How We Help Clients
Growing revenue faster than competitors and the market is always challenging – now more than ever. Market disruption has accelerated, introduced new challenges, and introduced opportunities as well. The recession is raising – and will continue to raise – the stakes for every company. And it will increase the distance between market leaders and laggards.
SBI is a consulting firm focused exclusively on revenue growth, both developing the optimal revenue growth strategy and driving its effective execution. Blending these seamlessly has never been more critical. In 2021, for most companies, resources will be constrained and near flawless execution of the “core” business will be required to seize opportunities, to fund innovation, and to expand. The stakes have never been higher.
To grow faster than competitors and the market, companies must take three key actions. Simple to say. Hard to do.
- Develop and commit to the optimal revenue growth strategy
- Effectively allocate resources to support the revenue growth strategy
- Flawlessly execute the revenue growth strategy
Companies must seamlessly blend strategy and execution to drive revenue growth and thus enterprise value. SBI’s team of Revenue Growth experts are committed to helping clients make the number.
Develop & Commit to the Optimal Revenue Growth Strategy
Pace, complexity, and disruption, have all accelerated – in 2021, how to make the right strategic revenue growth decisions will feel overwhelming. We help clients navigate these challenges by distilling revenue growth strategy to three approaches.
Determine the Optimal Strategy
- Market Share Gain – Based on experience through past recessionary events, our recent work with clients, our decade of benchmarking, and whether a given market is contracting or expanding, competing for a larger portion of the existing market is the #1 strategy many companies will deploy to achieve their 2021 growth targets. If companies do not adopt this strategy, then they must certainly defend against it.
- Market Growth – In the past, some companies were able to grow revenue by “riding the wave” of favorable economic conditions and their industry’s growth. Post-pandemic, this option has been severely reduced and will remain available only to companies who compete in industries enjoying post-pandemic growth.
- New Market Entry – With existing markets in a state of uncertainty, volatility, and often decline, companies will look to drive growth by selling their existing offerings into new markets, new geographies, and to new buyers.
All three strategies are supported via multiple paths. For example, market share gain can be pursued via new logos, cross-sell, up-sell, or pricing tactics. Selecting the right strategies, the right supporting paths, and effectively allocating resources requires a structured decision-making process. Leading companies – those consistently hitting their number and growing faster than their competitors – leverage their data, analytics, and market insights to inform their decision making. They leverage a common decision-making framework across the leadership team. Typical attributes such as complexity, level of effort, and time to value inform decision-making.
However, leading companies do something unique: they stand up a Revenue Growth Office (RGO) that develops, measures, and monitors leading indicators to ensure that revenue growth will be achieved. The RGO enables the executive team to monitor the execution of the strategy, to make dynamic adjustments to the execution plan, or to shift the strategy, if necessary.
Effectively Allocate Resources to Support the Revenue Growth Strategy
Revenue growth strategy always involves the allocation of a finite amount of resources: people, money, and time to name a few. Revenue leaders have increasingly been asked to produce more with less and we project this dynamic to be even more severe in 2021. Market leading companies do not make allocation decisions in a vacuum. Leading companies take an outside-in view and base their allocation decisions on the external market.
External Market. Identifying the right market(s) is critical. A given market’s level of growth, amount of disruption, entry/exit of competitors, segment-specific dynamics, space to innovate, etc. must all be considered. Yes, some industries such as airlines have been hit hard by the pandemic. However, SBI encourages clients to evaluate markets across a broad range of attributes, particularly as competitors re-allocate their own resources. One competitor’s exit can be another company’s gain.
Customers & Prospects. After the right markets have been targeted, companies must dig deeper to understand which customers and prospects provide the best opportunities for growth. Historical revenue from these accounts is, of course, a factor, but market leaders also consider a customer’s and prospect’s whitespace, willingness to buy, and their company’s own ability to win. SBI consistently observes companies deploying some version of customer segmentation. Alas, the segmentation is often rudimentary and one-dimensional. We help clients execute and action a variety of segmentation models – the end-result is a 360-degree view of customers and prospects with company resources appropriately allocated and growth opportunities effectively pursued.
Buyers. Resource allocation must also be informed by how the individuals within customers and prospects buy. This requires a deep understanding of customer decision-makers, those who hold the budgets, influencers, users, etc. Understanding these buyer personas individually is important. However, market leaders do something special: they understand how the interplay between these personas plays out over time. For example, due to the pandemic-induced recessionary environment and the liquidity constraints experienced by many companies, many revenue growth decisions are now made or more heavily influenced by the CFO. SBI is also increasingly asked to work directly with CEOs and Boards of Directors as “invest to grow” decisions are more closely scrutinized.
How to Execute the Strategy
Execution is challenging in all times, but in 2021 it will be harder than ever. Sub-par execution will destroy a sound strategy and deprive a company of the needed fuel for growth. Effective execution of the strategy is key. Based on SBI’s work with market leaders and when we help companies become market leaders, the execution process must exhibit:
- Enterprise Value and ROI focus – in 2021, market leaders will be relentlessly focused on defining enterprise value and increasing ROI.
- Revenue Growth Office (RGO) – A mechanism that drives function and cross functional accountability via measurement, monitoring, and prediction of future revenue.
- Dynamic Revenue Planning – Continuously adapt the strategy in an agile manner to changes in industry dynamics.
Driving Growth Via a Revenue Growth Office
Optimizing Go-To-Market functions in 2021 will be a significant undertaking. Companies that deploy an RGO have a higher likelihood of success. An RGO brings together the leadership team and ensures that all key workstreams are aligned throughout the transformation. RGOs drive visibility to the executive team so that adjustments to the strategy and to execution can be completed in real time. By driving metrics and targets, the RGO can demonstrate value of the transformation and maintain much-needed momentum. A Revenue Growth Office is a dedicated team focused on optimizing go-to-market for revenue growth. An RGO can identify the most impactful strategies and initiatives and drive cross-functional interlock to accelerate revenue growth. The RGO provides visibility across the business via select, critical KPIs (the Metrics that Matter). As a result, the RGO rapidly drives change by maintaining accountability of individual workstreams and demonstrates impact on performance.
Get the Right People in the Right Roles Right Now
It is imperative to have the right people to execute on the strategy. Despite many years’ experience hiring people, many companies still take a haphazard approach to hiring, developing, and enabling their people. Modern strategies need A-player leaders, with knowledge of emerging best practices to execute these strategies.
Ultimately, the strategy must be executed by the individual contributors who are responsible for specific customers, prospects, partners, or relationships. Ensuring that a company has the right people, in the right roles, is vital to successful execution. Leading companies thoughtfully manage the end-to-end sales talent lifecycle: defining the right roles, recruiting, hiring, onboarding, training, coaching, and when necessary off-boarding. Leading companies have role-specific, data-based profiles of high-performance. Their talent management processes are not reactionary.
Relentless Focus on ROI
There are two ways to generate Return on Investment. This is done by either improving efficiency or effectiveness:
1. Improve Revenue Growth Efficiency
In 2021, many companies will, rightly, focus on increasing commercial efficiency. This can be done by maintaining their growth rates while reducing their investments in Sales & Marketing or by increasing their growth rates while maintaining the same Sales & Marketing spend. In either scenario, success will be measured by reducing Sales & Marketing expense as a percentage of revenue. As the market continues to evolve dynamically, market leaders will consider the allocation between sales and marketing, bases on how demand drivers are impacting their customers.
2. Improve Revenue Growth Effectiveness
2021 will also present opportunities. Companies that recognize opportunities to pursue and have strong liquidity positions will focus on improving revenue growth effectiveness. These companies will look for the most effective way to cover markets, which may include adding new go-to-market channels. These companies may also leverage their positions of strength to enter new markets, such as new geographies and/or verticals. Many of these strategies will be measured by increased bookings per Quota Bearing Sales Rep (QBSR).
Improve Profit Margins
Buyer preferences are always changing, but we have experienced more change in the last 5 months than the previous 5 years. As a result, market-leading companies are evaluating the pricing & packaging of their offerings, to maximize value, and to reduce friction for buyers.
With significant shifts in demand drivers, the static pricing packages of the past will not be enough for companies to succeed. Creating a dynamic pricing strategy can help companies overcome headwinds and leverage tailwinds (where they exist) to maximize revenue and EBITDA.
Pricing, when done well, remains the single biggest driver of growth and profitability.
Pay the Team In Line With the Strategy
While many companies focus on sales compensation, the planning is often rushed and not fully aligned to the revenue growth strategy. As a result, many companies create compensation plans which drive sales-behavior counter to the strategy. Market-leading companies set the strategy first, and then create territories, quota, and compensation plans that reinforce the execution plan for those strategies. By aligning these, market-leading companies maximize retention of their best salespeople, and encourage the voluntary departure of those that are not delivering on the strategy.