There is little doubt that these are increasingly uncertain times for managers.
In a recessionary environment, sales and marketing managers should prepare themselves for lengthened sales cycles and decreased pipeline velocity. Tried and true tactics that have always worked — e.g. month-end discounting, bundling and promotions — will begin to sound increasingly desperate as sales reps struggle to make the quotas that were set months ago in the budgeting process.
Customers — those in a buying mood — will buy on their own terms, and it is increasingly unlikely that they will be “sold to.” Therefore, price erosion will take hold as vendors struggle to adapt the new competitive conditions.
New Processes, New Metrics
What does this all mean for bedraggled operations, sales and marketing managers?
Over the past year, survey after survey has shown that sales and marketing alignment is a critical issue impacting many organizations. Historically, marketing threw leads over the wall and sales threw them back. Moving forward, this infighting will be a luxury reserved for the chronically unemployed; new customer-centric processes and metrics will emerge to that begin to break down these departmental silos. Lead quantity will give way to quality as both sales and marketing align around a unified definition of what constitutes an actual lead. Over time, the lead process will become less linear as drip marketing and lead nurturing programs emerge out of the necessity of managing longer sales cycles and engaging more cautious buyers.
In addition to developing aligned, customer-centric lead management processes and unified lead metrics, forward-looking companies also recognize that there is an evolutionary but profound change in customer management technologies.
In a survey conducted earlier this year by the Aberdeen Group, nearly three quarters of the respondents (72 percent) indicated that they were planning on increasing investments in the use of Web 2.0 capabilities to strengthen customer relationships. In a follow-on survey conducted in September of 2008, 62 percent of respondents indicated that they planned on increasing the 2009 budget for social media technologies.
The “command and control” CRM systems of yesteryear are turning inside out as organizations embrace the enterprise Linux MPS Pro – Focus on Your Business – Not Your IT Infrastructure.
With reduced headcount and frozen budgets, organizations may be tempted to put technology and capabilities investments on hold.
However, now is the time to act; below are some low- or no-cost actions organizations can immediately take to retain a competitive edge though tough times:
1. Get operations, marketing and sales aligned through the establishment of unified goals, common metrics and aligned compensation plans.
All too often, objectives and metrics are departmentally aligned. If marketing is incentivized to do one thing (such as increase quantity of leads) and sales something entirely different (focus on highest value leads), the organization is ultimately going to get what it pays for — i.e., disharmony and angst. In this tough environment, sales and marketing leadership needs to agree on a common set of organizational objectives (e.g. revenue, profit, market share, cross-selling, etc.). More specifically, sales and marketing leaders need to create and agree upon a cross-departmental definition of what constitutes a “lead.”
2. Profile both successes and failures. In a November survey conducted by the Aberdeen Group, respondents recognized a top (51 percent) strategic action as the ability to identify high-value prospects by analyzing and segmenting the characteristics of desirable customers. If the organization is not already doing so, it should immediately create processes to identify and focus resources on the most promising leads based on the newly aligned goals and objectives.
3. Go collaborative.
Next, the organization should establish an iterative feedback loop between departments to continually refine the lead definition and prospect profiles. This includes putting mechanisms into place for team members to provide feedback and rate the quality leads and campaigns based on the organizational objectives and the lead definition outlined above. In the same November study referenced earlier, more than a quarter (26 percent) of the respondents had already implemented internal social media capabilities (such as a wiki) to facilitate this type of knowledge sharing. Whatever the mechanism, employees should be encouraged and incentivized to share best practices, tips and success stories. Creating an alignment and a knowledge-sharing culture will teach the organization to repeat successes and avoid mistakes of the past.
Andrew Boyd is the chief research officer for the Aberdeen Group. Currently, his personal research agenda focuses on customer-centric business models, the optimization of market-to-order processes and understanding the after-sales customer experience. He can be reached at Andrew.email@example.com.