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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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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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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What direction is best to build sales? Direct sales force calling on targeted accounts, or indirect via distribution or food brokers? Is there a way to assess situation before choosing one or more directions?

Great Question!

In short, an interesting strategy would be to blend both approaches. Specifically (1) in a market with a strong retail presence (high end…e.g. Norstrom) go with a direct sales model…the business volume will more than pay for the resources required; (2) in other “attractive markets” (…would need more info on your products and company to define) use a distribution channel model where you can be cost efficient by “piggy-backing” on an existing sales network….

Craig Lewis, Regional Managing Principal, Phoenix.
408.394.4514
craig.lewis(at)oneaccordpartners.com

Numerous scenarios are possible from this high level view and vary dramatically based on the type of confection. Here are a couple possible scenarios.

1. Both Direct and In-Direct via brokers have merit but require much more depth of information to recommend direction in this case. The primary issue will be the current cash position (or capital access) of the company. Direct sales organizations (especially when you have access to the talent) are my personal preference but require an up front capital investment. The key to success in such a venue is to hire people that have previous success and relationships with the target prospects. In-Direct is less expensive short term and can provide the instant relationship. The down side is you lose control of your brand and message.

2. Depending on geographic distribution, it is plausible that an in tandem Direct and In-Direct strategy are viable depending on distribution patterns and product make-up.

3. The key is relationships and finding a connection into the first, targeted account. The first one is gateway into the others.

4. Direct Response TV is an unconventional option if the product supports such an initiative. Building the brand first via alternative outlets is a prescribed plan by some buyers. They may desire customer demand before viewing the product seriously.

5. Overall an assessment would be the most prudent move and the depth would vary again based on organizational complexity, current distribution, competitive make-up, and product to name a few.

Darin Leonard, Regional Managing Principal, Seattle.
206.229.1187
seattle(at)oneaccordpartners.com

What’s the competition doing today? As noted above, there are numerous scenarios possible for this company. Without assuming too much, and depending on “what going national” really means to this $3M company, it all depends. It depends on how much capital the company is willing to invest and/or, how strategic they want to be with the right partners and/or distribution channels.

Regardless of the distribution channel(s), whether its high end retail direct or partnering with established high end distributors, consideration of how the product will be promoted to/through these channels will be key. Technology solutions also apply, along with an effective web strategy also.

Dave Swartzendruber, Principal, Chicago.
312.265.5843
chicago(at)oneaccordpartners.com

You are right to ask the question as the answers will be pivotal to both your short term and long term growth. The right answer will, of course, come from asking yourself not only the right questions but also asking them frequently.

A lot of your answers will stem from “How is the item positioned?” Upscale? Downscale? Superior quality? Great value? The reason your next steps might determine your short and long term growth potential is because how you position yourself now will carry you forward — or hinder your longer term success. In other words, how do you see your brand’s key benefits and exactly who will be your toughest competitors?
Also, try to understand what your “brand” is all about. What is the emotional connection your customers have with the product? What competitive attributes or factors are driving it? Where’s the real customer perceived value?

You are right to asses the situation before moving forward forcefully. Your direction hinges on the factors mentioned above, and you have ample time to test your alternatives now — much more so than you will later. Without knowing the details of your situation, I suggest you see if there are ways to test alternative distribution methods. Think of your current market and distribution as the center of the bulls eye and your expansion efforts will test each concentric ring as you grow from the center. It’s better to test a few smaller steps before you shoot for the national goal. Your core customer base may change as you expand.
Finally, the right development of your web site and effective “search engine optimization” and “search engine marketing” efforts will give you public visibility at a very low cost — at least until you ready for even bigger efforts.

At the end of the day, remember to look at the factors involved, analyze your options, create a profitable direction, and execute.

Effective execution and ineffective branding leads to many business failures.

Feel confident that you seem to be asking the right questions.

Jim Fisher, Principal, Boston
781.449.4333
boston(at)oneaccordpartners.com

Believe it’s essential for a small company to understand its mission & purpose in laying the foundation for how it wishes to approach accelerated revenue growth that will sustain over time. This informs the essence of the product and the organization to define the brand and how that brand will be perceived in the marketplace and with myriad stakeholders.

The sales development organization strategy will be guided by how the brand and company’s value proposition is to be presented to direct customer and channel partners. Whether through direct, indirect or multichannel strategies there are a lot of options today. But a strategic focus to sales execution will further organize the pathways to how the company wants to be merchandised and who the right retail customers and channel (indirect or food brokers) players/partners are to promote the premium value associated with the product.

Peter Klinge, Jr.
Regional Managing Principal, Salt Lake City
peter.klinge(at)oneaccordpartners.com

The key is the last statement “Is there a way to assess situation before choosing 1 or more directions?” The answer is “yes” and independent assessment must be your first step. An Interim Sales Executive solution, provides the experience to fully assess the situation, has the expertise to develop a comprehensive strategy and understands what skills are needed to best implement the designed tactics.

The “interim” position efficiently provides the executive level performance needed at this critical time, but does not lock the company into a long-term high fixed cost solution. The flexibility of the “interim” solution facilitates quick improvements to take advantage of market dynamics and insights that are learned sales call by sales call. Before you choose a direct sales or indirect sales path use an Interim Sales Executive to further clarify and assess all the factors involved in your opportunity.

Dale Hintz, Principal, Dallas
972.824.6923
dallas(at)oneaccordpartners.com

My experience in the food industry, especially given an organization that is trying to establish itself, is that you’ll both need and want a solid well recognized food broker. A smaller firm will rarely be in a position to grow fast enough nor even have the funding to grow organically at a pace that the market will require. This is a well established industry, and the historically successful food broker’s have the necessary existing relationships that will dramatically reduce the sales cycle, while additionally offering your firm a variable cost model, both critical to early growth.

Michael Pearce, Principal, Los Angeles
425.830.4156
michael.pearce@oneaccordpartners.com

Choosing the right channel for your product will make a significant impact on your revenues and success, so you are right to think it through. Start by looking at the universe of channels.

There are three channel categories and here is the purpose of each: 1. Direct (Field Sales Force) – Good for complex sales, when control over the sale is required, or high-touch service is needed. 2. Indirect (Partners) – Good for lower cost sales, complete solutions, when local customer care is required, or you want to increase your reach in a given market. 3. Direct-to-customer (i.e. telephone, mail and Internet) – Lowest cost channels, maximum reach, efficient for simple items.

Create a coverage model by thinking of a grid with customers’ needs on the left and channel options across the top. Rank the channel options based on customer needs and you have your first stab at a coverage model.

Remember to keep testing and refining. That’s how successful marketers stay successful. Good luck.

George Reinhart, Principal
george.reinhart(at)oneaccordpartners.com

For me knowing the target channel or account base desired to penetrate will help formulate the correct strategy. Typically higher end retail customers like dealing directly with the company they are buying from to establish a closer partnership and relationship. If this is the case then going direct might make the most sense. Assessing the situation first is dependent on a number of variables, i.e., company cash position and ability to invest into sales before results, short and long term goals, etc. Again depending on the short and long term goals it might make sense to look at a hybrid approach whereby direct sales is targeted to the channels that need the relationship, i.e., Nordstrom for direct sales. Use in-direct sales (brokers) to establish distribution to larger mass retailers such as Kroger or Safeway.

Richard Brune, Principal
richard.brune(at)oneaccordpartners.com

Fresh ideas, complete honesty, and an absence of bias is required to conduct an insightful audit of the company’s revenue engine—the marketing and sales functions that lead to revenue generation.

This is yet another excellent scenario for using interim managers. Frankly, only an outsider can provide the unbiased perspective necessary for an accurate assessment of the inner workings of the revenue engine. Also, only a well-seasoned executive with strategic and tactical or operational experience in marketing and sales has the in-depth experience that an assessment requires.

Here’s what one typical interim engagement might look like if aimed at assessing the effectiveness of a company’s revenue engine and realigning it for achieving 2009 revenue targets. This engagement could be lead by a VP or C-level interim marketing executive with back up from a VP-level interim sales executive (or switch the lead and backup roles).

1. Assess characteristics and capabilities of the sales force and channel partners. Define the ideal set of characteristics needed for success over the next 12-18 months and make recommendations how to align the organization accordingly.
2. Assess the compensation strategy and plan. Revise as necessary.
3. Assess the opportunity pipeline. Just how real is the forecast? Revisit and adjust the opportunity scoring methodology—remember this isn’t business as usual.
4. Revisit and assess if the stages of the pipeline are well defined in light of today’s business climate and how your customers are purchasing. Is a CRM system being used properly?
5. Evaluate if marketing and sales strategies and tactics and properly aligned to each other and to the pipeline.
6. Assess every component of the marketing plan, specifically the positioning strategy and all lead generation activities. Are the right investments being made? Will the marketing activities be sufficient to generate the required leads?
7. What metrics are being used to measure marketing and sales? Are these the right metrics or are there others that better indicate contribution to company objectives?
8. Conduct an analysis of the competitive landscape. A formal SWOT analysis is good, but at least conduct an analysis of positioning, messaging, and direction. How does the company compare?
9. Review all customer satisfaction surveys, or if none exist conduct a survey that includes key question for Net Promoter Score.
10. Assess management. Are the right people in key roles within Marketing and Sales? What skills are missing that should be added via training or outsourcing?

No doubt the list could include 20 steps or more. It wouldn’t be difficult to create another list of 10 steps with completely different activities. However, I’ve seen that if these areas are evaluated and tuned to the realities of the marketplace by un-biased, seasoned executives, the company’s revenues will jump.

In this example scenario the two interim executives assigned to the engagement could conduct the assessment and make the majority of changes in about 3 months.

There are three primary benefits to engaging interim managers for this work:

1. Unbiased, objective counsel from senior executives.
2. They drive the assessment and the action to make necessary changes.
3. They are focused on the engagement’s objectives while the existing management team keeps their eyes on the day-to-day operations.

Imagine: A revenue tune-up in 3 months. No loaner car required.

Want to learn more about the effective use of interim management in marketing and sales? Preview the book, Leadership On Demand: How Smart CEO’s Tap Interim Managment To Drive Revenue

You can read more about Interim Sales Management by Chuck Besondy at his blog One Riot-One Ranger

By this, we mean they divide the list among their sales team. The sales force charges off with the new found list and company waits to see how good the list really is.

There is a better way. Before launching the sales resources to chase the list, honing the message and the company story for effective application is essential. It is important to give them the best tools possible. One of the strongest tools a company can employ is the use of a universally consistent story. Here are five excerpts from our practice checklist for use in crafting the next step:

The short pitch (clear, benefit-rich and brief)
Well conceived, tested and consistent with objectives
Universally accepted by the organization
Backed with a strong, detailed value proposition
Reference based

The second point, a clear and concise message, seems obvious. Yet each time a sales representative or another employee takes fifteen minutes to describe the value of their offering, there is a high probability a prospect is lost. Avoiding common errors in message composition and make-up is crucial to success. Prospects are drawn to benefit rich descriptions that align a solution with a problem. Avoiding technology driven explanations and complex product information and taking the prospect’s perception as the prime driver for a message breeds success.

OneAccord advocate a company-wide campaign to accomplish the following with five activities listed here:

• Build the message using consensus. Discuss and create a short, clear and concise statement summarizing your offering. “We have an ear cleaner that can reduce ear infections by 96%.” It is pointed, clear on the benefits and short.

• Don’t rush the process and practice first. Get the sales tools needed in the hands of the sales force a week to two weeks before they get the list of prospects. Make sure they are trained on the use of the tools. Get them to practice with the tools in front of an internal audience. (This is one of the most telling exercises as it tests them and the message and tools.)

• Make sure the message is consistent. Have everyone in the company carry a card with the short message on it and stop people in the halls to recite it. Give prizes for accomplishment, and have some fun with it! The point is, no matter where a prospect calls into your organization, they will get consistency. If everyone in the company has to repeat the story and they are committed and rewarded for success, your organization will have a better story.

• Build a reference based story. Go back to your customers and find out why they bought your offering and how it is working. Get the details. Put the value proposition in an organized and detailed piece and use it on the new prospect list. If you have identified a source of pain and you have captured a solution, the theory of large numbers will work to support your efforts. Through conversations with your customers, they will articulate the best ways to describe and relate your value.

• Turn the reference list into a tool to close business. Finally, wrap up your “proof points” and build a reference list. This is the derivative jewel that comes from the exercise of canvassing your customers for their perception of the value of your offering. These references are fine gold, a storehouse of immense value. Use them wisely and avoid the temptation to lead with them. There are extremely effective sales methods to exploit a list of references, and our best practices process can illustrate how to do so.

Build your message around this practice and relentlessly manage your human resources to consistently take the company story to market. Avoid “one-off” creativity and innovation with your message. Sales will grow and customer expectations will come in line. The result is quality and a message that can scale to very large market sizes.

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 comforting 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 is 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) between sales team members, and then send them out to conquer 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.

There is a harsh reality of running the numbers alone. Primarily focusing on top-end production assumes that all sales are “good” sales. This practice amounts to buying time in sales. By shifting your stress onto Operations and Customer Service, both of which are now tasked with delivering pleasing products or services, the result is often customers with high expectations.

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

1. It 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.

We sometimes describe it as analogous to improving the performance of a sales race car. OneAccord doesn’t just jump into the driver’s seat and run sales harder and faster than the previous driver; we begin by lifting the hood. First, we’re taking a look, to validate and improve:

1. the power and efficiency of the race car’s profitable business engine (offering business model and strategy);

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

3. and the rubber that meets the road–often at the limits of its performance–potential and in 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.

Improve your sales racing machine with OneAccord’s revenue acceleration plan