In this podcast episode, hear from Mike Burnett, principal at Alexander Group, on the latest trends in sales coverage, as well as a high-level approach to designing sales coverage models.
[00:00:02] Hello, everyone, and thanks for joining video number three of our series focused on go-to-market trends and mandates in Business Services. This is Mike Burnett, principal and co-leader of our Business Services practice alongside Dave Eddleman.
[00:00:15] As I mentioned, this is part three of our series focused on go-to-market trends and mandates. And in our last video, Dave walked through sizing the prize, offering a deeper dive on opportunity modeling by customer segment. In this video, I’ll be reviewing some of the latest trends and sales coverage, as well as a high-level approach to designing sales coverage models.
[00:00:36] It’s important to start by acknowledging that selecting the right coverage model is predicated on several upstream strategic elements. First, it’s critical to have a solid understanding of your addressable market opportunity by customer segment. This goes back to Dave’s video. Opportunity model is an exercise that is really helpful in terms of understanding where your most relevant and addressable opportunity resides. But it also helps inform what your go-to-market priorities and downstream sales targeting activities you should really be focused on. Second, you want to make sure that you’re able to clearly map your products and offer product and service offerings to each customer segment. But, more importantly, try to map your products and services to specific customer use cases. Many of today’s most successful organizations are shifting away from communicating what they sell and instead focusing on the use cases that they help customers address. Lastly, you need to make sure that you have a very compelling value proposition that’s going to resonate with customers and then make sure that we also have an appreciation for the different type of sales motions required to successfully deliver that message. We’ll discuss in a moment, but the complexity of a sale and the seller’s role within the sales process is going to be a major consideration to really the coverage model that you’re looking to deploy.
[00:02:00] So let’s double click quickly on this concept of sales motions. We typically see three categories of sales motions: sales fulfillment, sales advocacy and sales innovation. Each of which comes with a different level of expectation regarding a seller’s value add in the selling process. So what I mean by that? Fulfillment motions, those tend to be a little bit more transactional nature. Sellers are asked to accurately represent an organization’s offerings, present options that satisfy customers’ needs and then hopefully develop and maintain a customer relationship for as long as possible. Now that the expectations are, sellers start to increase when we move into advocacy and innovation sales motions. In Advocacy motions, sellers are asked to act as consultative sellers; offering advice, education, guidance, oftentimes offering ROI assurances in order to help guide a customer to making a purchasing decision. The bar only gets higher when we’re talking about sales innovation, where sellers are oftentimes at the forefront of helping to design or co-design a new complex, often bespoke solution for customers. So why is it important to recognize these two different categories? Well, oftentimes organizations are going to be asked to manage multiple sales motions given the breadth of their offerings. The reality is, in our experience, sellers oftentimes are only able to really specialize or be successful in one or two of these motions at most. So when you take the combination of those two realities, you have to be very thoughtful in terms of what are the different motions you’re trying to deliver and then making sure you have the appropriate roles and talent to successfully execute those motions.
[00:03:47] With that, let’s shift gears and actually get into discussing the ultimate goal of what any coverage model is trying to drive, which is profitable revenue growth. What you see on the screen here is a key framework we use that tries to simplify this discussion and break down revenue growth into its core elements. First, there are different types of customers or accounts that we can be targeting for revenue growth. For new customers, we want to make sure that we’re able to successfully identify them, be able to engage with them and then ultimately be able to convert them into customers. That’s what that identifying land motion that you see on the screen are really covering. Within our existing customers, we want to make sure that we’re able to drive really adoption or usage or clearly deliver value where customers are customers for life as long as possible. That adoption motion is really critical and an underpin to being able to successfully retain any spend, as well as expand our presence within any existing customers. So this framework is meant to lay out there are different elements of any revenue growth equation, and you need to make sure that you’re appropriately balancing each of these motions as part of your coverage model.
[00:05:05] Now, before we get into some of the specific trends that we’re seeing in terms of coverage investment, it’s really important to recognize two key drivers that have really influenced some of the changes we’ve seen business service organizations make to their coverage model. One is this concept of an elongated buyer journey or at least recognition of a customer’s buyer journey with more intent. Now, it’s really important to make sure that you appreciate customers are doing more exploration, more research and able to gather better quality information about your business and offerings well in advance of when they’re making contact with your sellers. So we need to be very cognizant of how we’re the information we’re putting out into the market as well as how do we try to engage buyers is really impossible within this buyer journey. Second, we’ve seen an adoption of growth of subscription and Pay-As-You-Go models, so this is putting a tremendous amount of pressure in terms of how do we make sure that we secure non-committed revenue, or future revenue. And how do we make sure that we are able to successfully grow beyond just whatever subscription or pay-as-you-go revenue stream we currently have in place. So these two dynamics have influenced and led to a fundamental shift in terms of where go-to-market resources are being deployed. There are two main areas where you’re seeing resources really increase. First is in what we’re identifying here as identify. That’s the pre-sale stage where organizations are putting more resources in place to engage with buyers as soon as possible in that buyer journey. The second area of investment is an increase in terms of the number of resources focused on trying to drive post-land retention and growth. So a combination of team members working to drive successful adoption or recognition of value that’s being delivered, as well as trying to retain existing revenue streams and drive for ultimately expansion and maximizing customer lifetime value.
[00:07:12] In our experience, this shift in coverage strategy has driven and has led to an increase in very specific roles. First, within the identify space, we’ve seen an expansion in terms of a number of business development or sales development, lead generation focused resources. Not a new function by any means, but certainly an area that we’ve seen dramatically expand in recent years. In addition to those business development resources, we’ve also seen more digital or web-based resources that are available to engage with customers early earlier in the buying process. Think of those webchat specialists that you’ll often see visiting a website. Those are popping up more and more to B2B settings, especially within Business Services, allowing for potential buyers or as folks are doing research and understanding what an organization provides, it’s an opportunity to engage and actually learn more about customers and what they’re interested in earlier in the process. The second area is focused on the post-land motion that I was describing before. So you can see this interesting chessboard of resources that are spanning adoption, expansion and retention motions. So in an environment that used to have account managers or relationship managers being asked to manage as many of these different columns on the chart, here are emotions. Now we see organizations shifting more of a team-based approach where account managers or sellers are collaborating with customer success managers or client consultants or renewal managers in order to make sure that we’re effectively covering each of these different motions that’s so critical to securing once again typically non committed revenue or subscription in future revenue streams for the business.
[00:08:59] A couple of key takeaways that I want to make sure you get from this discussion. First is, if you haven’t done it yet, make sure to map your buyer journey and then, more importantly, map your to go-to-market model to that buyer journey. Second, try to engage buyers as early as possible in the buyer journey. Meet them when they’re really doing that research and looking into and exploring organizations. Third, know that there continues to be increased specialization around presale as well as post-land resources. And then fourth, recognize that in that post environment, value, delivery and expansion, it’s really becoming a team sport. The days of a sole account manager or a relationship manager being responsible for driving all of those different motions, we’ve really faded away from that.
[00:09:43] That wraps up our third video in the series. Thanks again for joining. I hope you tune in next for our fourth and final video focused on trends and realignment of sales compensation.