There’s a lot of talk about aligning sales and marketing. I’ve given speeches on the topic and have written numerous posts. Company executives know it’s an issue, but what are the costs associated with misalignment?

If our car is out of alignment we know that the tires are going to wear out faster; we are more in danger of the car wandering out of our lane into on-coming traffic; the ride isn’t as smooth; and the car is harder to steer. We know the cost of replacing tires and in our mind we can calculate the risk of an accident. That’s pretty easy.

But, what is the cost if a company’s revenue engine is out of alignment? Believe me, it’s costing you more than a set of new tires.

I want to open this discussion up and let the ideas flow. I have a thesis. I think most companies have been driving in a misaligned state for so long they are settling for sub-par results and resigned to trying to solve the problem. Misalignment is the default situation in most B2B companies.

Here is an excellent reason why an outside executive serving in an interim manager capacity at your firm, or as a consultant is best able to get you out of the rut. They bring objectivity and the knowledge that there is indeed gold at the end of the rainbow.

What is the cost of misalignment? If, as business managers, we can’t put a number to the cost we’ll hesitate to invest in a solution, and that is the way it should be.

Here are a few areas in which misalignment is costing your company.

1. Low conversion rates – your proposal to close ratio is static or falling. Research has shown that misaligned companies have a lower conversion rate. What would be the impact if you reduced your cost of customer acquisition by 10% , 20% or more?

2. Missed revenue forecasts – unpleasant budget surprises at quarter end when actual sales are significantly below budget.

3. Lost customers – research has shown that misaligned companies are not as good at keeping and growing profitable customers. What is the lifetime value of a customer? If you lost 10% or 20% fewer customers each year what would than mean to the top line and bottom line?

4. Slow reaction to market dynamics – when marketing and sales have difficulty agreeing on direction and tactics there are delays in action; opportunities are missed. What is the value to you in beating the competition to a market opportunity?

5. Internal strife – It’s not fun or productive to work in a company in which marketing and sales are at odds (or at war). Soon egos and politics rule the decision making rather than a focus on progressing buyers through the sales funnel. The cost here, besides low productivity, is employee turnover. What are your recruitment and training costs in sales and marketing?

6. Do-overs – programs are often created and never implemented because there is disagreement about what should be done and how. What is the cost of programs that never see the light of day, or what is the cost of do-overs?

7. Loss of momentum – the most effective revenue generation plans are those that have coordinated strategies and tactics where sales and marketing are pulling forward together. A dog-sled team is a good metaphor. When the dogs are running out of step or in different directions the sled is not going to progress at optimum speed.

Those areas will give you a start. I’m sure I’ve overlooked a few. Once you’ve identified the cost areas you’re ready to get out your calculator and compute what the chaos is costing you.

Give it a shot. Bring out the calculator, look at your current financial statements and budget. Don’t be shocked if the total cost is 5% or more of your total sales and marketing budget.

Think small if you like. What would a 5% improvement in any area look like? Think big. What would a 20% improvement in any area look like? What would a 5% improvement in all areas look like?

I look forward to reading your comments and sharing more on this topic soon.

Chuck Besondy is a principal at One Accord Partners and is co-author of Leadership on Demand: How Smart CEO’s Tap Interim Management to Drive Revenue. You can read more about Interim Sales and Marketing Management by Chuck Besondy at his blog The Sales Funnel Fanatic.

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I was speaking with an executive the other day who repeated the concerns of her management team that their existing market was too small to sustain their growth.

Expanding into new markets may look enticing, but there are large risks and costs associated with this strategy. As it turned out in this case I was able to show the company that their market was large enough to provide growth opportunities for the next 3 years.

A little back of the envelope math indicated a bleak picture at first. Considering the size of their available market and their current conversion metrics for demand generation they simply couldn’t reach their revenue target. They were burning through too many prospective buyers and before long every prospective customer in the market will have been contacted and perhaps even placed into their sales funnel.

Their conversion rates were respectable, too. Only incremental improvement could be expected. It was when I asked about buyer recycling (lead recycling) that the answer started to emerge.

Many marketers and salespeople put all their energies into generating leads and working to progress these buyers through the funnel. But, a percentage of buyers always leak from the funnel at every stage. If your conversion rate at one stage in the funnel is 40%, this means 60% have leaked–they haven’t progressed. For whatever reason they weren’t willing or able to move to the next stage in the funnel at that time. Later a portion of these leaked buyers will be ready to re-engage with you (if you let them).

Sadly these buyers who leak for whatever reason are frequently forgotten by marketing and sales.

The company I was speaking to wasn’t actually ignoring their leaked buyers, but had a procedure in place to follow up with leaked buyers every 6 months. Ah-ha!

Using a sales funnel calculator from MathMarketing (click for lite version of this calculator) I was able to show the company that by recycling their leaked buyers at every stage after 4 weeks rather and after 24 weeks they’d need 7,000 fewer fresh names over a three year period.

This meant the market was large enough if they could execute effective marketing and sales strategies for recycling the leaked buyers back into the funnel–certainly a much easier and less risky proposition than expanding into new markets.

This article can also be viewed at Chuck Besondy’s blog, The Sales Funnel Fanatic.

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There are a host of pains organizations inflict on themselves that present clear and present dangers to their very viability. Among those we often see are:

• Goals and objectives that are out of sync with job descriptions and employee expectations

• Compensation plans that don’t reflect the will of the organizations executive leadership

• Management who believes it is their prerogative to manipulate sales compensation plans, changing quotas, territories and commission schedules mid-stream

• Sales automation/CRM systems that are installed to provide management reporting with sales productivity as a by product

• Few understand the complicated nature of channels, how to avoid conflict, and how to motivate organizations they don’t own, yet many businesses just can’t grow organically fast enough. Effective committed channels are a necessity.

So what can companies do?

• They must learn to hire for a season. Recognize that a significant percentage of employees will move on within a few years. Call it out confront it and embrace by designing the job description accordingly, and eliminate confusion and contention. Hire the very best for the tasks at hand. It’ll require a bit more thought and planning, but it’ll be worth it.

• Dedicate themselves to serving their employees and to making them successful; not managing them for compliance, rather leading them for significance; leading them rather than directing them

• Embrace technology. Many managers are digital immigrants leading digital natives. They resist it and demean it with comments like “I’ll never text”. We must immerse ourselves in it, admit our fears and frustrations, and join the ranks of the next generation who takes all this technology as a matter of fact and can’t understand why their management doesn’t.

• When we employ systems we must think first of the impact on the employee. Implement a CRM to make the sales people more productive, and have management reports as a byproduct. It’s the only way they will embrace it and the data will be accurate and timely.

• Hire scientifically. Success at a previous company is no guarantee of success with the next. It can no longer be acceptable to give an employee 9 months or longer to see if they will succeed. Thai’s as much as 1/3 of their tenure. They must be positioned to contribute much quicker.

• Build support tools like the company web site that personalize the web experience, allowing the inquirer to truly understand how your products and services can met his unique needs, and build it a way that leaves a thumb print behind so more and more can be turned into customers. It’s not the number of web hits that counts, it’s the number of customers that are generated.

• Have a mission statement that is meaningful, measure ideas against it, reward innovation, and create the opportunities that demand transformation versus incremental improvement.

• A soft economy can be the best time to gain market share. It’ll take a non-traditional approach, but embracing a win/win mentality, a servants heart for employees success, an acceptance that each employee really wants to make the best decisions possible, combined with an ability to accept effort and failure will help turn a business, even where the economy is having a negative impact, into a consistent winner.

Michael Pearce is an experienced interim management executive and has worked with several leading companies such as Citicorp, Boeing, Weyerhaeuser, Singer and EMC. His expertise is in building high performance sales teams and generating revenue and margins with repeatable, dependable, and predictable results. You can contact Mr. Pearce at michael.pearce@oneaccordpartners.com or at 425.830.4156. He also blogs at http://michael-pearce.blogspot.com/.

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Too many organizations have limitations put on themselves by themselves, by their culture. We have a process, we have an integrated program, that we work with organizations to develop their culture so they can reach their potential. Let me give you an example. One of our clients has a union management situation that has developed over years and years. Didn’t get along. They really looked at how they could limit each other, not let someone get the advantage. In our program, we come in, we address the culture, we work at the individual level, we work at the senior leader level and we get folks not to limit, but what’s the potential they can reach, what can they do beyond themselves to take their company to new heights they haven’t reached in the past. That’s exciting because that’s what really takes revenues forward, not in small increments but in very big increments. It’s also what transforms organizations so they go forward in a lasting and meaningful way.

Dale Hintz, is a highly organized, strategic and creative executive with expertise in product research/development, price optimization, market segmentation and mapping brand strategies. He can be reached at 972.824.6923 or dallas(at)oneaccordpartners.com

The revenue funnel isn’t the sole domain of sales or marketing. CFO’s should be as familiar with their company’s funnel structure and metrics as any sales executive or marketing executive. Here’s why.

1. Funnel modeling tools provide the best way for marketing, finance, and sales to talk the same language during planning and reporting.

2. The variables of the funnel make up the actual metrics of the revenue engine. These variables are the levers and dials over which management has control.

3. The funnel, over time, enables the sales forecast to be made with higher and higher degrees of accuracy.

4. Requests for more resources from Marketing and Sales can in part be justified or refused based on funnel economics

CFO’s should be trained in the use of sophisticated funnel modeling tools right along side their marketing and sales colleagues.

An excellent source of this training is the FunnelAcademy(tm), which includes comprehensive training on sizing a funnel and measuring progress. It also includes the most robust funnel modeling tool I’ve ever had the pleasure to use.

Chuck Besondy is a principal at One Accord Partners and is co-author of Leadership on Demand: How Smart CEO’s Tap Interim Management to Drive Revenue. You can read more about Interim Sales and Marketing Management by Chuck Besondy at his blog The Sales Funnel Fanatic.

In case you didn’t notice your customers are buying differently today than they did last year. The differences could be subtle or obvious, but if you observe closely you’ll see that the process they follow to make a buying decision–the buyers’ journey’–has changed.

If your selling process and sales funnel structure haven’t adapted to the buyers’ journey the efficiency of your sales and marketing efforts will be down and so will the accuracy of your revenue forecast. This is what I call the new “Funnel Economics”.

Here are the major variables in a sales funnel (which I am now going to refer to as the revenue funnel because it should be co-owned by marketing and sales).

1. Stages of the buyers’ journey
2. Lag time between stages
3. Leakage rate at each stage
4. Advancement rate at each stage
5. Number of meetings required in each stage
6. Number of meetings that each sales person can expertly handle in a week
7. Number of available sales people
8. Average revenue per order

Any change to any of these variables has an impact on how many deals get closed in a period of time. The marketing and sales effort required to generate a level of revenue last year is very different from what it takes this year.

If you’re still trying to plan and forecast based on last year’s funnel structure, you’re not just flying blind you’re flying with the wrong instruments.

Reset your revenue funnel by analyzing and observing the customer’s current buying process and behaviors. Dial in the new metrics into your revenue funnel and monitor carefully over the next several months. The accuracy of your revenue projections will improve. What’s more, you’ll have a more realistic preview of what type and level of activities are necessary to achieve a certain revenue outcome.

Chuck Besondy is a principal at One Accord Partners and is co-author of Leadership on Demand: How Smart CEO’s Tap Interim Management to Drive Revenue. You can read more about Interim Sales and Marketing Management by Chuck Besondy at his blog The Sales Funnel Fanatic.

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The famous McDonald’s restauranteur, Ray Croc, used to say “There is no competition”. What he meant was that we can’t blame others for our failure with customers (I would add children or spouses as well!)

Some years ago, Rockefeller Corporation did a study which asked, “Why do customers leave companies?” Their findings, in David Letterman bottom-up style:

• 1% – The customer dies.

• 3% – The customer moves away.

• 5% – The customer has a friend who provides the service.

• 9% – The customer is lost to a competitor.

• 14% – The customer is dissatisfied with the service.

• 68% – The customer believes you don’t care about them.

So what is the opportunity here? Just ask:

1. When was the last time you “touched” your best customers with a special VIP offer?

2. How about your “medium” customers with an up sell or a product line extension?

3. And rather than kick your worst customers to the curb, how can you monetize that relationship (and recoup your investment) by finding a strategic partner for whom those customers could be bright new sources of revenue?

As P.T. Barnum said, “There’s a customer born every minute”!

Paul Travis is an interim marketing executive at OneAccord. Mr. Travis is based out of Seattle with 25 years of experience in high technology, marketing, and consulting. He can be reached at Paul.Travis(at)oneaccordpartners.com and at 206-910-2222.

Experience has shown that revenue challenged companies rely much more on demand management than on demand creation to generate sales revenue typically resulting in an unbalanced 80/20 split.

Companies with an unbalanced and unpredictable revenue stream need to ask themselves the following question: Where do we want our sales revenue to come from? When applying conventional wisdom, the answer to the question can be found by identifying your company‘s —ideal client profile“ or those clients most likely to receive significant value purchasing your product and/or service based on the alignment of qualifying characteristics and attributes between your company and the prospective client. However, going a step beyond conventional wisdom and applying biblical wisdom can help you identify not only your most profitable clients but also your most sustainable clients. The biblical wisdom referenced is found in the book —Beyond Babel“ by Gerald R. Chester, Ph.D. regarding the biblical principle of equal yoking specifically related to C4 to identify your —ideal C4 client.“

Since most companies typically do not select their clients, it is even more difficult to find C4 clients. The components of C4 include a company‘s:
1. Calling
2. Character
3. Capabilities
4.Commissioning

Calling Speaks to the heart of the company.
Will your value proposition bring lasting value to the prospective client?

Character Is the accepted worldview of a company.
Does the prospective client‘s company values and operating principles align with your company?

Capabilities A company‘s ability to assess the value proposition.
Do your services and/or products facilitate the successful completion of tasks or business challenges that can‘t be effectively addressed by your prospective client?

Commissioning The external invitation and permission to speak into a client.
Do you have the affirmation and confidence to fulfill your client‘s needs?

In conclusion, the alignment of C4 between your company and your prospective client(s) will not only help establish your most profitable C4 relationships but will also build a sustainable and predictable revenue stream

Need help growing revenues? Contact an interim marketing executive today at info@oneaccordpartners.com or visit www.oneaccordpartners.com.

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It was a familiar feeling that I was all too used to. That feeling of getting ready to attempt to perform a death defying feat in front of a crowd when I had little or no confidence in accomplishing the feat. To make things worse the crowd was my peers, my fellow sales executives and my clients. What I was facing was that formidable act of teeing off with a driver to start the company golf tournament. To make matters worse we were playing this tournament at one of the most prestigious golf courses in the country and I had no business attempting to execute a descent tee shot with a driver. I was conflicted with the knowledge that I knew I shouldn’t be attempting this shot with the driver because my ability to execute a good golf shot had been proven to dismal over my many years of golf the length of the hole was so long that the only way to get to the green was to use the club that provided the longest shot available. The result was the same as most of my other attempts at using a driver on the tee, I duffed it.

Now what does this pitiful golf story have to do with the title of this article? It is because all successfully selling engagements result with a specific problem being solved in such a way that provides such as unique set of value that the client is willing to pay what the product or service is worth. If the problem is solved through a unique or one of a kind selling/buying experience the client may pay list price.

Now back to golf for a moment. My problem was my inability to successfully hit a driver from the tee and was so acute that it had destroyed my confidence as well as took to joy out of playing golf. Notice that I said it was, not is my problem any more. How did I solve this problem? You are going to laugh but it was just this simple, I got a new driver. The new driver solved my problem due to the much larger club head and higher degree of loft and the combination of these two components solved a 20 plus year problem, it was that simple.

Once again what does this have to do with Rapid Revenue Acceleration in your business? After 23 years in your industry I have concluded that more is not better. What I mean is that more is not better when it comes to more features, multifunctional capability, finishing or software programs. What this proliferation of features has created is a focus on the bells and whistle of such features instead of solving business process problems that exist within ever business you encounter on daily basis. Your customers want solutions to their problems. They don’t want your bells and whistles. The fastest method of achieving Rapid Revenue Acceleration is to become very simple minded in your daily selling efforts. Become an expert at discovering the problem; look for the obvious and you may find that the solution to their business problem (not their copying, printing for faxing problem) be as simple as buying a new driver.

Now how to do that in an industry that demands your mind share and constantly pushes the requirement to sell features instead of becoming intimate with specific business problems. Instead of becoming an expert at the bells and whistle of your wizbang document delivery device, become an expert at discovering the most significant problems in your clients document delivery processes. This is not to say that you can go about selling your products or services without any product knowledge but don’t spend your time trying to sell features from the start. I know your industry well enough to know that you have an over abundance of product expertise available to you through your vendors as well as your professional or technical services staff. What you need to do is invest your time discovering the business process problems and quantifying them in terms of the negative impact they have on the organization whether that impact is a slowed down production process, a delay in billing, delivery of documents to the wrong client or a document production process that is riddled with error.

Here are 5 quick steps to get you on the right track in every sales engagement.

1. Locate 3 to 4 departments inside the organization where the money is handled or revenue is the core focus.

The most common departments where this is a priority are finance (accounts payable, receivable, credits, buyer financing) executive (reporting on the production and retention of revenue), production (producing what they sell), delivery (proof of delivery to start the billing process), warranty (credits and debits), and sales/ecommerce (the speed and accuracy of processing sales orders). Submit a request to your main contact to set up a brief interview with the department manager regarding his/her satisfaction with the current document delivery process that exists in his/her department.

2. Ask them to rate their satisfaction of their current document delivery system on a scale of 1-10 with 10 being perfect.

The answer to this question will determine if you should invest additional time with them or not. If they answer a 7 or above, go find another manager to interview. If they give a rating of less than 7 ask them what would have to be different for them to give a 10. Record their answers and then request a 45 minute meeting to further discover the impact of those missing pieces to the puzzle that makes up a perfect 10. The statements they make about what would have to change to make a 10 are from hereon referred to as EIOP indicators or “Economic Impact of Processes” indicators. In most cases you will find 1-3 EIOP indicators with how documents are delivered that could be solved by one of your solutions. Ask them to rank the priority of the EIOPs based on the amount of money it would take to fix the problem as well as the amount of company resources they would have to invest to fix it. Assure them that you will need only 45 minutes and then hold yourself to it.

3. At the meeting start with the number one EIOP he is concerned with and ask them to describe how the deliveries of documents are involved in the business process that needs fixing.

Make sure that you quantify the impact in terms of the problem’s context such as lost income, lost revenue, delayed production etc. The problems must be specific and measurable like dollar amounts; hours of lost production time and lost orders and they must mean enough to the decision maker for them to sponsor your solution up the line of command. He will stake his own reputation on your negative findings and your solution so make sure it is accurate and meaningful to the company.

4. Ask them if they could have access to a solution, would they be willing to pay the same or more than they are already paying for the insufficient services they are receiving now.

Their answer is the first indication whether they believe they are receiving unique value or not and if it is yes then you are on your way to a highly profitable sale. If the answer is no then go back and find out why they won’t and the answers will provide the roadmap to the sale. Another possibility is that you are at the wrong level of decision making and need to find another contact to present your findings and solution.

5. Once you have a commitment that they want to solve the problem and will spend the money to solve it, assembly your support team (product specialist, manufacturers, professional and technical services) and review the findings of your EIOP meetings.

Make sure that you don’t let quotas or personal agendas of your team influence the recommendation because if you do you will likely lose the engagement to a competitor (traditional or non-traditional) whose sales model is solution driven versus product or quota driven like your business. Be especially careful of software providers (VARs or business process integrators) as their sales model is grounded in business process problem discovering and creating a solution instead of selling a product.

If you use these 5 steps as a guideline you will create a competitive advantage, improve your focus, deliver what customers want by discovering real business problems and create solutions that speed up the buying cycle. Implementing these steps can improve your conversion ratio of leads to sales much like the purchase of a new driver did for my golf game. In addition to providing a much larger sweet spot and greater loft what my driver has done for me has allowed me he the confidence to swing naturally and the result is that I feel more relaxed and confident at the tee so much that my last tournament included a drive nearly 300 yards long, straight down the middle. My hope is that you will achieve similar results in your daily selling efforts, good selling!

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Yesterday’s breakthrough became today’s baseline. And today’s successes will automatically set tomorrow’s expectations. Welcome to professional sales.

The name of the game is “compounded growth.” It’s a relentless game – like never having quite enough meat to feed a hungry lion. He’s just never satisfied.

Enter the sales manager – the person tasked with the unenviable responsibility of delivering acceptable, sustainable Sales results. This is the lion keeper, tasked with placating the hungry lion, usually from inside the cage.

Since the success of most Sales organizations is measured primarily by their team’s sales-growth rates (either in numbers of new accounts or gross sales revenues, or both), the natural response of many Sales managers forms reactively… to “drive sales” – any sales – to make the numbers.

Most sales managers have also been taught that the best way to motivate their team is to simply divide the total stress (required numbers) up between sales-team members, and then send them out to take their designated hills. Hopefully the sum of the individual contributions will meet the team’s required performance, sometime before sunset. Often it’s a tense day’s-end.

Here’s the harsh reality of running the numbers alone. Focusing primarily on top-end production assumes that all sales are “good” sales. This practice amounts to buying time in Sales, by shifting your stress on to Operations and Customer Service – both of which are now tasked with delivering “not-too-displeasing” products or services, to often “too-high-expectations” customers.

So what’s a “good” sale? Of course, “it depends”. Generally, in simplest terms, a “good sale” succeeds in four ways:

1. A “good” sale establishes accurate customer expectations,

2. According to what Operations and Customer Service can actually deliver successfully (“above customer expectation”),

3. For a competitive price,

4. Resulting in a profitable, per-unit transaction for the seller.

What’s a “bad” sale? In simplest terms, a “bad” sale is one that fails to deliver on all four of these success factors at once.

OneAccord’s unique Revenue Acceleration model digs down beneath the initial question of how best to increase sales, to these (and other) deeper questions.

We sometimes describe it as analogous to improving the performance of a Sales racecar. Rather than OneAccord just jumping in the drivers’ seat and running Sales harder and faster than the prior driver, we begin by lifting the hood. We’re looking first, to validate and improve:

1. The power and efficiency of the racecar’s profitable business engine (offering’s business model and strategy),

2. The transfer of that growth power to the wheels through the transmission and drive train (strategic marketing), and

3. The rubber that meets the road – often at the limits of it’s performance-potential and under variable environmental conditions (sales culture and sales-force competency).

Only when OneAccord and our clients are satisfied that the Sales machine is ready to race, can we then coach the current-driver and racing-team to world-class operational success. Interestingly, we almost never find ourselves in the driver-replacement business. Why? Because we usually find that the Revenue Acceleration issues weren’t driver-related in the first place!