Changes made as a result of the recession may now restrict companies from growing. During the recession, marketing budgets were cut and the sales force chased any customer willing to buy -- at any price. Most likely, sales territories, products in the bag, etc. were expanding, either as a result of downsizing the sales force, and/or expanding opportunities so that they could have a chance to make quota…either way they have a lot of ground to cover.
The question facing many organizations today is how to align sales and marketing activities, investments and resources, against the biggest growth opportunities while still covering the expanding set of customers and products. How can the sales force, and/or our marketing resources to do more? The classic -- do more with less scenario.
Well, the answer this time is you can’t. The reason is that the recession lasted so long (20 months) that everything that could be stretched…has been stretched. It’s now time to reset sales and marketing strategy. Here are five steps to get you started:
- Move the "low hanging fruit" – During the downturn many organizations allowed sales organization to count EVERYTHING towards quota. It’s now time to start moving inbound orders (rebuys) and sales of a certain size (small) somewhere else (most likely telesales) to free up sales force time. Move it quickly, consider incenting them during the first 6 months to migrate transactions to insides sales or partners. Capacity needs to be freed so that it can be redirected to growth. If you are concerned about not being able to move fast enough, just stop paying commission on small or inbound deals and/or do not count them towards quota…nature will run its course.
- Relocate and recondition small customers – Along with small orders, small customers (who often require more than their share of attention) need to move as well. They may have grown accustomed to the special attention they’ve received as a result of the downturn. However, it’s now time to ‘right size’ the cost to manage them with the opportunity they represent. You may want to incent them to self-service via the web or transfer the relationship to a business partner. Do your homework by evaluating customer profitability and set a new higher target.
- Push Sales into bigger deals – After you’ve freed up Sales’ time, focus on increasing the pipeline and average deal size. Turn marketing back on to help (see my post on the Pipeline). It’s also time to ramp up your analytics, segmentation and data mining operations. Build models to help identify opportunities to cross-sell and up-sell products and customers. Corporate Marketing will need to update corporate positioning and the messaging architecture to align with where the market and customers exist. Product marketing has to develop solutions and messaging to drive larger deals.
- Increase price points – This is related to the point above: stop discounting products and services immediately. Wind down incentive pricing, and start developing new offers with customer, and market aligned value propositions. This will be a challenge to manage as the sales force and customers have become conditioned to expect a “good deal," despite the fact that it has been shown to be ineffective. Invest in research to determine how their expectations have been impacted because of this practice.
- Expand your channels – this will be important to several reasons. First, a new “home” for small transactions and customers is needed. The second is that you may not be able to reach or capture the market because it has shifted (e.g. new technology/innovation, competitors, etc.). Invest ahead of the curve as good sales people are hard to find and there is going to be a run on them. Along with reps, get your partners up and running now, and grow into full productivity later.
Lastly, don’t over look the need for change management. According to the Corporate Executive Board, 25% of high performers indicated that they are interested in changing companies as the economy recovers. Invest time in evaluating the impact of implementing the steps mentioned inside your organizations.
Customer and rep behaviors have changed, as well as markets. The recession was one of the longest in our history. It’s a mistake to just snap back to the way it was. Be smart and invest in research on your customers, competitors and markets. Set a three year plan to double revenues, price points, etc. Create aspirational goals and get the organization excited again…it’s been a long time coming.
