business. Many times, this is because they have fallen victim of their own early success. Thus, when performance begins to flag, it comes as an unexpected shock for which they are unprepared.
Market planning should simply address the classic journalism questions of: who, what, where, why, and how.
- Whom are we selling to (our target market)?
- What are we selling (our products/services)?
- Where (the means in which a company engages with its customers)?
- Why (a company’s value proposition to the market)?
- How (the company’s sales/marketing method or approach)?
Targeting and market segmentation are important aspects of this review. Many companies don’t have a strong understanding of whom their ideal customer is, or why that customer would buy from them rather than a competitor. Because of this, they tend to often market to a demographic that is not a good fit for their product or services at great cost of time, dollars, and opportunity.
Effective planning and go-to-market strategy should be reviewed on a regular basis to ensure a company is adjusting to market trends, competition relative to the relevancy and appeal of its offering. It is a keystone for a sales and marketing organization and must be checked on regularly, so a company adjusts proactively, rather than when the poor results start showing.
A review of staffing shouldn’t just cover the personnel performing the sales and marketing function(s). Ideally, it should cover culture and compensation as well. It’s important to determine that your organization has the right, experienced people in the proper roles. It’s also critical they are properly incented and that their compensation is aligned with the desired objectives of the company.
Companies can stumble because personnel have grown listless, e.g., there is a disconnect between their task and their reward. I’ve seen many firms in which it makes little to no difference in a salesperson’s salary whether the person sells or sells nothing at all. This may be fine if it’s tied to another metric like customer satisfaction or service scores. On the other hand, to have it misaligned or not to have a variable metric tied directly to performance is a recipe for apathy.
Coupled with that is culture, both at the top of the company and in its sales/marketing leadership. Is it a sales-driven business or a marketing driven business? Worse, is it neither and there is a culture of employees sitting around and waiting for the phone to ring? It requires a look at culture, staffing and compensation to be sure all these elements will engender the results a company wants.
Following from the market planning strategy comes the tactical execution on how to market. Most important is to establish the company’s overarching message to the market, the value proposition. The majority of small and medium sized businesses – even a sizable proportion of large enterprises and the Fortune 1000 – do not have a strong grasp on their value proposition, if they have one formulated at all.
The goal of a value proposition is to define:
- How your company (or product) solves problems/improves situations;
- The benefits a customer can expect; and
- Rationale for why to choose your company instead of the competition
A good value proposition is clear and easy to understand in less than five seconds. Some may think of it as an “elevator pitch” and that’s a good proxy. In my opinion, it is better to think about it not only as its vitally important “first impression” but its lasting impression: how does the company wants its customers to describe it to another potential customer?
Many people don’t understand the importance of a value proposition and think of it as just posturing or flowery words. I’ve worked with many clients who have been in business for ten years or more and have eight figure revenue, whose principals have struggled for long stretches of time to explain their value proposition to me. Perhaps, it’s unsurprising they were also having a hard time meeting their projected revenue goals.
What is the downside when a company can’t impart its value to the market? Its offering, in turn, becomes a commodity. When no value is perceived, the only factor is price and the ensuing race to the margin-thin bottom.
A review of sales and marketing operations covers: 1) the systems and processes that target new customers, 2) the means of messaging them, 3) tracking that messaging, identifying leads, engaging prospects, 4) converting leads to opportunities and 5) tracking those opportunities from prospecting through contract signature and closed sale.
Based on market planning, a company should clearly identify its target market and engage with them. Where and how is a company developing target lists? How often are those lists refreshed and updated? Is the company using a marketing automation platform like a Pardot or Hubspot for demand generation? Does it have a customer contact solution like Mail Chimp or Constant Contact to keep existing customers engaged?
Does the company use a customer relationship management (CRM) solution like Salesforce or Zoho to track its sales opportunities? Does the setup within that CRM match the sales process of the company? Do the sales people even use the solution, much less keep it updated?
Most companies have a significant disconnect at multiple points within this area. They are typically acquiring the wrong type of data, mass-marketing to too broad of an audience, not tracking their results, underleveraging the sales and marketing solutions they’re paying for, and not enforcing practices for sales professionals to use these tools and processes so the company will have accurate business forecasts and historical reporting capabilities.
What happens then? The company has no idea who it’s selling to, where they are having success and where they are having failures, where in the sales process they are losing deals, no reasoning behind both losses and wins. Resultingly, the company cannot understand its forecast or plan accordingly.
It is very much like hurtling down a highway at night in a car with no headlights. There’s going to be a bad accident; it is only a matter of time.
Typically, sales and marketing automation tools include robust reporting capabilities. To a fault, nearly every company does not take full advantage of the data in their possession. These platforms offer details about target markets, through lead contact to close of a sale, and how the company and its personnel perform, in any given sub category, against stated goals.
Companies must decide proactively what areas they want to measure and communicate the reason for measuring. This goes back to culture and instilling a sense of accountability and “ownership” related to performance. Further, when done properly, it provides an indisputable source for reviewing goals and supporting the incentivization process of individuals and teams tasked with creating new business and generating revenue for the company.
It is true one cannot improve something that isn’t measured. Being able to adjust market planning, messaging, staffing, product offering, pricing, and all the related elements of how a company goes to market and sells its goods or services all comes back to understanding the data it is collecting through good metric and reporting.
Then, the data must be used for implementing changes. This is where the process of review is key. How frequently does leadership review reports – individually, collectively with peers in other functional areas, and for the employees within their charge? Is it being done often enough? Too often? It is more an art than a science; but the proper cadence is critical to a successfully run sales and marketing organization.
Where to Begin
CFOs2Go’s CROs2Go practice helps discern the right changes needed and provide the means and process for ensuring your company is constantly evaluating, adjusting and improving.
Learn more about Mark’s latest work with our Cannabis practice group, which supports this exciting, growing industry. https://www.2gocompanies.com/resources/mark-quesenberry-cannabis-practice/
Mark Quesenberry works with a diverse mix of customers across industries, including cannabis, consumer packaged goods, financial services, tech, e-commerce, and healthcare. He has built go- to- market plans for foreign companies coming to the US and led their initial sales. He has served on industry panels for innovation and customer experience, and led master classes for international business leaders on best practices for customer engagement.Partner: Mark Quesenberry Practice Group: Agriculture Business, Cannabis, Consumer Products, Financial Services Topics: Revenue, Sales