Portcos need to grab market share, hopefully while leveraging a first-mover advantage and an economic rebound. So, investing in stronger go-to-market (GTM) capabilities will be key, but which ones?
Alexander Group’s PE Insider Roundtable: Optimizing Portco GTM took on this question. PE leaders discussed Alexander Group’s latest GTM research and settled on four essential portco growth tactics.
Part 1 of this 2 part series covered the first and second essential growth tactics. This Part 2 provides insights on the third and fourth strategies.
Alexander Group client CEO: “2020 resulted in the largest pilot of Inside Sales in history, and it passed with flying colors!”
With COVID came the rise of inside sales, by necessity. The good news was that inside sales did very well, much better than expectations. The bad news was that inside sales performed pretty poorly at some sales motions. There were two big problems: portcos repurposing field reps without changing their field-centric motions, and deploying a universal inside sales role to do everything. Essentially, there are at least 10 types of inside sales roles, including: buyer development, lead-gen, lead-qual, solutioning, persuading/closing, implementing, customer success, customer service, and account management, all requiring different process, skills, targeting, and support. When portcos simply repurpose lead-gen reps as inside sales solutioners, or customer service reps as customer success manager, they typically just end up driving costs faster than revenue. However, as some portcos demonstrated in 2020, deploying the right inside sales roles for key sales motions drives down costs, increases sales capacity, and accelerates growth across new and old buyers.
Deal Partner: “My experience is that without aligning sales roles and comp, the growth strategy will probably fail.”
PE leaders’ rated helping portcos align roles and comp to growth strategies as 8/10 on the importance scale. And they’re right. For example, without adequate pre-sale support, reps today can see their actual selling time fall well below 20%. And, if they do get a call with a new buyer, they often lack the skills to pull it off without enough specialist support. It’s clear that the lack of a well-crafted sales support model will significantly constrain many portco growth strategies.
Similarly, if the sales compensation plan doesn’t explicitly support the growth strategy, growth will fall short. For example, portcos often introduce new products while still paying all products equally. But, since new products are often harder to sell and/or require getting to a new buyer, many reps don’t try too hard. It’s as if the portco is asking its reps to fund the new product beta launch out of their own pockets! Many portcos take two years to identify and fix that constraint.
Using a structured sales compensation design process is key to successfully balancing trade-offs and feasibility. For instance, portcos typically need more pay-for-performance energy in their comp plans but also need reps to collaborate with support, specialists or channel reps. Smart plans drive this balance using pay mix, measures, mechanics and pay curves, without over-complication. But portcos need to avoid “optionalized” menu plans that provide little predictability, scale or clear ROI.
Overall, the PE leaders in Alexander Group’s PE Insider’s Roundtable concluded that more in-depth GTM planning and execution is key to portco success and increasingly so going forward. Specifically, GTM capabilities including growth segment identification/quantification, buyer journey management, upselling and cross-selling, deploying the right inside sales roles, and aligning sales roles and compensation with growth strategies are crucial in today’s hyper competitive portco markets.