3 Strategies To Boost Sales And Marketing Productivity
Clearly, revenue growth will require sales and marketing expenses to grow at the same rate. Most sales and marketing managers strongly believe that their teams cannot be more productive in the long run. Teams may experience cost reductions and efficiency improvements, yes, but they won't achieve full and lasting productivity gains. This is a harmful, self-perpetuating belief, and our research shows that it is not necessarily true.
The metric we focus on is called "business productivity," which measures the value of a business created per dollar of revenue (or gross profit) and then how fast revenue is growing relative to growth, sales, and operating expenses. If there's any truth to managers' belief that improving sales productivity over time is difficult, we've done some research.
We analyzed 1,254 state-owned B2B companies in 10 industries from 2017 to 2021. We found that the average business across all industries had consistent business productivity in any given year, with revenue growing at the same rate as sales and marketing. Accounts. About 19% of companies improved their business productivity by more than 10% in one year, but most of them finally realized it. Only 5% of companies achieved business productivity growth in three out of four years.
These leading companies in sustainable productivity have another great advantage. Total annual stock returns (TSR) have exceeded by an average of 12%. TSR's advantage in logistics and transport ranges from 21% points to 4% in paper and packaging.
Our research has identified common approaches to increasing business productivity that fail or at best underperform. One approach is to focus only on the costs that hinder long-term growth. In other cases, companies rely on the latest sales or marketing software or unproven artificial intelligence tools, then watch costs rise without commensurate increases in revenue. Others may build unrealistic productivity goals into their plans without a realistic way to achieve them, which can cause sales reps to miss targets and give up.
Productivity managers do it differently
Our research found that business productivity leaders have sought lasting benefits in three areas over the years. They are perfecting their market model. Strive to make every rep a performer, increase frontline productivity, and streamline sales and marketing support.
Perfect your marketing model.
This includes evaluating how to implement sales and marketing opportunities with higher revenue generation potential. Many companies rely on historical sales data and outdated coverage models to determine how much inventory is needed and where to allocate it. These models reduce the return on investment for the sales and marketing organization.
It is more efficient to recalculate account allocation based on future customer spending, creating the most appropriate positions for each vendor. Large companies are fine-tuning their customer segmentation and shifting customers to more profitable marketing channels with lower cost recovery, such as internal sales, offshore roles and, if necessary, e-commerce.
Each representative player a.
Companies can use a number of methods to increase the productivity of individual line representatives. One is to create data-driven sales plays; Coordinated account-specific sales and marketing activities, including customized sales materials and follow-up to ensure reps focus on the most exciting opportunities.
Consistent training and exercise can shorten climbing time for beginners and improve performance for veterans. Bain research shows that high-performing reps have more frequent, high-quality interactions with managers than lower-performing reps, such as weekly one-on-one meetings and regular pipeline reviews.
Make sales and marketing support effective.
Managing a small support team can result in significant savings or free up operational costs that can be used for customer-focused sales activities. Optimizing support costs requires finding the right automation and digital tools to simplify complex processes. Additionally, other strategies include improving the accuracy of individual rep quotas (set with support), narrowing organizational boundaries and layers, and evaluating sales and non-quota roles.
Productivity leaders consistently apply strategies from each of these categories. Consider how an IT application security vendor reduced its coverage as annual revenue growth fell from 40% to 20%. The company expanded the number of customer segments and created more personalized sales activities for each segment. Restructured sales territories based on overall target market, individual buyer trends and customer characteristics. These measures and others have helped the security provider achieve business productivity growth of more than 10% in three out of four consecutive years.
Other companies are taking similar approaches to unlock business productivity. A global food packaging company began to change its marketing model through various methods. These include segmenting customers based on capabilities and service needs, increasing the use of low-cost go-to-market channels such as inside sales and e-commerce, and strengthening sourcing professionals worldwide.
Design and replication
In addition to continually evaluating proven pillars, what sets productivity leaders apart is their deliberate and iterative approach to implementing change. His approach has several organizational aspects.
First, they appoint a clear business productivity leader, often in a specific role. This executive typically reports directly to the heads of revenue, finance or operations and has programmatic resources. The staff helps create a set of tactics to implement at all levels of sales and marketing, driving each and changing processes and behaviors.
Experienced productivity leaders also tie sales productivity goals to annual and multi-year plans, so the effort goes beyond the sales team. To that end, CROs, CFOs, and COOs should communicate regularly about clear productivity issues. The CFO's sales/marketing revenue and expense targets should reflect the expected productivity gains of the sales and marketing organization, with clear strategies for achieving those gains. And a multi-year business productivity roadmap should be linked to an IT roadmap so the business can plan for the necessary technology investments.
Finally, a mature business team is essential for building sales and marketing skills, communicating with the finance team, and creating continuously improved go-to-market plans. The operations team ensures that strategies are consistently implemented across all geographies and business areas.
The right questions to ask yourself in times of crisis
CROs, CFOs and COOs who are determined to continue increasing their productivity will want to answer a number of very profitable questions.
- Does our company know what drives business productivity and whether we are above or below our targets?
- Where should we increase productivity, at what level, next year, three years from now, five years from now?
- What methods combine to formulate a realistic way to achieve the goals?
- Do we have the right structure, operating model and dedicated senior leadership to enable these achievements?
- Who is responsible for implementing the achievements? Do you have adequate information and communication systems with finance, human resources and other functions?
Sustaining business productivity growth benefits companies across all sectors and across all business cycles. But it's especially important in the current macroeconomic environment, as recessions reshape the landscape. During the 2008-2009 recession, performance fluctuated dramatically among nearly 3,900 companies worldwide, according to a Bain analysis. Winners are outpacing losers, widening the gap between revenue and market capitalization, and are in a constant expansion.
The same logic applies today. The Business Productivity Framework forces companies to make a healthy trade-off between profitability measures and cost reduction – a trade-off that helps them outperform their competitors for years to come.
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