As I discussed in my five part series (A fresh look at the market of Marketing), for-profit companies are inevitably trying to achieve sustained, profitable growth. In order to understand what it is that prevents them from reaching this goal, we can ask them what is getting in the way. For example:
They are not able to locate hidden opportunities in the market, or related markets they expand into - Market Strategy / Product Planning
They are not able to successfully convert hidden opportunities into winning solution concepts - Design
They are not able to successfully turn winning concepts into actual products and related services - Product Management
They cannot effectively develop revenue with the solutions they build - Marketing & Sales
I indirectly pointed out in a visual that revenue development can happen in a number of modes:
An effort to capture net new customers
An effort to retain existing customers across the entire expected lifetime
An effort to offer new ways to add value for existing customers (e.g., related jobs-to-be-done)
An effort to get existing customers to advocate for their products or brand (e.g., referrals, recommendations, and other network effects)
These modes might lead one to believe that a marketing contact / interaction to cross-sell in a customer service center is different than the same activity in direct email. The objective is still the same, it’s just a different solution is being employed. This context is important to understand. However, we’re not studying solutions, we’re evaluating the importance of an objective, and how satisfied users of certain solutions are with reaching the objective.
This is a very simplistic look at the world, and the reason should be obvious…
Organic Markets are Solution Agnostic
It’s the solutions, and the related theater of marketing and sales that make things complicated. Markets are a lens that you can use to see the world in a more stable fashion. Stability is critical if we’re to be successful in our analysis over time.
Markets are solution agnostic, because while our core objectives in life never change, the solutions we use to reach them do.
Developing revenue is one of the core objectives of an organization that contributes to the primary objective to achieve sustained profitable growth. It’s everything else (constraints and solutions) that get in the way of reaching this objective. You would be hard-pressed to name a company that is able to do this over decades or longer. The average tenure in the Fortune 500 has decreased dramatically over the last 50 years.
The market of corporate groups that are trying to develop revenue is no different. It’s just a simple fact. It’s an objective that has to be reached in order to succeed. It doesn’t matter if the current buzzwords are Zero Click Strategies, Hyperlocal Marketing or Mobile-first Creative, the objective remains the same.
I discussed my view of Marketing in the last series as a sub-objective of revenue development, and in this post I will talk about Sales. The reason these two split are apart is because one activity is potentially executed over multiple periods in order to be successful, nurturing. The other activity is expected to reach its objective in the current period, closing. Just ask any quota-carrying sales person if they appreciate having to nurture a prospect that won’t close within the next 1-2 periods.
Marketing & Sales support revenue development collaboratively
While we have seen the emergence of e-commerce as a thing (that many marketers believe they own), the fact is that it’s simply another sales vehicle. It is expected to close the sale now. The marketer simply needs to drive something to that platform.
While this is especially true in the consumer world - and we all have experience on platforms like Amazon - it can also be true in B2B scenarios; especially with complex guided selling and configuration. Those processes will typically have a real human working on the process as well since these are higher ticket items and corporate customers will demand a human interface at some point.
These processes I’m describing each have an output and at least one valuable thing. In the case of the nurturing process (marketing) the expectation is that a high quality lead (one that is likely to close this period) is delivered to the process (human-owned, or digital) that is expected to convert that lead into revenue.
I know there are marketers that are screaming at me right now that they close deals. Folks, I’m not talking about theater here, I’m talking about the logical break-down of competencies. This applies to small startups just as it applies to large Enterprises. As the Enterprise grows, the likelihood of a single person, or team owning multiple competencies decreases out of practicality.
The Sales organization takes what they expect to be a high quality lead and tries to close the sale. If the quality level drops, we can expect to see that in the performance metrics for the market. In any given organization, you will see lower conversion rates, but we’re looking at the market as a whole here. At the market level, we’re looking at the aggregate of solutions and methods to understand where each are failing to deliver the objective, or where competing solutions and methods are succeeding.
So, the Sales organization is converting qualified leads into revenue for the Enterprise, and the Enterprise is delivering a solution to the customer.
Here's the Map of the Market of Selling
Closers who are trying to convert a qualified lead into revenue…
Receive a qualified lead - this is the integration point with the marketing process. Even in automated systems, this still happens, and it’s worth not forgetting that
Understand the sales opportunity - the closer has been handed a package of information about the lead, and this information needs to be consumed and synthesized; whether it’s a digital platform, or a human
Prepare to sell a product - before the Closer begins, there are steps that must be taken to ensure the rest of the process goes as planned. As a researcher, you might want to capture whether a new or existing product is being sold in order to conduct a prioritization survey
Schedule the sales engagement - the sales engagement will still occur, but you may want to know whether it occurs on an e-commerce platform or through a series of expensive interactions with a sales team (sales engineer, sales executive, etc.)
Prepare for the sale engagement - this will depend on how you present your offering and what venues you prefer
Understand the lead’s situation - you already know a lot about the lead, but this is the time to enrich your knowledge so the offering is as personal as you can make it
Convey the value of the offering - if you are a software provider, you may have a sales engineer conduct a demo, or you may use a presentation deck, or maybe a test drive of a vehicle
Support the decision-making process - there will undoubtedly be questions that you will be required to respond to. This may be in real-time, or over the course of days or weeks
Convert the opportunity to revenue - Maybe a better term is simply “Close the sale” and we can hash that out later if you have any comments. I’m always open to more inputs
Hand off the sale to be fulfilled - this is the integration point with a subsequent internal group with the objective of delivering solutions to the customer. What this looks like will depend on the solution, but the objective is still the same
Provide post-sale support - as you will see in a later post, there is still an opportunity for this to go off track, and while fulfillment should be taking care of this, a quota-carrying sales executive may want to minimize commission risk, and also set the stage for future sales (another mode)
Assess revenue development performance - It is important to review the performance of the end-to-end process. Not just Sales, but how well Marketing worked with Sales to reach the ultimate revenue development objective.