We’ve noticed that many entrepreneurs, CEOs CMOs and CROs have candid discussions on how to increase the performance of their sales and marketing teams. There are six primary mistakes that will retard your ability to create high performance sales and marketing results that would otherwise drive revenue and profits.
1. False beliefs about how your company makes money
Many B2B companies think that 3-5 percent of their client base produces over 60-80 percent of their revenue and profits. In reality 10-50 clients produce almost all of their revenue and profits. Instead of embracing this fact and using it as a strength, many companies focus their energies elsewhere creating a tremendous risk. How many clients produce 80 percent of your revenue?
2. The consequences are not clear to the management team or on the board level
What would happen to your company if you lost 3 or 5 of your top clients? For many it would be unthinkable. Many companies just have 5 top clients. What would be the consequences for your company? Very few companies have clear, committed and actionable individual business plans for their top 50 clients – plans where sales, marketing and operations are aligned and work together with assigned resources.
3. The concentration risk is often handled with increased risk
If 3-5 percent of your client base is producing over 60-80 percent your revenue, it’s easy to freak out. What often happens is that many companies have an emotional, fear-driven way of dealing with the situation. The result is that they focus less on their top clients, thereby increasing the risk that their top clients will be neglected. Instead they run towards B and C clients and new business. How well do you handle concentration risk?
4. You have too few partner clients with a high share of wallet
Many companies are pretty bad at producing partner clients. A partner client is a client where your company has succeeded with positioning, cross-selling and share of wallet. They are in a long-term partnership with you where your company is solving important problems for them. How well does your company produce partner clients?
5. Top management does not believe in marketing and branding
Hypercompetition is created from globalization, innovation and automation. In order to succeed, there are only two positions to compete on: price and value. If you want to compete on value, how you brand, market and sell will be some of the most important aspects of how you win business. Top management often does not understand that as long you are dealing with human clients, they will have emotions and they will not act according to logic even when they think they are doing so. They will act based on emotions and motivate based on logic.
6. Salespeople are not ready to become trusted advisors
It’s very clear that selling is changing. Gartner is predicting that 18 million salespeople will be out of a job in just a few years. This is partly because selling has become automated, but partly because it’s getting more complex.
The solution: Win bigger deals smarter.
The solution is not a one-size-fits all bathrobe. But in many cases it involves these six elements:
- Change the mindset of the leaders in your company
- Build your top clients into loyal fans before you focus too much on other segments
- Transform existing clients into partner clients with high share of wallet
- Build your company into the thought leader brand in your industry
- Focus your marketing efforts towards your top existing clients, existing clients with top potential and potential top clients
- Train or hire new salespeople to become trusted advisers and experts