Author: Joel Reed



2016/17 Revenue Study: The state of revenue performance and what that means for B2B sellers

May 17, 2018
Joel Reed

Mereo recently completed its fourth annual revenue performance study of Fortune 500, Global 500 and Russell 2000 companies for the 2016 and 2017 fiscal years.

Once again, we have uncovered similar trends to previous studies — which has been consistent since the recessionary period of 2007 and 2008 — and we continue to be surprised by the underperformance of most companies’ revenue line.b2b sellersWhile there was some improvement as compared to last year, a relatively small percentage of companies can claim strong annual revenue performance. For instance, nearly 48% of Fortune 500 companies saw their revenue actually shrink last year (compared with 51% the year before) and nearly 67% of Global 500 companies reported declining revenue (as compared with 73% the year before). The somewhat brighter area was in mid-size companies, where a comparatively small 29% (still nearly 1 out of 3) of companies shrank this past year.

If we generously define strong growth as over 5% revenue growth, we found that only 17% of the Global 500 companies, 25% of Fortune 500 companies and 47% of mid-size companies met this hurdle in the past year.

So for the fourth year in a row, mid-size companies outperformed their larger counterparts and the Global 500 performed the worst.

What does this mean for B2B sellers?

A positive way companies can react to poor revenue performance is to continue to focus on driving down costs and improving productivity. By doing so they can continue to improve profitability as confirmed by the most recent quarterly earnings reports.

In this environment, sellers must focus their primary value statements around productivity and cost-reduction to resonate with their buyers. In addition, a seller can clearly show that they can help enable new revenue streams, as opposed to improving existing streams. They can also more easily engage the prospect around revenue growth benefits as well, since new streams of revenue are more easily quantified than increases in existing streams. If a seller has a solution that both reduces the costs and enables new revenue streams, they are in an excellent position in today’s market.

Initiating conversations with prospective buyers in terms of their current revenue and profitability environment, versus simply presenting your set of tools, will start to differentiate you from the competition in terms of how you sell in addition to what you sell. Demonstrating a knowledge of the current corporate environment and an empathy for the focus on cost, and helping the prospect uncover new potential revenue streams for their business, will position you as a valued partner focused on solving their problems versus a sales representative focused on your quota achievement.

While this data may seem dire, it does not have to be. Understanding the needs of buyers and seeking to serve them, right where they are, will set you apart in these interesting financial times. At Mereo, we thrive on equipping teams to provide value to their industry and serve their buyers. For guidance on how to have these conversations, contact us or give us a call at 512.400.0460.

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Download our free eBook for tips on how to seek to serve your buyers today.

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How a sales training program put a company on a path to sustainable revenue performance within 6 weeks

March 29, 2018
Joel Reed

When salespeople aren’t meeting quota, leadership can try to guess what is happening. They can place blame on a process or on the people on their team. They can chock it up to just a bad quarter or bad luck. But truly strong leadership will see the revenue performance shortcomings as an opportunity to learn and grow — and conquer revenue goals in the future.

The latter is exactly what Pitney Bowes leadership did when their sales weren’t meeting their goals.

The Sales Training Program

In February of 2017, Pitney Bowes engaged Mereo to take more than 300 of its salespeople through a training program. After a lot of deep diving into their company, talking with their clients and observing all the cogs and wheels moving — or not moving — from the outside, we devised a training program to reorient the sales conversation from solution-centric to client-centric. We designed a three-step program:

  1. Training the sales management team with an abridged program (no training program will stick unless leadership is engaged).
  2. Spending two days with salespeople (and with their leaders at the table for support) in intensive training leveraging BOTH real life and role-play situations based on actual client scenarios.
  3. Holding ongoing reinforcement sessions post-training with individual feedback.

We educated the salespeople and their leadership on techniques and tools to engage prospective and current clients in the context of their business workflows. Through understanding typical customer processes, typical challenges those processes can present to the goals of the company and opportunities to improve these processes, the salespeople started to see ways to better engage their clients.

At Mereo, we believe in seek to serve, not to sell™. This tenet led us to develop training that helps salespeople think about the business processes of the customer and to stop thinking about the product or solution first. This allows for new, engaging conversations between the salesperson and the buyer.

The Results

Within six weeks of the training program, Pitney Bowes achieved 137% quota attainment, a 37% growth in their sales pipeline, and an increase in deal size and appointment setting success approaching 80%.

What Does This Mean For You?

If your salespeople aren’t meeting quota — or you’re eager to put your business on a path to sustainable revenue growth — consider investing in one of your greatest assets: your people. It doesn’t stop there, either. In order for any new concepts to take root, leadership must be 100% invested, and that means taking the training alongside your salespeople.

Learn More About Sales Enablement

business strategies

How many business strategies does it take to grow a company?

May 4, 2017
Joel Reed

Most enterprises talk about their business strategy as a singular entity with a singular focus. Yet, in reality four distinct strategies — all interdependent of one another — work together to help a business align its goals and efforts across departments and maximize opportunities for growth.

1) The Corporate or Business Strategy

The overall corporate or business strategy lays the foundation for the purpose of the business and the value it wishes to deliver to market — and more specifically to its target customers.

When developing your corporate or business strategy, evaluate your business and its purpose. Frame your defining questions in a way such as:

  • Is our business building mouse traps or are we exterminators?
  • Are we a mapping service or are we a service leveraging GPS to support all activities around movement?  

2) The Financial Strategy

The financial strategy designates a business’ financial metrics for success over a period of time and defines the types of revenue, cash flow and margins expected. The financial strategy must align with other strategies to reach its goals.

When developing your strategy, expect to discuss areas such as:

  • Do we sell products or services?
  • Are we transactional or relationship-driven?
  • Do we innovate or optimize?

3) The Solution Strategy

The solution strategy details whom a business is targeting, with what solutions and in what markets, and how the business will compete. This strategy lays the framework for what solutions will be developed, how these solutions will be created — organically, through a partnership or with an acquisition — as well as when the solutions will reach the market.

The solution strategy must:

  • Align to the corporate strategy (or work to inform the corporate strategy)
  • Support the financial strategy
  • Create context for the go-to-market strategy and be informed by the go-to-market strategy

4) The Go-to-Market Strategy

The go-to-market strategy focuses on the successful execution of the previous three strategies. Leaders can most easily set a barometer by which success can be measured here, and they can inform their solution and financial strategies while executing within their parameters and reinforcing the corporate strategy — in effect, creating the brand.

Your go-to-market strategy will incorporate the capabilities of the customer-facing organizations across all channels, including:

  • Sales
  • Marketing
  • Support
  • Services

Each of the four strategies should be revisited annually, if not more often, and they should be utilized as a filter and validation for one another on an ongoing basis. Misalignment of any of these strategies can lead to missed expectations; reduced return on investments in solution and go-to-market initiatives; confused and frustrated employees, customers and partners; and slow growth or entrenchment. But when aligned, your business will experience synergies and clarity across the organization — and within the market — and will realize corporate growth and success.

 
Does your team need help creating or reviewing one of these strategies? Do you need an outside eye to review how your strategies align across your organization? Contact us today for further information.

 



Product versus solution management — and why it matters

April 27, 2017
Joel Reed

Enterprise executives often focus on the effectiveness of the product management process within a business and lament the inefficient use of resources or lack of sufficient return-on-investment (ROI) for research and development. The premise of the conversation is in itself representative of the underlying problem — “product” is too narrow a focus and often inhibits understanding the real opportunity, which is to focus on offering a solution to the market. Solution management is different from product management in that its inherent focus is broader and that its processes engage a wider audience.

Product management focuses on the attributes, roadmap and pricing of a specific product.

Solution management focuses more broadly on solving a problem including the product itself, its delivery, packaging, service and support, and how it interacts with other solutions.

Example: Kayaking

    • Product: Kayak
    • Solution: Kayak, kayak accessories including seats, netting, helmets, paddles, life vests, transportation, kayaking how-to videos, etc.

Solution Management Captures a Bigger Picture

The solution management focus is on the product or service and its packaging, pricing, delivery, support, service, as well as how it interacts and any synergies to other solutions within the company or marketplace. This holistic approach often forces conversations on design, packaging and approach that will not or do not occur when focused on solely the product. The benefits of solution management are often higher order, such as market adoption rates, more satisfied customers, and better internal readiness and alignment.

Tip: What teams/functions are engaged in the definition, creation and launch of your company’s solutions? Are all the functions engaged from strategy definition to roadmap creation and through launch? Usually the easiest way to shift the focus from product to solution is to engage a wider array of business functions in these processes.

Solution Management Engages a Wider Audience

The solution management focus begins with an understanding of four key strategies within the business: business, financial, go-to-market and solution. Each of these strategies are critical filters for solution management activities and are validation checkpoints through all solution management processes. As a result, the organizations involved in these strategies have a seat at the table for solution management activities, typically including:

  •    Product Management
  •    Finance
  •    Development / R&D
  •    Marketing
  •    Sales
  •    Service/Support

The interaction of these functions ensures the outcome of solution management processes is in alignment with key strategies, broad and encompassing of all the components of a solution, and supported by the company.

Tip: Creating formality in key process steps will drive cross functional engagement. For example, the formal approval of a 18- to 36-month solution strategy document by executives representing key functions (product, sales, marketing, finance, service/support) as well as approval of each solution roadmap will drive cross-functional alignment and improved execution.

Solution management can lead to the achievement of higher returns on investment due to the identification of better solutions aligned to market needs, increased cross-functional engagement, enhanced execution of integrated launch plans and improved acceptance by the market.

Are you ready to take your solution management discipline to the next level? Learn how you can elevate revenue performance with expert solution management best practices in this exclusive Mereo eBook.

 



Disappointing business growth since recession

November 24, 2015
Joel Reed

The recently released 2nd annual Revenue Performance Growth Index Annual Report for 2015 once again shows what can only be viewed as disappointing revenue results for both large and mid-size US public corporations, as well as the largest international firms. A quick snapshot of the report reveals some disturbing results and trends:

  • 29% of Fortune 500 companies had negative revenue growth this past year, and 40% grew at a less than 2% rate
  • 28% of the Russell 2000 companies had declining revenue, while 42% grew at a rate less than 2%
  • 36% of the Fortune Global 500 companies had negative growth over the past 3 years with 66% averaging less than 2% growth

Finally, and perhaps most alarmingly, over the past 6 years (since the bottom of the “Great Recession”) 1 in 5 companies are smaller now than in 2008, and another 10% grew at less than 2% coming out of this deep recession.

Read full report.

What is a sales person or sales manager to do in light of these results, and how does a marketing organization best arm sales for success in an environment that could well be described as hostile?

Let’s start with what these results mean, in general, for the organizations studied. These results likely translate into financial officers driving a focus within the organizations on cost and expense control and on productivity improvement. With little evidence that the go-to-market organizations can or will yield positive results, the internal focus is to cut, cut, cut and cut some more. Driving revenue growth is imperative, and programs to support that should gain traction. Yet the natural bent for executive leadership to deliver earnings growth is on expense control, while revenue programs will need to prove their value and show a track record of success to gain broader support.

As a sales person or manager selling to these companies in this business environment do not despair, especially if your solutions/products can demonstrate an ability to reduce costs or improve productivity. But, be aware that the buyers of a solution, your buyers, may be more skeptical than normal. This puts a premium on ensuring you and your team take the time to fully understand the prospect’s business and financial environment through advance research and in-depth discovery. And do not forget that your buyers’ personal success (e.g. salary, bonus, other compensation and maybe even career) may well be dependent on showing success in controlling costs and other expense-based metrics.

You also need to position your solution in terms of the ROI it will drive with specific proof points based on actual results, industry standards and always-critical customer success stories and references. In a difficult selling environment, references are even more critical as proof points – especially those in the same industry with similar problems and with buyers in similar positions.

If your solution can support revenue growth, your prospect’s recent history – and that of the industry at large – may create an environment of even greater skepticism. This may entail an even greater need to speak to specific pain points and issues that have been preventing growth. Further, it will likely mean you will need to be more prepared with well-grounded data, statistics and market information that support your position AND provide needed insights for your prospect. Finally, be prepared to demonstrate specifically how your solution solves the identified pain points including “day in the life of…” scenarios and prove your differentiated value proposition in context of your buyers’ environment with client value stories and strong references.

Companies can and do win in this environment. Let’s rephrase the previous statement for emphasis – Not only can you be successful, but you can be wildly successful in an economic climate such as this. Moreover, you can rise above the crowd and differentiate yourself for times when the headwinds are not so strong. Those organizations and professionals delivering breakthrough revenue performance focus on the sales team’s ability to properly prepare, discover and articulate key pain points, and position their solution to uniquely solve those specific issues. In addition, specific ROI benefits and supporting proof and references are critical to gaining approval of funds as your buyers seek to justify the investment. Marketing can support sales by fully vetting existing clients, developing reference customer engagement and nurturing processes and programs. They can also publish detailed customer value studies, as well as other sales ready assets, to support ROI and revenue growth capabilities. Ensure those tools in the sales kit are oriented around your target buying audience’s situation and reinforce the compelling value proposition your solution delivers.

Check out the full report to see the declining trends mentioned above HERE, and let us know how we can help your team win in this economic climate.

information@mereo.co

303.495.5200



Effective launch: Measuring is key

July 21, 2015
Joel Reed

Measuring actual results against expectations is one of the most critical launch focus areas and also the one that is often overlooked.  This is primarily the result of the perception of a launch as an event versus a process.

The type of measurement and monitoring required changes as the phases progress through the launch process.  Initially the team is measuring activities against the plan and spending against the budget.  The focus of these measurements are to ensure timelines are met, assets and deliverables are ready and budgets are not exceeded.

Once execution is underway the focus continues to be on activity and budget management but expands to also include results.  For Promotional and Market Impact launches key performance indicators tend to fall in 3 categories:

  1. Target Market Awareness
    • Internal Enablement– capability of sales and services/support often measured by engagement metrics and time to closure metrics
    • External Awareness – media and market awareness both aided and unaided as well as social media volume and type of exposure (positive and negative)
  2. Pipeline Development 
    • The volume and value of sales opportunities, supported by early stage lead development through social media, web and online shopping site interest/hits
  3. Revenue/Bookings Growth 
    • Actual sales of the product or service in question over a 3-12 month period as compared to previous sales and expected results

Finally, measurement and monitoring should include analysis of the launch process, the launch team and the launch results themselves to inform and improve the overall process and any other launches underway.  This can be accomplished via the regular Monitoring phase meetings as well as through surveys of the launch team and affected groups to understand what worked well and what could be improved.

As you hopefully now can see, effective launches are involved processes that engage a cross functional internal team and numerous external audiences.  With companies spending 5%, 10%, 15% or more of their revenue on product and service development why would they not ensure the Planning, Communication and Measurement of the launch of the output of this investment is done every bit as well.

How has this process overview resonated with you? What impact will this have in your next product launch? Drop us a note about the changes you are implementing. And if you need a sounding board or some assistance for your next launch, let us know how we can help.

About Mereo

For organizations seeking to instill the go-to-market tenets paramount to winning an unfair share™ of sales cycles, Mereo powers sustainable revenue performance. Market leaders such as Ariba, Pitney Bowes, Accel-KKR, Appirio, SAP, Ace Hardware, Bazaarvoice, E2open, Microsoft, Symphony Technology Group, North Plains, OKI Data, CenturyLink, Oracle, The Vintage Racing League and dozens more employ Mereo’s revenue performance programs to unleash repeatable revenue growth. For more information about Mereo, visit the Firm’s website at www.mereo.co.

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information@mereo.co
303.495.5200



Effective launch: How to communicate

July 15, 2015
Joel Reed

Communication in the context of a launch is about identifying what to communicate, when and to whom. The focus of communication will change by launch type and phase.  Internal communication to gain alignment and set priorities on execution is critical for program success.  External communication activities will vary by stage and audience.

Please see the following tables for some examples of how the focus of communication changes by launch type and phase.

Launch Category:

PRODUCT OR SERVICE UPDATE

Launch Category:

PROMOTIONAL

Launch Category:

MARKET IMPACT

Note that there are no differences in the Initiate and Monitor phases across launch types.  The key differences around communication occur in the planning and Execution phases as a result of increasing scope and budgets to enable the revenue goals via advertising, demand generation and sales execution support. In addition, as the launch category progresses and becomes more impactful to the company, the depth and breadth of communication and the number of associated assets, budget allocated and resources deployed will grow.

Now we’ve gone through planning and communicating, and next week we’ll conclude the Effective Launch with discussing how to effectively measure.



Effective launch: Time to plan

June 30, 2015
Joel Reed

Effective launch planning begins with establishing some basic parameters about the product or service being launched, its potential impact in the market and the amount of budget allocated to the launch itself.

A leading practice is to consider three categories of launches as in the following table:

Launch Category

 Definition

 Marketing Budget
Product or Service Update Fix or add specific features on existing product or service with minimal incremental market value Less than 0.1% of annual revenue
Promotional New capabilities that are of customer interest and will drive increased
revenue of less than 3% over a 12 month period		 Between 0.25% and 0.75% of annual revenue
Market Impact Significant new capabilities or a new product or service that will have
broad market appeal and will impact revenue by more than 3% in a 12 month period		 Over 1% of revenue- likely in the 1% to 2% of annual revenue range

A Product or Service Update launch is one that typically only impacts existing customers and is communicated on a need to know basis. As such there is no or minimal  incremental revenue expected, and there is also no budget allocated for advertising expenses. A common example we all experience is an application upgrade on our smart phones.

A Promotional launch will drive some incremental revenue and require coordination with external resources. Often existing customers will be engaged as champions of the new product, service or feature and advertising expenses in the range of 0.25% to 0.75% of company revenue are typical. An example here would be a new feature that creates some competitive differentiation or enables an extra fee or charge on an existing solution.

A Market Impact launch will drive sufficient incremental revenue as to have material impact on revenue and expense budgets and is impactful to the entire target market or most of it. There are initial customers identified and supported as to be references for sales and advertising and it is typical to spend over 1% of company revenue on the market launch. A new product or service launch is a typical example here.

Launches are a process NOT an event.

There is as significant an effort ahead of the product or service release as there is after. In planning a launch there are typically 4 phases to consider – Initiate, Plan , Execute, and Monitor – as detailed below.

Initiate –This stage is where internal knowledge transfer occurs about the solution or product improvement to the cross functional launch team; an initial launch project plan is created; the kickoff meeting is held; and any key messages are defined. The team typically consists of product marketing and management, corporate and theater marketing, services/support and sales operations

Plan – During the planning stage the project plan is finalized, budgets are confirmed and allocated and metrics/KPIs are identified. The same cross functional team is engaged as in the prior stage and a calendar of events and activities is completed and published to appropriate internal organizations.

Execute – During the Execution phase regular program management meetings are held to track progress against plans with particular focus on project and budget management. Typically executive updates are prepared and distributed and it is during this phase that many of the marketing deliverables occur and the bulk of communications are completed.

Monitor – This phase may last 3 months to over a year and will track success against key performance metrics defined in the Plan phase. Most of these metrics are revenue performance focused in nature. The team will hold regular update meetings (typically monthly) to review and adapt activities based on real-time results and to take lessons learned from this launch and incorporate them into the launch template and other launches that are in earlier phases.

Throughout the launch process for all three launch categories, it is important to identify who needs to be engaged and informed as we will see in a moment. It is also critical to establish clear goals for each category so that the company can understand and measure success versus expectations.

Check in next week and we’ll move on to the communicating stage of an effective launch.



Effective launch series opener

June 23, 2015
Joel Reed

If your company is like most companies it spends tens of thousands or hundreds of thousands of hours each year defining, creating and distributing the next new product or the next new product enhancement.

In my personal experience, hardware and software companies typically invest 8% to 15% of their revenue in development of new products and features.

An analysis done by Quora.com shows that the spread is even larger for SAAS (cloud-based software providers) companies ranging from a low revenue 3% of to a high revenue of 37.5%.

Regardless of the amount spent, the same questions still apply.

  • Are companies getting a return on that investment? Do they even know?
  • Do companies actually create an environment in which an enhancement or new product actually has a chance to succeed in the market?
  • Do most companies even define metrics for success?
  • Do companies measure and track sufficiently the very metrics they set?

Much of the success or failure of a product or service will come down to how it is launched into the market as a whole; that is within the company itself and within the existing customer base and the target market in total.

Yet few companies take the time and spend the appropriate resources to define, execute and manage effective product launches that address all three of the aforementioned audiences.

Plan

Define and utilize a consistent launch framework that engages the appropriate organizations, budget for your company (one size does NOT fit all here) and ensure effective oversight of that program. 

Communicate

Ensure the framework addresses appropriate and timely communication of the right information to each constituent group within and external to your company throughout the launch timeframe which typically encompasses activities well before actual product or service release to the market. 

Measure

Set realistic and measurable key performance indicators and track them for the appropriate length of time usually long after the product or service is released. Then take appropriate action to improve the Plan for future launches based on activities and results of past

Next week we will further discuss the planning stage to continue on the series of Effective Launch.



Time to get personal: How B2C engagement is changing B2B

March 10, 2015
Joel Reed

A seismic shift is happening in the way we do business, and Ram Charan, author of a recent Fortune article has called it “the most sweeping business change since the Industrial Revolution.”

“…algorithms are dramatically changing both the structure of the global economy and the nature of business. Though still in its infancy, the use of algorithms has already become an engine of creative destruction in the business world, fracturing time-tested business models and implementing dazzling new ones. The effects are most visible so far in retailing, creating new and highly interactive relationships between businesses and their customers, and making it possible for giant corporations to deal with customers as individuals.”

In B2C transactions, consumers have gone from a category or customer type, to an individual who is not only noticed and heard, but expecting to be catered to. The real-time interactions that take place via social media, and personalized customer profiles created through algorithms and behind-the-scenes data collecting, have changed the way in which consumers expect to be engaged. Customer interaction has come full circle to the days before the Industrial Revolution.

“Indeed, the math house is shaping up as a new stage in the evolution of relations between businesses and consumers. The first stage, before the Industrial Revolution, was one-to-one transactions between artisans and their customers. Then came the era of mass production and mass markets, followed by the segmenting of markets and semi-customization of the buying experience. With companies such as Amazon able to collect and control information on the entire experience of a customer, the math house now can focus on each customer as an individual. In a manner of speaking, we are evolving back to the artisan model, where a market “segment” comprises one individual.”

What does this mean for B2B? Understand, embrace and get personal.

Personalized B2C experiences have created expectations for prospects in B2B environments, and require sales representatives adapt their selling approach.

Many people would assume B2C transactions are more personal and made with more emotion than B2B transactions. A recent report by Google and the Corporate Executive Board indicates the opposite may in fact be true:

Below, Figure 9 shows B2B customers are actually more emotionally connected to brands than B2C customers.

Digging deeper, the high level of emotionality in B2B is not so surprising. B2B purchases entail personal risks—far more than most B2C purchases. B2B purchase stakeholders fear:

  • Losing time and effort if a purchase decision goes poorly,
  • Losing credibility if they make a recommendation for an unsuccessful purchase, and
  • Losing their job if they are responsible for a failed purchase.

Moreover, the more personal risks a purchase entails, the more emotional buyers feel—and the more they attach to brands that can provide value and eliminate risk (Fig. 10).

B2B purchasing decisions are personal, and sales representatives need to treat them that way by connecting with customers on a deeper level. Messaging and marketing need to speak directly to the person, instead of to the company. Sales teams need to know their customers as more than numbers and entities, and create content that is compelling, relevant and valuable.

Successful B2B sellers ignite the business, financial and personal pains of their buyers – and it’s that personal pain threshold that matters most. Because the process is emotional, building value-based relationships needs to be prioritized over selling. Value-based relationships are predicated on providing valuable insight, expertise and solutions that focus on the customer’s specific and unique needs. Through these relationships, trust is built and sales teams are able to better understand how to serve their customers. Sales representatives should work to create a memorable and valuable experience their customers are not receiving from any other company.

Personalizing strategies often requires investing in necessary go-to-market approaches that allow companies to create customer profiles (aka buyer personas), where they are able to track each customer’s journey individually. For B2B sellers, this personal engagement isn’t going to be a luxury much longer; soon it will be expected. This shift requires sales executives take a step back to a time to when serving the customer was their first priority.