Why you’re not achieving optimal revenue growth

Most companies have an underlying goal of sustainable revenue growth, and linked to that, sustainable sales performance improvement. What stops them from achieving year-on-year sales increases? A simple concept that many companies relate to these days is “value invisibility”. Companies think that their offers to the marketplace are very valuable – but somehow that perceived value doesn’t connect with their prospects and customers. It’s invisible. Because customers aren’t willing to pay extra for value that they don’t perceive, the company’s perceived value cannot be captured fully and monetized as revenues, let alone as profits.

The value invisibility challenge typically creates a set of near-universal marketing and sales problems, as shown in the “problem catalog” below. Almost every company can relate to several of these difficulties.

The Problem Catalog – Effects of the Value Invisibility Challenge

• Creating Preference and Positioning Value: Increasingly perceived as a commodity, difficulty positioning value and differentiating offerings, difficulty selling complex offerings and winning major opportunities
• Building the Pipeline: Late into opportunities, too frequently reacting to RFP’s, lack of qualified leads in the pipeline, wide variations in forecast accuracy
• Selling Skills and Process Discipline: Unable to access buying power and sell effectively to executives, wide variation in quota attainment, lengthy sales cycles and frequent “no decisions”, frequent pursuit of unqualified opportunities: fail to realize sales potential in major accounts

In our work we observe six typical causes for these very common revenue growth problems. How well a company deals with these causes either enables or inhibits its ability to drive and sustain revenue increases.

1. Skills and Knowledge to Engage with Customers – the quality of fundamental selling skills and knowledge at the individual seller: Can sellers sell well?
2. A Codified Sales Process and Methodology – the presence or absence of a formal sales process that aligns well with customers’ typical buying processes: Do sellers sell in a way that fits how customers are prepared to buy?
3. Reinforcing Management Support Systems – the caliber and consistent use of management vehicles to improve skills and reinforce sales processes: Does management reinforce the desired selling approach?
4. Aligned Marketing Communications – the degree to which marketing communications and lead generation are aligned properly with field sales conversations: Do marketing efforts support what sellers do, and provide what customers need to know to buy?
5. Targeted Go-To-Market Approach – whether a company’s value propositions, market segmentation approach and channel strategies are attuned with customers’ perceived needs: Does the go-to-market approach meet overall customers’ needs efficiently and effectively throughout the buying process?
6. Value Framework and Messaging – the extent to which value positioning and messages are defined around accurately-perceived customer problems and needs, not just around products and services: Does how the company define its offers resonate with customers as solving their problems, versus “product-pushing”?

When the six systemic drivers are aligned tightly with customers’ needs and each other, a company is well-positioned to start and continue a string of revenue increases. When the drivers are misaligned, revenue generation problems are inevitable. With misalignment, a company’s internal perception of its offers’ value cannot match its customers’ perceptions of value – and the stage is set for the full set of issues in the Problem Catalog: significant problems differentiating and positioning the offer, commodity perceptions, and a host of symptoms and results of inefficient sales efforts.

SPI’s Sales Performance Framework

The six systemic drivers comprise a rigorous diagnostic framework. They enable us to assess and address the barriers to a client’s sustainable revenue and value growth, from initial value concepts through point-of-sale.

We take a structured approach to look systemically at everything from formulation of the value proposition through market and channel strategies, marketing communications and the full spectrum of sales activities and processes. Our model allows us to understand where specific barriers to performance exist, to evaluate their effect on ability to sustain revenue increases, and to prescribe specific recommendations for improvement.

We typically review all six drivers – three “above the funnel” market alignment drivers, and three “in the funnel” sales execution drivers, and their respective key components, as summarized below.

1. The Value Framework and Messaging Platform has three fundamental components: Problem / Solution Mapping, The Solution Messaging Platform, and Defensible Differentiators.
2. The Go-To-Market Approach also has three fundamental components: Market and Customer Segmentation Approach, Channel and Alliance Strategy and Financial Expectations.
3. Communications Alignment involves aligning all aspects of internal and external communications with the problems and needs defined in the value framework and messaging platform. It has four components, as follows: Product Marketing, Marketing Communications, Lead Generation and Sales Linkage & Sales Tools.
   Next we assess the three “in the funnel” sales execution drivers.
4. Individual Skills and Knowledge: Sales professionals and individuals in the channel need to have the appropriate skills in four areas to function well: People Skills, Selling Skills, Capabilities Knowledge and Situational Knowledge.
5. Sales Process and Methodology: A company’s formal sales methodology should ensure that the sales process and the buying process are well-aligned and calibrated to one another. We assess the following dimensions of a client’s sales processes and methodology: Territory Planning, Account Planning and Management, Opportunity Management, and Process Integration.
6. Management and Support Systems: A company’s sales management and support systems should ensure that all sales resources are given adequate direction and support to achieve the company’s sales and other strategic goals. We typically assess the following dimensions of a client’s sales management and support systems: Sales Management, Recruiting and Organizational Design, Compensation and Performance Management, Enabling Technologies, and Culture and Leadership.

Conclusion

The dimensions of SPI’s Sales Performance Framework outlined above represent a comprehensive approach to diagnosing the causes of less-than-optimal revenue growth. Such a diagnosis provides the basis for a systematic road-map for addressing each of the revenue growth drivers, so that internal and external alignment can improve, opening the door to sustainable gains in sales performance.