15 Areas Revenue Leaders Must Consider Changing Now
This pandemic will be over soon. While the costs will be high, scientific innovation and “social distancing” will eventually eliminate this catastrophic disease transmission.
But changes in human behavior, particularly those caused by social distancing, may have lasting effects on how commerce is conducted across the globe. Supply chains, points-of-purchase, and market shares will change in nearly every vertical. But in times like these, we remember our standby old axiom:
Channels don’t choose customers;
customers choose channels.
For revenue leaders, our experience and real-time research point to four simple rules to adjust to changing buying behavior and channel shifts:
- Buyers will accelerate migration to “virtual” channels
- “Surviving” companies must modify their go-to-market strategies
- Rigorous customer research and process analytics will be critical to guiding this change
- “Winning” companies will have highly agile go-to-market strategies whose execution can be adjusted quarter-to-quarter outside of annual planning and budgeting cycles.
To help revenue leaders operationalize strategic change, we have put together a basic three-step process and a sample “checklist” of strategies and capabilities that leadership teams should address before the economy rebounds under a new set of buying behavior rules.
Three Steps to Getting Ahead of the Post-Disruption Curve
Business disruptions can force leaders into “bunker mentality” and miss the opportunity to be an industry leader and winner as the market re-emerges. Conversely, adverse societal, industry or company events can be turned into “magical motivators” to accelerate needed change. There are three basic steps leadership teams need to take to create a sense-of-urgency and measured priorities:
Step 1: Develop Your Go-to-Market Checklist
The fifteen items below are guideposts for structuring a thorough go-to-market strategy re-calibration. Small leadership teams should create their go-to-market checklist across Marketing, Sales and Customer Experience. (Time: <2 weeks)
Step 2: Evaluate and Prioritize the Go-to-Market Adjustments
CEOs, Boards, and employees at-large companies know they can’t do everything at once. Create a focused plan for where dollars and human resource investment needs to go for each of the next 3-4 quarters. Instill agile review processes throughout this response period for agile change month to month based on performance and new insights. (Time: <4 weeks)
Step 3: Take Actions to Improve Against Baseline Metrics
We believe most executives are smart enough to figure out what to do if they have the baseline data and analytics. For each prioritized go-to-market change, create a clear set of performance metrics – current state and desired target – and commission teams to design and execute operating plans. Align the organization towards an agile mindset – the more all teams expect change and adjustments, the more responsive your company will be to market disruption. (Time: Quarterly targets, weekly measurement).
Sample Go-to-Market Checklist
These fifteen items will be different for each company – revenue leaders should develop their own “checklists.” However, based on our experience, here is a suggested list of functions leaders across Marketing, Sales, and Customer Experience must address
CMOs and Product Marketers will be asked by their CEOs, CFOs and Boards to adjust their strategies to the “new buying behavior.” Here are five Marketing areas to consider:
- Customer Research & Analytics
Many previous customer research findings may become obsolete. Companies must track buyer behavior changes not just through external primary research but also by monitoring internal behavioral “signal” from websites, CRM, and product usage systems. When behaviors change rapidly, it is critical to shorten the scope of any single research effort and broaden the coverage of insights. In simple terms, think of quick-hit insights driving fast incremental changes vs. massive studies and sweeping reorgs.
- Messaging & Content
As customers increase usage of virtual channels (website, 3rd party content, etc.) to research pre-purchase, product messaging will need to be tightened and enriched. Standing out from the rest to avoid commoditization requires compelling messaging differentiation. For most industries, this will force a more outside-in focus on business outcomes and experiences vs. the more inside-out view of product features and functionality.
- Product/Price Simplification
Over the past 20 years, we have seen several “channel shifts” from field sales to inside sales to e-commerce. Too often, the most overlooked key to success in virtual channels is the simplification of product feature bundles, pricing, purchase terms and conditions. In the new economy, relentless focus is needed to reduce purchase friction in these channels.
- Marketing Mix
Clearly, the traditional face-to-face conference or industry event will take a huge hit. As companies shift more budget to social media, direct marketing, and virtual events, companies must build analytic models to understand what the new optimal marketing mix should be. This will require a combination of ‘science’ on historical investments, ‘art’ from intuition about the future, and agile insights-driven adjustments based on rapidly changing buying behaviors. Too much reliance on historicals will dilute responsiveness to buyer behavior changes.
- Lead-to-Opportunity Management
Traditionally, lead management has been a volume game with a discrete endpoint; generate as many leads as possible, segment and score them, and route them off to a sales channel. New buying behavior will require companies to break hard definitional barriers between leads and opportunities by A) doing more digital lead management and nurturing, and B) enabling their sales channels to effectively “virtually engage” prospects earlier in the funnel with a new set of tools and content (see Sales below).
Sales leaders’ multichannel coverage challenge is getting more complex. Surprisingly, the traditional migration to lower-cost inside sales centers and online channels may, in some buying situations, actually reverse course. Already we are seeing younger, millennial sales reps quickly adopt new virtual technologies (mobile, video conferencing, at-home offices) that could actually revitalize the future of the traditional sales rep. Sales leaders should consider these issues:
- The 4 C’s of Sales: Coverage, Crediting, Quota, Compensation
Multichannel coverage (e.g. field sales, inside sales, partners, e-commerce) will only get more complex. As customers demand multiple touchpoints, companies must rethink their channel coverage models and resource deployment. Multiple channels covering the same customers requires double and triple crediting. “Stacked crediting” requires significant changes in quotas. Focusing on the value at the “point of persuasion” for compensation purposes has never been more critical; value creation may increasingly shift from sales process management to relationship development and deep solution/market expertise.
- Field Sales Structure and Enablement
Sales reps will be asked to conduct more sales meetings through virtual conferencing, etc. In addition, in a virtual environment, industry expertise will become more important than geographic proximity. Keep a close watch on whether geographic organization is the right sales construct in your industry going forward. Many companies are redesigning “territories” around customer segments, internal expertise, and furthermore, experimenting with dynamic lead routing to reps and channels with the best expertise and capacity for each unique prospect.
- Inside Sales Call Centers
Social distancing may accelerate the option for inside sales reps to work remotely. Technology once only accessible in large call centers can now be easily accessed through cloud-based apps. Will large call centers be downsized? Will the distinction between inside sales and field sales be reduced as both become remote and cloud-enabled?
- Partner Programs
For many companies, well over 70% of revenues are realized through 3rd party partner channels. Companies must not only rethink their traditional partner channel enablement with new virtual tools and content (see above) but also the usage of customer behavior and targeting data to drive performance. Add to that an entirely new set of online partner channels beginning with Amazon (consumer and B2B) and comparable digital marketplaces and distributors making the importance of data-driven channel sales plays ever more critical.
- Online Engagement
The “virtual buyer” is looking for far more than just a static website or an online catalog for order entry. Increasingly, we have used the term “platform-as-a-channel” to describe a broader set of capabilities where a digital platform offers content, “what-if” tools, 3rd party data feeds, etc. Increasingly, companies need to make their website or e-commerce engines include applications that help buyers make better purchase decisions.
CUSTOMER EXPERIENCE (CX)
Digital CX transformation is critical. For most companies, greater than 80% of annual revenues are renewal/repurchases from existing customers. Investments in back-office transformations for internal efficiency must increasingly be weighed against CX investments across the customer lifecycle. “Virtual buyers” increasingly expect frictionless online experiences to access product info, place orders, install products, train staff, drive usage, and resolve issues, and at the same time, they are expecting frictionless human interventions when necessary. These statements are true both pre- and post-purchase. But as we learned from the delays in getting testing data for the CORONA virus:
You can’t manage what you can’t measure.
Traditional CX brand experience metrics such as NPS (Net Promoter Score) measure advanced awareness but are intangible to frontline workers. Research suggests customers evaluate CX on three events: a) delays, b) failures, and c) “moments-of-delight.” Here are five areas where companies should consider building deeper CX measurement and management focus:
- Information Access
On most company websites access to product information, case studies, peer testimonials, etc. is difficult. The virtual buyer – trained by experience at Amazon and other leading e-commerce platforms – expects to be able to access personally relevant information without contacting a call center or sales rep. How many clicks and how much time does it take customers to get the info they need? Can a separate customer portal streamline information access?
- Install, Onboard, Train
Nothing kills the excitement of buying a new product than seeing it “sit on the shelf” for a few months. Even worse, nothing is more frustrating than buying, say, a software platform, only to need armies of consultants to get it up and running over 18 months. How fast can your buyers put your product into productive use to solve a burning challenge? As budgets continue to shift from CAPEX to OPEX models and competitive encroachment increases, long time-to-value will drive switching behavior at exponential frequency.
- Promoting Usage Frequency
Customer success goes beyond easy install and low error rates. Companies that gain market share typically do so by increasing a) the number of product users, and b) product usage rates. Measuring, setting targets, and managing user volume and usage frequency provides a direct window into product value and flaws.
- Problem Resolution
Everyone knows that customer problem resolution is critical to CX. But too often the focus is just on solving each individual problem vs. measuring and monitoring all of your customer’s problems in order to gain insight and take action on product and process improvements. Creating specific metrics and tracking resolution cycle times, failure rates, and codifying “moments of delight” is essential in a time where customers will undoubtedly re-evaluate their vendor set.
- Retention & Cross-sell
The ultimate measure of CX is whether the customer buys the product again and gives you permission to sell other products. From a measurement perspective, renewal “signals” and cross-sell opportunities can actually be flagged months ahead of actual customer purchase cycles. Rather than just tracking retention and cross-sell rates, companies need to use CX metrics to actually predict, prepare, and act on defection risks and share-of-wallet expansion opportunities.
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