Corporate Services leaders are shifting commercial priorities to achieve double-digit growth expectations in 2022.
Alexander Group recently surveyed corporate services executives for insight into their revenue expectations for 2022. Our research findings indicate that leaders were expecting aggressive returns earlier this year, but now face uncertainty in their search to capitalize on growth opportunities.
Industry Leaders Expect Double-Digit Growth For 2022
After a good growth year in 2021, but when only 45% of firms achieved 10% plus growth, corporate services leaders anticipate much stronger results in 2022. Median growth expectations reached 19% for 2022. While many leaders have backed off of this aggressive objective, others remain steadfast in sustaining high, double-digit growth in the remainder of 2022.
Recurring revenue will account for over 70% of their total revenue, requiring companies to focus on customer growth, technology innovations and high-performing sales roles.
The caveat: Go-to-market challenges remain. Nearly 15% of our respondents cited external factors, including decreases in market demand and regulatory changes, as ongoing issues. Pricing pressures and lack of sales enablement tools/technology were noted by 12% of respondents.
Sales process inefficiencies, lack of a strong value proposition and access to customer key decision-makers were also listed as challenges by a number of research participants.
Top Priorities Include Customer Retention and Acquisition
Aggressive growth expectations require reducing customer churn while acquiring net-new customers. Alexander Group research participants listed these top five focus areas to drive growth in 2022.
- Strategies to maximize customer retention and reduce customer churn – 24%
- New customer acquisition – 24%
- Increased usage and upsell of existing product offerings – 20%
- New product and service offering introduction – 18%
- Cross-sell of existing product offerings – 14%
The caveat: Meeting VOC priorities will determine success. Customers indicate that speed of delivery, trusted relationships and commitment to diversity and sustainability are more important than price. Achieving growth projections requires an intense focus on these priorities. Firms also saw improved support, quantifiable results and continuous innovation as the next-in-line needs.
Automation, Seller Turnover Remain Threats to the Value Proposition
Leaders are revisiting how to deliver on their value proposition in ways that are cost-effective and capture the advanced technology’s sales and productivity promises. Over half of leaders see automation as a primary threat to growth and are responding primarily by:
- Revisiting their pricing models – 21%
- Revising legacy service offerings (except RPA technology) – 18%
- Refining value propositions -16%
- Investing in service delivery efficiency – 14%
- Decreasing cost of delivery – 14%
- Enhancing own offerings with delivery automation technology – 14%
Automation investments are critical, as is evaluating the efficacy of current sellers. Research participants noted that their median sales expense to revenue was 11%, median marketing expense to revenue was 3%, but median seller turnover was 25%. Companies must evaluate their costs and how to control seller turnover in a tight labor market.
The caveat: Leaders must make targeted sales and automation investments. Companies are reviewing investments that will reap the benefits of technology. Currently, overall marketing spend is low, but companies are prioritizing marketing automation, AI/analytics and sales enablement tools.
In addition to technology, leaders are investing in specific roles that add exceptional value for customers. Top focus roles include relationship/strategic account managers, channel partner rep/managers, generalist sales reps, account managers and inside sales roles (hybrid and outbound). New business sales reps are less common but were still highlighted by half of the research participants.
Specialty and support roles are also highly valued and utilized. Sales operations and lead generation are top priorities, being cited as high value by over 70% of research participants. Post-sales relationship managers/CSM are used widely to maximize long-term revenue and customer retention, followed by industry specialist. E-commerce roles are becoming more prominent as close to half of companies actively and materially utilize them.
Are Your Expectations Aligned with Corporate Services Industry Leaders?
Corporate Services is a people-first sector. Industry leaders must make targeted investments to secure recurring revenue while aggressively acquiring new customers who demand alignment with their organizational priorities. Delivering on theses value propositions has never been more challenging – and rewarding.
High double-digit growth requires focused strategies and investments. Discover how your company compares to 50 top-performing leaders by contacting a Business Services practice lead or see how we can help.
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Author
Mike Burnett is a principal based out of the New York office. He works with clients across an array of industries, with expertise in business and professional services, healthcare, and technology. He has responsibility for leading the firm’s Business Services practice. Mike’s client work primarily focuses on go-to-market strategy, commercial model design and transformation, deployment, and sales compensation.
John Drosos is a principal in the Chicago office. He helps lead the Business Services practice. John has been with the firm since 2006 and brought with him diverse experience in strategy consulting, general management and technology consulting. John is a key thought leader on complex sales model transformations, global coverage strategies, productivity and analytics. He has also helped shape the firm’s talent recruitment and development practices, playing a key role in the rapid and consistent growth of our Midwest consulting practice.
