All business owners have a goal to achieve consistent profitable growth. But for some, the goal eludes them, no matter how hard they work and how many ideas they apply.
Growth in itself is difficult, but to then achieve consistent profitable growth is even harder. The results can be achieved in several different ways. Through acquiring or partnering with other companies, expanding into new markets, and selling more products or new products within your existing market. Most, if not all, come down to the efforts of sales and marketing.
When a business commences, it is typically led by an entrepreneurial individual who finds a niche or opportunity. The early days are full of wins and often the results of selling to what is referred to as low hanging fruit. These are the sales that are easy to win and can give a sense you are heading in the right direction. Their strategy is starting to resonate with the market.
Those low hanging sales happen under the radar of competitors. As you become more active in the market, your competitors start to take defensive tactics to ensure you do not gain any market share. With the increased competition and the speed at which companies operate, competitors quickly identify newcomers to a marketplace and swiftly work to remove them. They have the credibility and market clout to undermine your plans.
At that point, the business needs to take action to remain competitive. No longer is it about a great salesperson winning deals or a person’s network introducing them to companies. You are now a target in your competitors’ view, and you need to lift your game fast.
The subject of profitable growth is broad, and there are many barriers within a company to address. We have set them out in this guide Breaking Through the Revenue Barrier.
This article focuses on marketing and sales, two critical areas instrumental in achieving consistent profitable growth and underpin most strategies.
When the pressure is on, many business owners turn to simple, easy to implement fixes to jolt the company to the next level of revenue. There can be a lack of understanding of the gradual requirements to drive sales, leaving the door open to vendors peddling quick solutions. Instead of taking a systematic and deliberate approach to investing in their sales and marketing organisation’s improvement, owners choose to focus on tactical efforts that provide quick, visible results. That is a mistake.
Tactical events such as sales training fail to deliver any real value to companies, whether short-term or over a longer time. It can assist, but if sales and marketing are not correctly aligned to the strategy in all aspects, the sales training will be futile. Sustainable competitive advantage flows to companies when sales and marketing alignment is installed correctly, and each unit is structured and operated to support strategy execution.
Building organisational capabilities requires focused attention and must be done in the right sequence to realise results. The marketing and sales area requires equal diligence and rigour applied as other areas such as operations and finance. Their efforts can determine your profitability, the customer mix you acquire and how competitive you are in the market.
Business owners should ask the following three questions to get the process moving in a fruitful direction to be competitive and achieve growth:
1. Do we know how good are our sales and marketing organisations capabilities are compared with best practice and competitive markets?
2. What is at stake if we do not radically improve our sales and marketing performance?
3. What is the ROI on our current sales and marketing organisations investment?
4. What should marketing and sales look like, what level of headcount is required and how much should we be investing in this area?
Having those questions answered in detail will be a turning point in your growth. You create a platform that provides the necessary leverage to grow and a road map of how to grow. What people need to be hired, what functions they should be doing, and what ROI should we expect from the investment.
Building sales and marketing organisational capabilities alone is not enough. Without the right operating business model to support improvement and sustainable growth, any improvements will wither.
An operating model needs to be specific and measurable, and ingrained into the sales and marketing organisation’s DNA. The operating model should include elements such as:
- A clear growth strategy and implementation plan for both sales and marketing has scheduled and formal reviews throughout the year.
- Robust sales planning and implementation process that demonstrates how results will be delivered for the products and services.
- Forecasting that supports cash flows and required profit margins.
- Documented expectations for the marketing of the number of sales-ready leads required to support sales efforts.
- A communications plan that supports the building of the brand and opening markets ahead of sales efforts.
- The measurement that defines the performance daily and weekly basis makes many minor adjustments as required rather than a single major event adjustment.
The operating model is the methodology that drives growth and is only effective when it becomes the sales and marketing organisation’s culture.
Culture, in particular, should not be underrated in its contribution to the operating model. Top-performing sales and marketing organisations actively built a customer-focused culture and managed to create smarter, confident, capable, and organised individuals. The executives contribute to the business by being more agile through faster decision making. They enable their teams through quality tools and well-defined processes that support delivering growth.
To achieve consistent profitable growth requires a consistent effort in a well-planned and managed internal operating model. If you are not consistent on the inside, you will never deliver results consistently in the market. Your inconsistency will undermine the profitability with funds unwisely and unnecessarily invested in the wrong marketing and sales efforts. Achieving profitable growth is operational effectiveness across all aspects of a business.
Sales Focus Advisory assists companies in building operational models for marketing and sales. You can reach out to the office to organise a time to discuss your specific needs via our contact form or telephone 1800 699 997
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