15 operational levers for value maximization in sales & marketing

09 October 2018 Consulting.us 7 min. read
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In the case of large M&A or large-scale organic investments, the pursuit of growth is the number one focus of executives and investors. However, in many cases value potential is left unrealised, with the growth initiatives invested in not delivering results. This typically comes down to the operational execution of the marketing and sales functions, says Kevin Kennedy, a Partner and Senior Managing Director at management consultancy Blue Ridge Partners.

Marketing and sales functions are at the heart of value maximization and growth pursuits. When integrating or investing into the commercial functions, making the right operational decisions and effective execution of plans are key to achieving the desired growth outcomes, explains Kennedy. Based on decades of experience in the field, the former CEO of Avaya and previously a leader at several prominent technology and telecommunications companies, has crafted a list of 15 key sales operations choice points that he contests can make or break value creation. “These 15 moments of operational decision are the ones with very high potential returns – but that routinely lead to underperformance of expectations and, ultimately, to disappointing growth,” he explained.15 operational levers for value maximization in sales & marketing

  1. Sales force M&A integration
    Should leaders integrate a new acquisition for efficiency or keep it standalone to minimize disruption to growth?
  2. Channel expansion
    What’s the right balance of direct versus indirect channels? Reach versus control? Direct versus indirect economics? What’s the right way to segment markets and customers?
  3. Customer alignment systems
    How does the company listen to customers and who is involved?
  4. Innovation
    How is innovation aligned with customer needs? How does sales measure whether innovation is recognized by customers and building brand loyalty? Is Net Promoter Score measured to monitor the impact of innovation or simply for operational improvement?
  5. Tuning the go-to-market model
    Is every organization in the partner base optimally serving the needs of the company and its customers? Are they meeting growth goals, sell-new goals, maintaining high renewal rates, and delivering on other value-based metrics?
  6. Investment in sales
    What’s the right balance of investment between productivity and growth? Should executives grow as they first improve productivity or take an operating margin hit by building sales capacity and hoping the business follows?
  7. Managing complexity and specialization
    Should an overlay sales team be employed? What’s the right timing and approach? How are the tensions that exist between overlay and mainstream sales teams managed?
  8. Pricing transitions
    Pricing changes trigger conflicts around optimizing product versus service, adoption of new versus protection of current generation, direct versus indirect channel approach, the pricing model (one-time, recurring or subscription) and much more. Decisions at this choice point affect growth, the business model, customer satisfaction, and sales channel adoption.
  9. Sales leadership accountabilities
    As a company grows in size and complexity, sales leadership roles will evolve, demanding different skills over time to move a company in the right direction. When is the right time to shift those roles and the people in them?
  10. Account control: balancing relationships, change and growth
    Sales managers want control of their accounts, but this reflexive reality creates a bias toward focusing on fewer customers more deeply and toward a resistance to change. How is the pursuit of control balanced with the need for change? How is it ensured that the customer is not suffocated by an account team?
  11. Resource allocation and market alignment
    There is a natural bias to service customers that are already spending in the customer segments that are already known. How are these customers maintained while growing new customers and customer segments? How are resources allocated to balance the need for growth with the natural desire to focus on the familiar?
  12. Product and service offering growth
    New customer reach often starts with an initial product but sustained growth requires more users and more dollars per user. How is the positioning of initial product sales balanced with recurring upselling and service?
  13. Internal competition: local/global
    In large global companies, who decides what is best for each customer? Do local account teams have the autonomy to serve local client organizations? What decision rights exist locally versus globally? How are local account manager compensation norms influenced? When do global offers conflict with the local status quo business and how is this managed?
  14. Margin versus growth
    As companies become top in their space and growth slows, there is tension around protecting margin. Should lower-end business be avoided? Avoid channel partners? Avoid specific market segments or countries? How is sales compensation crafted to drive sellers to the right deals?
  15. Scaling and managing talent and systems
    As a young tech company begins to grow its sales force, its product portfolio, and its customer segments, managing the necessary growth in talent, skills and systems becomes increasingly complex. How does a sales leader transition from being a great seller to a great leader with an understanding of the process and systems required to purge non-performance and nurture the strength of a sales force? Each transition is a major choice point.

Approaching the 15 levers

“While the sales operations choice points offer just a high-look and just a few of the conflicts inherent in the decisions that must be made, they are essentially 15 forks in the road that, if executed correctly, can lead to significant growth outcomes. They offer considerable leverage in aligning the investments in strategic intent with the intensely sought-after business case,” says Kennedy.

When approaching these 15 levers, the Managing Director at Blue Ridge Partners highlights that executives must seek alignment on four levels. “The first level of alignment is around a common view of intent. For instance, if a company plans to transition from a direct sales force to a model that employs both a direct and indirect (channel) model, do executives, head of sales and the regional sales leads have a shared view of the what, who, why, and how to deal with conflict?.”

The second level of alignment he says comes from ensuring that the stakeholders have an understanding of the best practices to guide a transition. “Is it clear what good looks like? Is there a tangible model to replicate? Does the implementation plan comprehend a new and appropriate organizational structure that will bias success? Since complexity is being added, have the details been worked out ahead of time?”

The third and fourth alignment points are addressing the people that are resisting change through a series of change management interventions, and putting a governance system in place that forecasts and measures outcomes and enables evaluation, iteration and immediate realignment. However, “this can only be done in circumstances where the first three levels of alignment have been thoughtfully considered. This system must measure the performance of individuals or individual teams on a daily basis, allowing success to be held up as a model for others – and deviation from expectations to be nurtured for improvement.”