2022: THE MAKE-OR-BREAK YEAR
The #1 Go-to-Market Imperative
for Each Revenue Leader
Over the last two years, enterprise businesses altered their go-to-market strategy amid new selling and distribution environments and supply constraints. They’ve adjusted to massively shifted buying behaviors and transferred marketing budgets away from the tried and true into new, unproven channels. As organizations look ahead, the reality is that commercial models will not find a steady-state – the only consistency in the future will be change.
Organizations seeking to capture future revenue growth will need to set go-to-market strategy foundations that can adjust with agility as changes occur. We believe 2022 is the ‘make or break’ year for many organizations to establish these foundational agility points and ensure long-run competitiveness and growth.
So, instead of jumping on the ‘key trends’ prognostication bandwagon, we distilled this year’s outlook blog down to the single most critical imperative for each revenue leader. Said another way, if you are sitting in the CEO’s seat, what #1 critical initiative would you expect your CMO, CRO, and CXO to deliver in 2022 (aside from the goals!), and what activities/tactics would we expect to see? Combining a single area of go-to-market strategic focus with tactical ‘go-do’s,’ we provide the foundation to get rolling.
THE CMO IMPERATIVE
Recommit to Brand Development (and Measure it!)
Over the course of the last quarter-century, with the rise of the internet and sophisticated data engineering, the number of companies that can/have established direct connections with customers or prospects increased dramatically. Not surprisingly, we’ve seen significant growth in digital and direct, often at the expense of more traditional, broad reach channels. Direct and digital channels seem to be the best option for meeting short-term performance demands; effectively targeting specific customers and messages, and an easier measurement of return on marketing investment. every industry or category has a different baseline of ‘optimal’ mix between direct and digital, only a select few categories, mostly consumer-focused like CPG and personal care, have found the right mix incorporating upper funnel brand.
“Many companies are seeing declines in marketing performance coinciding with declines in brand health.”
Yet, the race to digital, direct, and other easily measured channels has resulted in a bit of a ‘race to the bottom’. The landscapes are increasingly crowded. We constantly hear that quality inventory is hard to find or that customers/prospects are bombarded with solicitations they simply ignore. Perhaps most importantly, many companies are seeing declines in marketing performance coinciding with declines in brand health.
When marketers look back, 2021 will probably go down as the year of the ‘great reset’ for the profession. Examples abound across industries:
- A consumer electronics and technology company made the decision to push more marketing and more sales to its web channel (from retail), and shifted away from broad reach marketing. Two years later they are seeing decreased effectiveness of performance marketing and slipping brand consideration.
- A global leader in the business productivity software space saw a declining performance of marketing paralleled by a flood of competitive entrants. Not to mention, the overall commoditization of messaging around the similar product-feature value propositions.
- A health insurance company saw a dramatic decline in direct marketing productivity during AEP (Annual Election Period), even while overall spending increased due to an increasingly crowded marketing landscape.
For CMOs that want to get ahead or counteract these trends, they must lift their brand above the fray. Recommitting to driving share-of-voice in market with emotionally engaging and inspiring brand messages will break through the crowd. At the same time, fighting commoditization and providing a foundation for more successful mid-funnel demand creation through time. Yet, these kinds of shifts can not be based purely on gut (as often have in past) and must be measured and optimized through test and learn approaches.
Tactics for CMOs looking to elevate brand in their go-to-market strategy:
- Audit and Consolidate Your Marketing Data — Garbage in garbage out; for successful marketing measurement in a multi-channel context, you must be able to identify and access a holistic set of stimulus and response measures through time. More often than not, the data is ‘all there’, but requires significant process improvement and establishing consistent data pipes and data munging processes. Additionally, ensure you have measures that track ‘intermediate’ performance metrics, like brand awareness, consideration, or WOM. Aggregating all stimulus, brand health and desired response/impact metrics (clicks, sales, leads, etc.) in a single source of truth with a consistent taxonomy and set of time dimensions is the starting point.
- Develop Reproducible Attribution Models — Leveraging historical stimulus and response, develop initial models that address key elements of attribution, response curves, stimulus impact lags, and market context to establish the foundational multi-channel attribution model and context for optimizing marketing and testing new strategies. Ensure all models are verifiable and reproducible from source data; a black box model provides little long-term foundation for ongoing marketing optimization.
- Test and Learn with Appropriate Scale — As you design test approaches to prove the efficacy of shifting dollars towards upper funnel investments, you must scale your spending to the context of the test. Brand investments often have “S-curve” response shapes where initial dollars have limited impact and then steep returns occur after a critical threshold. If testing at a national level, ensure enough weight is deployed in the test, otherwise you won’t have the opportunity to get an effective read. Alternatives that can limit the required investment for a test and learn approach may include match market testing or tracking of more qualitative campaign responses through tools like digital listening.
THE CRO IMPERATIVE
Develop a Dynamic Revenue Coverage Engine
Revenue growth opportunities are increasingly fleeting. The time between the opening of new markets and their saturation is decreasing exponentially. Competitive disruption more often comes from out of category than within. When combined with the reality that customer behaviors and preferences are changing ever more rapidly, you create an environment where our routes-to-market must be easily adaptable.
Herein lies the problem, sales and distribution infrastructure is inherently rigid (certainly relative to the ability of marketing to change messaging and activation tactics). Sales channels must be identified and established with sufficient capacity, sales resources must be hired and trained, and multi-channel/multi-role models must be managed to avoid conflict.
While it may not be possible to fully eliminate this rigidity, emerging principles are coming forward that enable more flexibility and adaptability. Luckily, the foundation for effectively choosing, building, and enabling routes-to-market remains largely unchanged, but CROs that layer in new elements can be more fluid and responsive to market opportunity.
Tactics for CROs looking to build agile, responsive coverage models:
- Create Plays out of Long-Tail Data Points — Sales and distribution are the connection tissue to customers and the market. To drive scale and consistency, many execute codified plays that are repeatable and proven to drive results. But, in rapidly changing markets with fleeting opportunities, future plays must be codified before they are fully proven. To consistently be ahead of the game, use your frontline teams to identify key use cases and sales narratives that might signal a paradigm shift. For example, a seller may indirectly identify an opportunity with a new buyer set that represents a huge expansion of potential (e.g. selling agile project management tools to marketing or sales teams when the historical buying set has always been engineering teams). Keeping a pulse on deals that progress outside the current focus plays, provides a first read on where new revenue growth opportunities exist.
- Drive Omni-Channel Collaboration and Crediting — Effective role design and coverage start with segmentation to identify logical breakpoints and complexity of the sale. Fundamentally, different motions are required to scale revenue growth in different customer segments. Historically though, this led to a lot of siloed teams and ‘hard decks’ seeking to avoid channel and role conflict. These siloes decrease collaboration, and often inhibit customers from realizing the value they desire (remember, “customers choose channels, channels don’t choose customers”). While each segment needs separate strategies, think of coverage as more ‘omni’ channel rather than discrete to drive collaboration and support 1+1=3. For example, many large enterprises desire to have purchase paths both online and with a senior salesperson depending on context; provide both of these for the different purchase types and create a crediting paradigm where a seller is encouraged to support the lower-cost channels. Essentially, focus on how to encourage shift and lift within segments and not just across segments.
- Deploy Dynamic Territories — Translating coverage and capacity to territory design and deployment feel most logical when the ‘pie’ is deliberately allocated to sales resources. Yet, the logic behind geography to pie cutting is withering away (i.e. ‘proximity’ is increasingly less important). Additionally, the reality that the typical enterprise sales territory in any given year is almost always half ‘touched’ by a seller and half full of accounts with 0 likelihood to buy in any given year leads to poor allocation of time and resources. One technology company recently highlighted a manifestation of this issue when saying, “our East Coast team has consistently performed at about 60% of other territories.” By consistently cutting the pie where they thought was ‘equal’ (territory-based) they weren’t following the realities of demand and driving poor allocation of resources. Increasingly, companies are beginning to deploy dynamism in their territories. One technology client we work with is beginning to deploy a system where enterprise sellers have a certain ‘base’ territory defined of existing relationships and opportunities and then are distributed new accounts and opportunities as market and account signals dictate. This ensures that demand drives capacity and that sellers have equal opportunities.
- Enable Data-Driven Motions — Enablement is no longer simply about training and providing collateral. The new mandate is to ensure data signal is translated to direct and indirect (partners, distributors, etc.) channels to set specific motions in play with the right customers/prospects at the right time. Data-driven plays, from cross-sell propensity models, new logo account scoring, buyer engagement recommendations, and everything in between, ensure productivity growth of sales forces. Without them, your competition will slowly appear to be running a different race. Think of it this way, while half of the digital sales trend is about channels, half is about the data to enable those channels.
THE CXO IMPERATIVE
Measure (and Diagnose) the Full Customer Experience
As go-to-market organizations grow, their size, scope and structure often create an inside orientation to business innovation and strategy. Year over year strategies become more about how to reshuffle the deck across increasingly siloed functions, capabilities, and processes, and less about customer and market needs. The increasing proliferation of the Chief Customer Experience Officer (i.e. CXO) is based on the realization the customer is at the center of all strategic decisions. Whether your organization is deploying this as a specific role or embedded in another function (typically sales or marketing) matters little. There must be a mechanism that ensures an outside, customer-centric perspective.
Maintaining customer loyalty and advocacy is only getting harder amid competitive disruption and business models lowering barriers to switching. The bar is rising for CXOs to drive measurable impact, but all too often the function grasping to find a foothold. 2022 must be the year that the CXO function begins to orchestrate deliberate action across product, marketing, and sales/distribution.
Tactics for CXOs to measure and drive customer experience across the entire go-to-market:
- Ensure Solution Space Orientation — Every company competes in specific product markets, but all company’s products and services are also part of a broader solution space for customers (this is true for start-ups all the way to global enterprises). A myopic focus on the specific product-market or category inhibits a well-rounded understanding of what customers actually want and the potential substitutes and compliments that exist. To do this effectively, each year (re)articulate, and codify internally, the broader space (e.g. a health insurance company might state something around Health Outcomes as its solution space), and then deploy ongoing market research and long-tail insights development (e.g. digital listening) to keep a pulse on the bigger picture.
- Measure (and diagnose) the full Customer Experience — The single biggest failure we see on customer experience measurement is an overreliance on single, aggregate measures like Net Promoter Scores (NPS) or Customer Satisfaction Scores (CSAT). These can certainly be valuable, but fall flat in identifying the specific experience issues that need to be solved, and the specific mechanisms to solve them. Customer-centric agility requires a more intimate understanding of buyer needs and journeys and more deliberate and rapid measurement against each of these “moments of truth.” Architect a customer feedback measurement system that deploys always-on feedback loops against the multitude of key experience points, to ensure you can clearly identify execution gaps and prescribe specific tactical adjustments.
- Orchestrate Action — Measurement must lead to action. Optimizing the customer experience begins at identifying and diagnosing experience improvement areas, but must lead to action. As the CXO, develop consistent and collaborative connection points with Sales and Marketing to ensure action can be deployed in your customer-facing teams. The more prescriptively you link experience breakpoints to tactical actions, the greater foundation you provide for a truly customer-centric commercial culture to materialize.
Delivering on Go-to-Market Imperatives
For revenue leaders, 2022 must be the year to lay the foundation to ensure we can deliver on the ‘long-run’ growth imperatives of the business. Revenue organizations that build full-funnel marketing optimizing processes, agile routes-to-market, and measurement across the whole customer experience will set themselves up to respond to the everchanging market environments and capture fleeting opportunities for growth.