Back in 2011, CEB published research that indicated 57% of the buyer’s journey is completed before a sales person is actively involved. Today, this has become a well-known statistic. Even more so, the trend has accelerated and the number has recently grown to 69%. Today’s buyers rely less and less on the sales rep for information, and more and more on their own resources.
In order to address this trend, CEOs, sales, and marketing leaders need a solid strategy. Strategy is defined as doing the right things. Too often executive leaders confuse tactics for strategies. And worse, they often confuse tactical execution with strategic alignment. Strategic alignment begins with a clear understanding of the corporate objectives, followed by the grasp of the inter-dependencies between each of the various functional strategies. You must align corporate to product, product to marketing and marketing to sales in order to achieve strategic alignment. But unfortunately only 9% of companies have been able to achieve this alignment and hit their revenue growth goals consistently.
There are 3 key metrics that are impacted by strategic alignment:
- Probability of making your number.
- Customer acquisition cost.
- Customer lifetime value.
Companies in strategic alignment significantly outperform their peers. They are able to grow revenue faster than both their industry and their competition, and consistently make their number. They are also able to reduce their acquisition costs, which allows them to free up dollars and resources to spend elsewhere. And finally, the lifetime value of a customer is extended. They do not lose customers, and generate more profit which again allows them to re-allocate resources as needed to make their number.
As CEO, how do you ensure strategic alignment? And more importantly how do you identify any gaps that may exist? One key step is to identify where your organization lies on SBI’s Revenue Growth Maturity Model. There are 5 phases, which are defined as follows:
- Level 1 – Chaos. You have a corporate strategy, but no functional strategies exist. You are “shooting from the hip” and there is no harmony between functions.
- Level 2 – Defined. Both a corporate strategy and functional strategies exist. Though they exist, they are not executed upon, and instead gather dust on a shelf after the annual planning process.
- Level 3 – Implemented. Both corporate and functional strategies exist and are cascaded down throughout the organization. But unfortunately this is done is silos and they are still missing a key piece of the puzzle, strategic alignment.
- Level 4 – Managed. Corporate and functional strategies exist, and are aligned internally. If this is your organization, you are operating a high level; the top 15% of companies are at a level 4.
- Level 5 – Predictable. Corporate and functional strategies are defined, aligned, and implemented, both internally and with the external market.
As CEO, you must live in your strategy and arm your team with the tools necessary to make your revenue growth number. If you need more help, download our annual planning guide, How to Make Your Number in 2017. It will give you step by step instructions on how to make your number in a predictable, hassle-free way.