As SiriusDecisions looks toward the year ahead, we have identified critical planning assumptions for sales, marketing and product functions
SiriusDecisions has released more than 75 planning assumptions for b-to-b organizations seeking to maximize their performance in 2019. In this issue of SiriusPerspectives, we excerpt several of these planning assumptions, including their implications for sales, marketing and product leaders.
According to benchmark data from the SiriusDecisions Command Center®, 72 percent of organizations say their pricing ability is above average or best-in-class, yet only 8 percent of organizations indicate that they are maximizing the value of their offerings through their pricing and packaging approaches. Many product management leaders are driving the adoption of value-based pricing to fill this gap. As this shift takes place, the development and vetting of a value proposition – the promise of value to be delivered to a customer – has become much more than a messaging exercise. It has expanded to gather feedback on the economic benefits of the offering as a precursor for development, including the offering price.
Rather than having product managers consider offering development separately from value proposition development, product management leaders need to ensure that product managers get feedback from customers and prospects on the economic value of the offering. This work should be done in conjunction with portfolio marketing to ensure that the economic value is captured and reflected in the pricing model as well as the messaging and positioning.
SiriusAction: Ensure that product teams conduct value-driver interviews early in the product development lifecycle to understand and validate economic value. Provide upskilling, budget and support to ensure product managers can devote the appropriate time and attention to this important activity.
Most b-to-b organizations have struggled with the difference between the buyer’s journey and the post-sale customer lifecycle. In recurring revenue models, which are steadily becoming the norm, the evolution begins when organizations realize the importance of getting customer relationships off to a good start. This often results in the development of a structured approach to the first phase of the customer lifecycle, deliver/initiate, in which onboarding customers is a focus. While this shows definite progress, it can lead to troublesome trends. Organizations tend to bombard customers with uncoordinated onboarding content and interactions from multiple parts of the organization in a short period of time, confusing and overwhelming them. Additionally, this hyperactivity at the beginning can cause the provider to go silent after the initial onboarding step – because it failed to save enough content and interaction opportunities for the second phase of the customer lifecycle, develop/participate, in which customers increase their proficiency with the product or service.
SiriusAction: Define and formalize a strategy for supporting customers throughout the customer lifecycle, not just in the beginning of the relationship. By conducting cross-functional planning that coordinates tactics and communication responsibilities, organizations can ensure that progress made in the first phase continues into the next. Use the SiriusDecisions Customer Lifecycle Framework to understand the phases of the customer lifecycle from the perspectives of the customer as well as the organization.
While we frequently use the term “account” in b-to-b, the account is often not the true target that product, marketing and sales have in mind when they think about the buyer. To better represent buyers, SiriusDecisions has introduced the demand unit as a foundational element of the Demand Unit Waterfall™ – the newest member of the Demand Waterfall® family. Each demand unit represents an individual or – more commonly in b-to-b – a group of individuals who have come together to find a solution for a business need. A single organization may contain one or many buying groups that each has unique needs and business requirements. Creating a demand map gives product, marketing and sales teams visibility into the number and types of target demand units within a specific account or buying segment. The Demand Unit Waterfall can then be used to measure the progression of the targeted demand units.
B-to-b organizations have started to demonstrate that adopting the Demand Unit Waterfall drives efficiencies and alignment across the revenue engine and better accounts for the impact of specific demand approaches. A SiriusDecisions poll of more than 2,000 b-to-b sales, marketing and product professionals showed that 15 percent of b-to-b organizations are implementing or have implemented the Demand Unit Waterfall, while nearly 50 percent are strongly considering doing so as a means of better understanding their impact on target buying groups as well as identifying and cultivating revenue growth opportunities. Organizations that have already implemented the Demand Unit Waterfall are gaining better insights and an ability to target buyers in a more specific and relevant way.
SiriusAction: Determine whether the organization is missing important buying signals from potential buying groups in existing marketing data. Form a demand unit council that includes subject matter experts from product, sales and supporting operations functions. Start the council’s work by using the SiriusDecisions Buyer Audience Framework to define target market segments, buying centers, buying groups and personas. Next, define target demand with demand units and demand maps.
Marketing technology acquisition has expanded rapidly during the past six years. Marketing technology investment has doubled, fueled in part by dozens of emerging technology categories and vendors. Today, there is a technology category for every role and concern in the marketing department, which can result in a “kid in a candy store” situation where marketers are considering too many technology options.
Marketing operations leaders should critically assess their current marketing infrastructure and identify the most important technology needs. This means assessing the marketing organization’s business priorities and mapping them to the processes supported by the current infrastructure. By thoroughly analyzing any gaps that are preventing achievement of marketing’s goals, leaders can associate business requirements with specific technology selection alternatives.
SiriusAction: Position marketing operations as a technology coach for the entire marketing organization to ensure new technology investments are driven by marketing’s business requirements. Considering the roles of people, process and data in the marketing infrastructure, conduct a gap analysis to identify where technology is needed and help marketing counterparts apply the results of this analysis.
According to SiriusDecisions research, sales reps work on average 51 hours per week but spend only 13 of those hours engaging with customers. One of sales operations’ primary responsibilities is to improve sales productivity so reps can spend more than 13 hours a week selling. However, the root cause of productivity issues can be difficult to identify. Additionally, sales operations staffing shortages and pressures to meet near-term demands make it challenging for sales operations to devote time to research and prioritize productivity issues. There has been a growing trend of sales operations leaders turning to service providers to conduct annual sales activity studies on their behalf. SiriusDecisions conducts these studies for our clients and we’ve found that across all respondents, only 26.6 percent of sales reps’ time is spent selling to customers (the 13 hours referenced above), while 9.7 percent is spent talking to customers about escalations and other non-sales activity. Much of the remainder of sales reps’ time (36.5 percent) is devoted to preparing to engage with a customer (e.g. preparing proposals, searching for content), and the remaining 27.2 percent is spent on internal administrative activities. Only when sales operations leaders understand objectively how sales reps are spending their time can they formulate a plan to focus on the greatest sales productivity detractors.
SiriusAction: Sales operations leaders should conduct an annual sales activity study to assess how sales roles are spending their time relative to their peers in other organizations and identify non-core sales activities that represent opportunities for process improvement. Sales operations leaders should pursue process improvements and technology solutions to drive greater sales productivity.
Even best-in-class b-to-b organizations continue to struggle to establish channel partner programs that can support their channel strategies and growth objectives. In a poll taken during the 2018 SiriusDecisions Summit, more than 80 percent of attendees reported that both internal and external factors are driving the need for changes to their partner programs. Internal factors include partner and program performance in decline, a lack of profitability by tier, and stagnant or declining growth rates. External factors include a failure to measure up against the partner programs of competitors. Many partner programs have not adapted to expanded routes to market, hybrid partner business requirements and new techniques for driving growth and profitability. Channel marketing leaders looking to evolve their partner programs should use a structured approach that involves multiple functions throughout the organization (e.g. channel sales, portfolio marketing) to gather requirements and design the channel strategy and partner program.
SiriusAction: Before designing or modifying a partner program, ensure the organization’s channel strategy has been established and that channel readiness has been evaluated. Work with a cross-functional team to define program objectives, routes to market, partner business models and other foundational elements. On the basis of these inputs, establish the program’s structure, tiers, benefits and requirements, and define how its success will be measured.
The launch of a new offering often requires significant investment of resources and efforts across multiple functions. Misunderstood expectations and a lack of understanding about the purpose of the launch remain thorny issues for many organizations, causing misaligned efforts. Product managers might have overly high launch expectations for a release. Executives or sales might incorrectly position the new offering. Marketers might develop launch tactics without understanding the overall launch objectives. While comprehensive, detailed launch plans might be needed to coordinate marketing tactics and events, they are not the right vehicle to communicate a launch’s overall goals and target audiences to executives and other stakeholders. Portfolio marketers need to use a more concise format to rally executive, marketing, sales and product teams to ensure they share the same goals and expectations for an upcoming launch.
SiriusAction: Portfolio marketing should create a one-page overview that outlines key information about an upcoming launch. Identify the launch tier and audiences; summarize launch goals and objectives, offering highlights, and launch strategy; and provide a timeline of key milestones. Teams working on detailed launch plans can use this overview as a guide to ensure launch tactics support target audiences and business goals.
Planning for the upcoming fiscal year can be a daunting initiative for many b-to-b leaders. It’s easy to fall back on the tactics that were executed in the previous year, instead of considering new shifts in the market and insights on what’s working for other organizations. Each year, SiriusDecisions uses fact-based research and insights to develop annual role-based Planning Assumptions guides. Click here to access our guides!