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Many execs struggle to find the secret sauce to accelerating profit growth. In Aligning Strategy and Sales Frank Cespedes advocates aligning the efforts of strategists and sellers to implement effective growth strategies. Cespedes explains why:
Most growth strategies fail. Even growth strategies that succeed, according to research Cespedes cites, achieve only 50-60% of their promised financial goals. Where a growth strategy does succeed, it’s normally only from the efforts of a few high performers on the sales team; it rarely occurs ubiquitously across an entire sales team. New strategies therefore often amplify performance variances in sales that tend to be greater between employees than in any other part of business. At the same time, sales is a giant chunk of any business’ spend, and returns on sales costs are declining. In Cespedes’ view, there’s an enormous opportunity to build better growth strategies and get a higher return on sales costs by better aligning the two camps.
The best path to growth isn’t necessarily that obvious. Sales forces are ‘messy’. They’re comprised of people. As Cespedes notes, sellers “are not thermostats you can control with an algorithm”. Ditto for buyers. The best Reps aren’t ‘revenue robots’; they’re adaptive, resourceful, smart, and thoughtful as situations unfold before them. The situations Reps are discovering in sales conversations are largely invisible to strategy.
Cespedes contends there’s a need to let what sales is experiencing inform strategy. There’s an equal need to ensure strategy guides sales execution. This ‘two-way street’ requires informed dialogues. Yet, as Cespedes notes, such dialogues are rare. The absence of such dialogues creates cultures of under-performance. ‘I told you so’ becomes a common refrain. It reinforces the status quo of declining returns on sales investments. Worse than that: key strategy questions rarely get asked; they get answered, insightfully, even more rarely.
Cespedes contends that creating the kinds of honest dialogues needed requires better feedback, to both strategists and sellers, on the cause-effect connections between choices and results. As an example, he cites the need for [and provides a step-by-step process for doing] an Ideal Customer Profile (ICP). There’s then a need to validate it by the profitable growth achieved from doing business with such customers. This requires knowing the economic returns on efforts invested.
Put another way, not all sales are created equal. Therefore, neither are all efforts equally valuable. Improving the returns on sales efforts requires greater clarity on what’s required to right-size and right-shape sales execution practices. In ways that improve the profit yields from winning sales with target buyers.
Aligning strategy and sales might seem like an appeal for the kind of nirvanas we got used to reading about in comic books as kids. Yet there are firms that are living this aligned, high performing, reality. They’re unwilling to settle for the status quo; they’re re-defining it. They have cultures of continuous performance.
Cespedes cites, as an example, the success Mark Roberge has had in driving profitable growth at Hubspot. By 2012, with a hiring and development process based on metrics, they’d become the 33rd fastest growing firm in the US on the Inc. 500 list. We’re hearing similar stories: from strategic hiring practices, informed by talent analytics, one of GrowthPlay’s clients in Health Care achieved a 15% lift in new sales reps’ 1st year revenues.
What’s especially intriguing, in my view: the iterative, agile, sales practices that emerge when performance analytics create fast, honest, dialogues between strategy and sales. A CEO said to me the other day, “that was the most honest discussion of our Bus Dev strategy that we’ve ever had.” His firm grew their average margins 24.8% in four months with a new growth strategy that their sales team learned, from cause-effect analytics, was worth executing.
Cespedes’ perspectives on accelerating growth are a thoughtful guide to achieving it. With effective strategies, well executed with aligned sales practices. Iteratively honed. In honest dialogues. Informed with cause-effect analytics. Let the informed and honest dialogues begin.
John Cousineau is the founder and CEO of innovative information inc., makers of Amacus. His firm provokes improved B2B sales productivity by helping sales teams see + improve the buyer value of their sales practices. Follow John at @jcousineau.
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