No matter the industry, there seems to be one consistent impetus of enterprise value: growing revenue and cash flow faster than competitors drives a positive impact on the fair market value of the business. However, achieving a superior rate of growth requires putting in place the right talent, culture, and tools for your sales and marketing department.
As is always the case, human talent is paramount to success. It is hard to overstate the importance of recruiting the right professionals – perseverant and energetic, smart and independent, and most importantly, naturally aligned with the corporate culture and core behaviors. A company’s most valuable asset is its human talent. Talent recruitment and development should, therefore, be at the forefront of its strategic initiatives.
Regrettably, most companies do not spend enough quality time with prospective candidates before offering them a position. The assessment of cultural fit especially requires repeated interaction with a number of team members, placed in different situations and settings.
Great sales people have unwavering confidence in their ability to sell. They appreciate the opportunity to earn outsized compensation in exchange for truly stellar sales numbers, and consequently, should not require steep base levels of compensation. A compensation structure with a large success-based component will allow you to attract the right sales team, always hungry for the next customer win.
The success of the sales team should not only be measured in terms of new revenue but should also hinge on the profitability of the sale, the overall customer retention levels and the Net Promoter Score. Furthermore, the variable salary component should be easy to calculate, measure and track. For a new member of the sales team, it may be appropriate and fair to guarantee a floor in terms of variable compensation for the initial stages of his or her employment until he or she has been able to build a book of business.
3. Everybody is a sales person
There is an important cultural component to creating a company that excels in sales and marketing. It is the notion that every single associate is a representative and a sales person for the company. As we are all keenly aware, when a prospective customer interacts with the company, every facet of that interaction can make or break the deal. All associates should live and breathe the concept of customer centricity and embrace the notion that the customer is at the heart of the company’s right to existence.
In order for a sales team to excel, it requires quality support on a number of levels, including:
- Effective marketing strategies;
- A competitive value proposition;
- Innovative product or service design;
- Recurring sales training;
- Accurate daily reporting tools on the most relevant KPIs (key performance indicators).
Additionally, executives play an important supporting role in customer acquisition and retention. In most sales driven organizations, executives regularly accompany the sales force on its visits to prospective and existing customers. These executives participate to assist in closing the sale or to listen firsthand to the concerns and requirements of the customers with a hard commitment to address these issues expeditiously.
It is a proven best practice to assign a number of key accounts to each executive, even if they are not directly related to sales. In this model, the IT leader, the Chief Legal Officer and any other executive would be a lead account manager for a number of key accounts – creating greater connection and line of sight between the executive and sales teams. And naturally the most important business development role is reserved for the CEO, who should spend a significant part of his or her time on sales and account management.
5. Sales playbook
The sales playbook is the translation of the overall sales and marketing strategy, tailored for the individual sales person. It is a prescriptive set of processes and procedures that guide the sales person in his or her daily task of convincing new customers and retaining existing ones, all while preserving or enhancing the contribution margin of the sale. The sales playbook describes the relevant KPIs, the performance against those KPIs, the required numbers of interactions per unit of time with prospective customers, the proportionate time to be spent on customer retention, how to protect gross margin, what the return requirements are on a sale, and many other factors and processes. The sales playbook is an accountability tool that guarantees a consistent approach to business development across the organization and that rolls up to the strategic business development plan of the enterprise.
6. Pipeline measurement
The key to any mature business is forward visibility into revenue and cash flow. A crucial component of that forward visibility is a reliable perspective on new sales, customer churn and gross margin differences. To that effect, it is recommended that the sales and marketing group, assisted by the financial planning and analysis team, devote the right amount of time and resources on developing a probability-weighted new business pipeline, that analytically maps the quantum and probability of future sales. The process of arriving at a high-quality pipeline is likely an iterative process, where the post-factum determination of the accuracy of prior predictions continually feeds into further optimizing the quality of the new business pipeline.