Leaders in every industry are defining a new strategy and plotting a path forward as FY21 planning begins. SBI recently surveyed 54 CEOs to understand how their FY20 revenue growth projections and sales and marketing spend have been impacted. Read on to determine how you can leverage this to inform your sales transformation and FY21 plans.

Great leaders know how to navigate these choppy waters, but the economic uncertainty has created a new layer of challenges. While many are still struggling to survive, others feel that recovery is fully in place and are on the upswing. Regardless of which side you are on, this marks a critical inflection point—should you continue down the sales transformation path or hit the pause button (and what are your competitors and peers doing)?

 

Which Plays Have You Run?

 

In the current economic environment, leaders continue to play the difficult game of watching the bottom line to survive today, while investing in top-line growth for tomorrow.  The key is to strike the right balance and not over-rotate to one extreme.  The two extremes to watch out for are being overly defensive or overly aggressive.

 

  • Overly Defensive – Leaders who are too defensive and cut costs deep across the board will struggle to regain growth momentum 
  • Overly aggressive – leaders who are too aggressive and pursue all growth opportunities may lose focus and run the risk of being exposed if the economic situation changes.

     

Market leaders ensure they avoid these extremes and work to execute their key “big-bets.”  Recent market changes have leaders questioning if they should continue down the path or even increase investment while identifying operational efficiencies that will not stunt future growth.  Their defensive plays are selective and specific (not cutting 10% across the board), and offensive moves are targeted and calculated.

 

How should a sales transformation be viewed?  A sales transformation should fall into the “big bet category.”  Some of this transformation may have started before March, and other parts of the transformation may be a result of COVID or could be part of FY21 planning.  Read more about adapting your sales coverage model for FY20 and beyond and learn how coverage is a critical dependency on your transformation.  SBI is seeing several areas continue to be the focus of market leaders.

 

  1. Investments that will enable the organization to respond to a rise in demand quicker.  Speed is more critical than ever.
  2. Investments aligned to customer needs
  3. Investments aimed at boosting sales rep productivity in a virtual world
  4. Investments in selling into select verticals and markets where COVID has helped those companies increase growth rates

     

Are Your Peers Continuing to Invest?

 

SBI recently completed a Go-to-Market investment survey with the goal of understanding how CEOs are shifting their sales and marketing spend and revenue growth targets for FY20.  Over 50 CEOs responded, and the results point to a need to continue down the sales transformation path to keep pace with market leaders.

 

% of Revenue spend on Sales and Marketing:

 

  • Entering FY20, these CEOs were planning to increase Sales and Marketing spend 6% on average
  • Following COVID, these same CEOs cut their anticipated spend 17%, netting their FY20 spend on sales and marketing 11% below FY19 levels.

     

FY20 Revenue Growth Targets:

 

  • Coming into FY20, the average projected YoY growth rate was 24% for the CEOs surveyed 
  • On average, these companies grew 19% in 2019
  • Following COVID, the average projected growth rate is 7%, a 17% cut in forecast

     

Revenue Growth rate compared to competitors:

 

  • 62% of the CEOs surveyed indicated their revenue growth rate is higher than their competitors

     

 

Net/net, these 50 CEOs are trying to grow, on average, 7% in FY20 with 11% less spend in sales and marketing (compared to FY19).  The interesting question is, how will this translate into FY21 planning – will sales and marketing spend return to pre-COVID levels, or will you be again asked to do more with less?

 

If the trend continues, leaders will be asked to deliver higher growth with the same or less spend on sales and marketing.  This points to the need to continue any sales transformation as a critical way to accelerated revenue growth.  Increasing efficiency on sales and marketing spend while delighting customers remains top of mind to close FY20 strong and lay the foundation for FY21.  Read more from SBI on how CEO’s are driving CX clarity amid the chaos.  Achieving FY21 goals will be the result of the groundwork put in place in FY20 plus increased efficiency and effectiveness with your sales and marketing spend.

 

As highlighted above, investments in 4 key areas will continue to pay dividends in the post-COVID environment and help continue down the sales transformation path.

 

  1. Investments that will enable the organization to respond to a rise in demand quicker.  Speed is more critical than ever.
  2. Investments aligned to customer needs
  3. Investments aimed at boosting sales rep productivity in a virtual world
  4. Investments in selling into select verticals and markets where COVID has helped those companies increase growth rates

     

We encourage you to join the community, engage with your peers, and share leading practices in SBI’s LinkedIn Group, “Inspire Others,” as we navigate these challenges together.

 

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ABOUT THE AUTHOR

Andy Hastings

Leverages expertise in operations, sales and marketing to implement new strategies that help clients make their number

Prior to SBI, Andy spent 8+ years at Constant Contact in a hyper growth SaaS environment. He brings significant expertise in direct sales, channel sales, marketing, operations and project management. Most notably, he delivered results on projects that included sales and marketing strategy, CRM design and implementation and sales productivity / enablement. Known as a problem solver who can quickly diagnose sales and marketing gaps, develop a strategy and lead cross functional teams during implementation resulting in organizations making their number.

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