Getting the Most from your Sales and Marketing Efforts
Most executives and business owners want to grow their respective business’ revenues. Typically, this goal is one of our clients top three priorities. Some will have ideas about a combination of new products or services as well as markets or market segments where they may unlock additional sales. A significant number, however, may be overlooking the need to undertake a more strategic approach to augmenting their revenue generation approach prior to striking out into new markets or with new products or services.
Our research indicates that only about 30% of sales-oriented organizations are considered as high performing (meaning consistently achieving or exceeding revenue goals). Every sales business’ revenue growth plan should also include identifying
performance improvements within existing channels through focused pricing, segmentation and sales force management strategies.
Similar survey research suggests that about two-thirds of sales forces don’t achieve their sales targets, and, with a quarter of these cases, their sales managers aren’t even aware that these performance lags exist. Just 40% of firms have an active sales “playbook,” thereby limiting their ability to scale. Many don’t recognize that effective use of technology and analytics to optimize pricing can boost the top line by between 6% and 15%, conservatively. A key take-away from our research and experience is that monitoring of a sales process is a core attribute, and one of the primary determinants, of any high-performance sales organization.
Inside, then outside
Recently, one of our insurance clients that provides policies to other financial institutions approached MNP with a revenue growth challenge. The company wanted to extend its reach to an under-served sector of the market that included mortgage underwriters and other alternative lenders. But our client wasn’t certain whether expanding to this new market would be financially viable.
We assessed the market potential in terms of revenues/volumes, assessed the competitors already selling into that market segment and completed a SWOT analysis. We next completed a pricing and product review and an organizational review to determine the firm’s capacity to address the new market segment. In the end, the key question facing our client involved determining not just the potential top-line revenue growth, but also the internal changes required to carry out this strategic expansion.
Our advice to this client and others seeking creative yet pragmatic approaches to growth is to adopt a multi-disciplinary strategy that focuses on a handful of core themes to create a highly productive sales operation:
1. Products & Pricing
How well do you know the market and what else can you learn about your customers’ needs? Before venturing into new markets or untapped regions, you should ask yourself what other products or services you can provide to your existing customers.
As importantly, does your company’s pricing reflect the value assigned by your customers? In many cases, the answer is "no" because businesses haven’t undertaken this type of analysis. At MNP, we use strategic pricing analytics models to help our clients determine optimal pricing levels that will reflect the full economic value of a company’s products.
2. Market Segmentation
Does your business invest the same level of effort when selling across their portfolio of products, or do they invest more resources into those segments that generate the highest margin sales? Before venturing into new terrain, we advise our clients to carefully evaluate their existing markets so they can identify both the most productive segments as well as those to be avoided because of risk and low return. The segmentation exercise, moreover, doesn’t just support revenue optimization in existing markets; it is critical in executing sales campaigns in new segments, sectors or geographies.
3. Sales Management & Optimal Organization
Do the company’s sales managers benchmark and monitor the performance of their teams and make the best use of CRM systems? Our experience suggests many firms fall short, which means they aren’t optimizing revenues in their existing markets and product lines. By contrast, businesses with high performing sales operations always employ both a disciplined approach to tracking sales and an effective coaching and mentoring culture.
Such insights aren’t always “rocket science” and, often, the changes can be readily operationalized. We recently worked closely with the B2B sales and marketing division of a large telecommunications firm. Over a short period, we helped the firm develop a new coaching culture to replace an outmoded style of management to reduce the feelings of fear in the sales force. We also recommended strategies for using technology as an enabler, one that can help sales organizations move steadily up the performance ladder.
Through organizational design, you can help your business optimize the competencies and capabilities of your sales team and the management organization that supports them. Ultimately, MNPs sales performance solutions are designed to target these key levers and work in tandem to support the organization’s broader top-line growth goals. To learn more about our solutions, drop me a line anytime.