5 Steps for Driving Growth

The good news is that economy is on the mend; consumer and customers are buying again.  The bad news is that many companies will struggle to capture that opportunity.

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:

1. 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. 
2. 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.  
3. 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.
4. 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.
5. 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.  

Turning Data into Dollars

Last month I had the chance to be a panelist at a forum hosted by Wolfgang Jank and the Robert H. Smith School of Business at the University of Maryland.  The topic was on Informatics – Data Driven Decision Making in Marketing.

Per my usual M.O., I agreed to participate without knowing what I would discuss.  As I was looking through past project work I made the discovery that this was a topic that I had spent two years working on. 

What’s interesting about the topic is that everyone will agree that they should be more data driven, or fact based, with their decision-making.   Heads will nod when it’s discussed, it’s intuitive, and so the question…and the problem, is why doesn’t it happen?

The company I was working with had an abundance of data but were faced with two consistent problems related to the use of it:

• Reps wanted better insight
• Customers wanted a POV

The first issue we probably spent a good six months on defining what an ‘insight” was, how to create it, and who was responsible for doing it.  The second issue was more complicated and took much longer.

Over that two-year period I learned how challenging it is for an organization to use one source of data effectively across the enterprise.  Some of the challenges we uncovered were typical such as lack of resources, process, and funding.  Others were more challenging: People funded their own resources and research to support their strategy, budget or group. 

To begin to solve this complex problem we created a “data value chain” (see below).   The starting point was having one centralized source for data.   As we discovered, as data flows from across the organization to the customer, enhancements were needed to make it more valuable, like growth rings on a tree. 

As data became more customized, and localized, it grew more valuable.   This helped to identify why, for example, research that was being produced at corporate was not often used by the sales teams…it lacked relevancy, especially in regions outside of the US. 

Once we got everyone on the same page the next challenge was to align the various groups in the organization across the value chain.   We learned there could be as many as five different groups involved in handoffs as the data moved across the value chain.  This help to explain why product groups were developing solutions without market insights, and regions were not leveraging corporate insights for business development.  

As a result, we had to design process maps, hand-off points, engagement process, etc.   The elephant in the room, and one of the biggest challenges was wrestling with the budget.  The solution for that last huddle was turned out to be pretty simple.  

The corporate “insights” team would work with those regions that wanted to work with corporate.   Those regions had to be willing to fund resources to finish the “last mile”…building solution or customer business cases and solutions.  Even though everyone wanted more relevant insight, and more defined points of view, not all regions were willing to put up the money. 

Finally, to secure the funding to make the fixes we had to be able to answer a very simple question; “how does being more data driven provide value to the organization?”

The answer was getting the data closer to revenue or a sale….”turning data into dollars.”  The epiphany wasn’t that the value was found at the end of the chain but the number of groups, and the coordination needed to be involved to reach that destination. 

A Great Marketing Tool Built with Your Tax Dollars

There has been no shortage of criticism of how the federal government spends our tax dollars, in particular over the past two years.  But I found something recently that is worth every dollar, especially if you’re a marketer.  

The Department of Labor's Bureau of Labor and Statistics (BLS) has a fantastic website that includes excellent economic and employment reports, as well as, an incredibly robust and user-friendly database.  The BLS produces some very well known economic reports including the Consumer Price Index and the National Employment/Unemployment Rate. 

 

But it also contains a wealth of information for marketers.   Some of my favorite B2B BLS reports include:

• Occupational Outlook Handbook
• Industry at a Glance
• Product Price Index

My absolute favorite section is the Database, Tables and Calculators.  You could literally spend weeks in this section running reports.  Many vendors resell this information but given how tight budgets are nowadays, do it yourself.  The BLS can help you answer a wide variety of marketing related questions such as:

• Want to understand how consumer spending varies by income?  Got it, Consumer Expenditure Survey.
• Need to know how to modify pricing to adjust for inflation?  Check out the PPI. 
• Want to evaluate which industry to target for a new product?  Go hunting in the Industries at a Glance section. 

The BLS website is a great tool for conducting research on market segments, demographic trends, and consumer habits and spending.  It also an invaluable tool for understanding the health of the economy, price forecasting, etc.

You’re paying for it so help yourself, and for once, feel good about your tax dollars at work.