Is cost reduction your company’s approach to value creation? If yes, this article does not address your strategy.
This article is not about cost takeout, cutting your way to growth, or headcount reductions. If you have worked with a company seeking value creation via cost reduction, you understand the approach.
Recently Acme Co. was purchased by a private equity firm. Upon deal closure, the standard playbook was run to attack sales compensation, cross-selling, and customer churn. Unfortunately, this time it didn’t work. Acme needed something different to capture the growth potential of their market.
Growth-oriented companies create value differently and define value simply as profitable revenue growth. SBI has worked with hundreds of growth minded companies. Today, we will explore the three levers to create immediate value. Only the most mature sales organizations have the discipline to pull these levers and execute these changes.
To set context, Immediate value creation requires your organization to increase across three measurable areas: client focus, average sales price (ASP), and market coverage. A limited number of options exist that increase all three of these measures.
The top three levers to create immediate value are:
- Reduce Accounts: It’s counter-intuitive for sales personnel to focus on fewer accounts. A bigger pond to fish in is a long-standing behavior of sales personnel hedging their outcome. In contrast, top sellers and top performing organizations define the Ideal Customer Profile (ICP) and stay focused on those clients. This enables those sellers and organizations to maximize their share of wallet and move from vendor to partner within the most lucrative customers.
- Auto Attach – Too often, sales personnel do not present an inclusive deal to customers. Whether implementation services, maintenance, adjacent or enhanced products, sales personnel follow the path of least resistance to close the deal. All proposals should include add-ons. Don’t miss the opportunity to put the entire solution in front of customers during the initial proposal. If declined, customers will have an increased appreciation for the potential of your product. If accepted, your company will realize the immediate value of increased average sales.
- Outsource Sales – Sales is core to your company and cannot be outsourced. Sound familiar? Aspects of sales can be outsourced. Top performing organizations have optimized routes to market with the appropriate selling motion. Inside sales and channel sales are the two most common forms of outsourcing. Inside sales, the commonly outsourced function, is outsourced to generate leads, execute campaigns, and support field sales. Top performing organizations have full-scale quota carrying inside sales personnel outsourced to market leading providers. Channel sales, are a pay for performance model. Enabling partners in a traditional 2- tier channel (Distributor / VAR) or alliance partner structure increase your feet on the street and maximize the number of opportunities in your pipeline.
There are times when cost-takeout is the answer. Other times, it requires a counterintuitive approach to create immediate value. As you develop your strategy, challenge the playbook and unlock value by pulling the growth levers.
To leverage SBI’s comprehensive guide of best practices, refer to SBI’s How to Make Your Number in 2018 . Creating value through growth requires a thoughtful sales strategy. To test the effectiveness of your sales strategy, answer the questions on page 342 of the workbook.
If you would like to participate in a custom workshop focused on create value immediately through revenue growth, bring your team to engage with a hand-picked team of experts in Dallas at , SBI’s executive briefing center.