Taking Advantage Of The New Sales Equation
People and companies have in the past developed a product so superior to the competition, winning in the market place was nearly certain. However, it never lasts.
In 1890 Karl Benz developed the first true internal combustion car, and because of a superior product he led the market for years, however success through superior engineering can only last so long.
Then over the next few decades, the competition caught up from an engineering perspective. Ultimately it was Henry Ford who truly changed the game by focusing on a better approach to business.
By building a product that was good enough to eliminate Benz’s inherent product advantage, Henry Ford succeeded through a stronger go-to-market (GTM), delivering:
- Scaled production
- Decreased time to delivery
- Lowered price-point
Although it is possible to build a better mousetrap, long term and sustained success requires a thoughtful and disciplined GTM approach.
Drive long-term revenue
As your product advantage diminishes, you can’t achieve the sales results you want if your sales force and partners are simply order takers.
You need a better GTM approach, specifically you need to improve your efficacy in 4 areas:
- Aligning and enabling direct sales
- Recruiting and managing your channel ecosystem
- Marketing and communicating your customer value
- Improving your operational efficiency
The first area to review is your direct sales motion. You can get a deeper understanding of overall sales force transformation here, but basically it comes down to 5 levers:
- Focusing your territory and market coverage
- Improving your disciplines and sales enablement
- Targeting compensation and incentives to desired behaviors
- Aligning the direct strategy with your channel approach
- Optimizing direct sales costs
Start with your territory and market sales coverage model since it foundational to improving the other 4 later on.
Improving your sales coverage model means splitting your objectives based on the individual market you are going after. If the market has a high total addressable market (TAM) and growth,, increase OPEX investments in order to increase your total revenue.
If the market is flat or shrinking and especially if the overall TAM is low, focus on lowering the cost per order dollar (CPOD) associated with getting that revenue.
When looking at your channel ecosystem, analyze how your partners view your business and what value they get from the exchange.
A better way to look at this exchange of value is across 3 areas:
Momentum is primarily about your market position and how easy it is for your partners to sell your portfolio. Driving improvements in your partner and customer marketing will help strengthen your Channel momentum.
Relationship is about how you work with your partners and how closely your business aligns with theirs. The easiest way to improve your channel relationships is through a methodical Partner management process and evaluation of how your incentive structure aligns with your partner’s businesses.
Economics is simply how much money your partners get through working with you. The key here is to make sure that being involved with your program itself cost prohibitive and there are opportunities for partners to monetize, such as through deployment or services.
There are 2 main pressures in today’s customer buying cycle, customers:
- Make their buying decisions faster
- Self-educate before talking to you
In the past, the salesman acted as a trusted adviser to potential customers, today people use the internet and social media to educate themselves and talk to communities of other buyers to make the bulk of the buying decision.
This means that you need a presence in these social selling communities, otherwise you risk being a victim of the conversation and not a part of it.
When looking at your communications and marketing approach, consider whether you are present on these platforms, and more importantly whether you are sending the right message.
Make sure you are focusing on the business value a customer will receive, not simply a feature that is available. Customers today are under the same pressure you are. How is your solution enabling them to do more with less?
It isn’t enough to do things right one time. Henry Ford proved that success is when you are able to do something right repeatedly. The businesses that have sustained success are able to consistently:
- Meet and exceed SLA’s
- Drive internal change
- Follow disciplined processes
Tribal knowledge is not enough, when employees leave or change roles you don’t want to lose the processes and expertise that they have developed. Relying on tribal knowledge for your operations means relying on a lot of luck.
In addition, you need to review your processes regularly to make sure that they have kept pace with your scaled needs.
Since companies tend to grow organically over time, you should regularly review, refresh and update your processes so they match your current and anticipated business needs
What this means for you
Today’s rate of innovation is faster than ever, and the length of time a company can enjoy a true product advantage is constantly shrinking.
Drive long term success in your business by focusing on how effective your overall GTM approach is, without simply waiting for the competition to catch up.
We can help.