Aug 17, 2022 | Customers, Marketing
In many major companies, there has been a number of new positions created in the last decade to try and accommodate the changes in the strategic and competitive environment.
Among them has been the ‘Chief Revenue Officer’ (CRO)
In some cases, this reflects the need for increased collaboration and sometimes convergence of marketing and sales. In others, it is just the fashion, the latest management fad.
This seems to be particularly the case in businesses where another of those-acronym driven fads has evolved, ABM, (Account Based Marketing)
The barriers to the integration of Marketing and Sales are high, deeply set into the functional status quo of most organisations, and resistant to change. However, the emergence of digital tools has accelerated the trend, and the recent Covid challenges have been a catalyst for further and quicker evolution than would otherwise have been the case.
For years I have been advocating ‘Alignment’ of marketing and sales to the needs of specific customers, and ways to achieve that outcome.
Removing the Marketing and Sales labels has proved to be useful to the integration. The emerging combined function recognises that the responsibility of each is simply Revenue Generation, or ‘RevGen’
The first substantial consulting assignment I had, well over 20 years ago introduced my client, a domestically owned multinational supplier of ingredients to the food industry, to Strategic Key Account Management. (Try the acronym, always got a chuckle)
We went through a process of identifying the specific needs of key customers, and tailored our marketing and sales effort, to the expressed and often jointly uncovered needs of customers, with whom we engaged in the process.
Those workshops and subsequent implementation efforts are as relevant now as they were 20 years ago, probably more so. It has just been renamed Revenue Generation.
SKAM required that the marketing and sales personnel collaborated and engaged customers at decision making levels to identify how my client could add value to their customers businesses. The core assumption was that only by doing one or more of the following, could we be successful.
- Assisting our customers to increase their sales,
- Actively reducing their costs or
- Increasing their productivity.
We set ourselves the task of identifying how we could achieve at least one of those three things, preferably two, and focussed our efforts on delivering those outcomes.
Predictably, it was a successful initiative. Customers loved the collaboration. Inventory levels reduced, as customer service levels and responsiveness increased, generating increased trading profits.
I had a coffee with one of the managers from that business, now a very senior bloke in a multinational organisation a couple of weeks ago, during which he told me that he still uses the three-part test, and insists his team use it. The longevity of the idea, and the impact it has had is gratifying!
Header comes from the extensive StrategyAudit slide bank.
Aug 8, 2022 | Innovation, Marketing, Strategy
Black and white thinking is easy, there is right and wrong, you decide which side of the fence you are on, and stick to it.
Luckily, life is not like that. Life is a mass collision of colours, ambiguity built on ambiguity, built on uncertainty. That is what makes it interesting, and worth living.
Following the previous post that offered 9 strategies for more impactful decisions, it seemed appropriate to observe that the great advice in that post is useless in the absence of being able to see a problem from a number of perspectives.
In other words, see all the colours.
Most problems we face in strategy development are wicked ones, where there is no obvious right and wrong answer, where there are nuances on top of nuances, second order impacts, and where definitive data is hard, if not impossible to find.
Thinking in a binary manner means that you dismiss all these opportunities for creativity because it is somehow inconsistent with your existing views.
This also means you lose sight of most of the stuff from the alternative choices, which is where the richness usually hides.
Differences of opinion cause tension, discomfort, and room for conversation which become challenging for a binary thinker.
Thinking and then communicating in a nuanced way is an enormously valuable skill.
Relationships that last can accommodate the differences caused by the grey areas. It requires that you can hold seemingly inconsistent ideas in your mind at the same time.
Binary thinking means you cannot hold those conflicting ideas.
The question every time in a disagreement, is the extent to which the tension created by differences in opinion are healthy.
We are used to seeing things in a binary manner, it is the automatic response, but we need to find a way to manage the inconsistency and ambiguity. We need to be flexible, as well as being driven by the rules.
The biggest challenges we face have the need to be able to dance with the facts, what works today, may not work tomorrow.
Overdoing structure removes the flexibility, and the opportunity to see things that may become important.
We think most problems can be solved, that is the base assumption we always have, but the conventional wisdom does not always work.
As a kid I lived on the beach, surfed a lot. The water pushed into the beach by the waves needs to get back out somehow, so you have ‘rips’. The area that allows the water to return from the beach. When surfing, you go with the rip, it will take you out, try and swim against it, you will just get tired and make little or no progress. You need to be able to swim at an angle, use the rip to take you out, then move across towards where the waves are.
This skill works in problem solving, finding bits of a problem that are resolvable, like getting a single wave in a session in the surf, you get the thrill of that great wave, use the rip to take you back to catch the next one. It is a process
Tension between people who hold differing views is healthy when managed well. This is when there is a recognition that there is no right or wrong answer to a wicked problem, just the better choice at this point. Then the differences in opinion can better hold the outcomes of the decision to account, it will increase the opportunity to pick up the problem molehills before they become mountains.
Ambiguity and bias can be used constructively.
Embrace your opposites. It indicates you recognise there are differences, give permission to voice the unfamiliar perspective. This is the opposite to just having people with you that agree, then there is no tension, no opportunity to see the differing perspectives.
One side of any question is rarely completely right, and the other completely wrong, we must be curious to see the reasons that the others see it differently.
This is how we produce creative new options that reflect life.
Header cartoon credit: Tom Gauld in ‘New Scientist’ magazine.
Jul 25, 2022 | Analytics, Marketing
Almost every marketing so called guru, yours truly included, will bang on about calculating an ROI from your investment in marketing.
Marketing like any other investment should seek a return, and there should be accountability for those numbers.
Almost nobody will disagree.
The challenge is how you do it.
How do you attribute an outcome to any specific activity or individually weighted group of activities?
The amount spent divided by the sales, or margin returned from that activity.
Pretty easy in the case of a piece of machinery, another matter entirely for anything beyond a specific tactical action, such as an ad in Facebook or Google where the response can be counted.
In the case of marketing investment, how do you allocate the sales outcome to that activity?
When a sale is generated, was it because of the activity we are calculating for, or was it the phone call from the sales rep, attractive copy on the website, clean delivery truck, or the referral from some other satisfied customer?
How can we tell?
When some analytics nerd cracks the code on attribution, he will become histories fastest billionaire.
So, when some fast talker promising world market domination will result from investing in their new ‘thing’, run as fast as you can, unless they can prove they are the one who cracked the attribution code, which I do not expect any time soon.
Jul 8, 2022 | Innovation, Marketing, Strategy
A former client has been providing engineering services to the fossil fuel industry for decades. Having breakfast with him a while ago, he expressed the view that the prospects for the industry in which his business competes, and thus his business are dismal.
He is right, so long as he continues to see his current capability set through the perspective of how the business has operated in the past.
The challenge is to position yourself to take advantage of opportunities as they arise. Emerging technologies of various types are opening substantial opportunities for which his business has deep capabilities, but which are hiding in an alternative perspective of how those capabilities can be leveraged. Changing the strategic frame through which they are seen provides a path forward.
The challenge of the future is to reposition yourself quickly towards the point at which there is real, monetised value to be added.
You must be prepared to make early bets on those opportunities with the best odds of success in the medium term with a minimum of information by which to make those decisions. Equally, you must be prepared to walk away from the sunk cost when new information emerges which reduces the odds of the expected success.
Stripped back to basics, you must set yourself up so that as clarity emerges you are in a position to accelerate into it.
In my younger days I spent half my life on a surfboard. In a big swell, the position on the wave you took after the take-off was critical. Done right, you were able to accelerate out of the bottom turn into the fastest part of the wave, and, hopefully, make it through the break above you. Get the timing of the bottom turn just a bit wrong, and ‘Wipeout!
It is the same in business, positioning yourself going into uncertainty in the manner that puts you in the best position to accelerate out as it becomes clearer will be the difference between those who make it, and those who do not.
Photo credit: John Morris via flikr
Jul 6, 2022 | Marketing, Social Media
My inbox is filled every day by emails from random people assuring me that their secret social media strategy will see me as rich as Bezos.
Some have my name and email address; most are more like; ‘Hi there’ and many now start with the ‘Re: our conversation about social media strategy.’
Spamming by those who are trying to sell themselves as experts at selling on social media.
What Nonsense.
If they are happy to use that sort of rubbish to market their own services, what sort of crap would they dish up to you?
Social media is a tiny part of the tactical armoury of marketers, or should be. It is the very end of the process, not the beginning, or middle, it is the very end only.
Social media is simply a tactic, amongst an armoury of tactics to achieve a goal.
The metrics of social media are irrelevant when your objective is to sell widgets. The only measure of success is how many widgets you sell, not how many people view, like or share your content, although the last one can be useful.
In the absence of a reason to take that next step towards an objective, the post is a waste of resources.
‘Content is king’ is a horrible cliché, but it is true.
It is the ‘content’ of your posts that describes in some way the value you deliver, the problem you solve that matters, nothing else.
Almost all the junk I see has no strategy. It does not reflect any understanding of the drivers of behaviour required to achieve a goal.
When you want to find a social media ‘expert’ to work for you, start with someone who has way more than the knowledge necessary to plug a post into Facebook, Instagram, or Reddit. You need someone who understands what it takes to find a prospect, then take them through the process that creates a customer!
Header cartoon credit to social experts Scott Adams and Dilbert.
Jun 24, 2022 | Customers, Leadership, Management, Marketing, Sales
In the past, for the orderly management and convenience of organisations, Sales and Marketing have been kept by management in separate functional silos.
In a time of flattened organisation structures and the ease of communication and data sharing, this no longer makes any sense at all.
The evolution of the silos to one functional area of responsibility will remove substantial opportunity for the transaction costs incurred by turf wars, miscommunication, and unaligned objectives, to be eliminated.
From a customer’s perspective, how you are organised internally is irrelevant, they are looking for the products and services that solve their problems or address their opportunities in the most cost-effective way.
The vast majority of interactions a customer will have with a supplier will be cross functional. Over the course of a transaction, they will interact with sales, technical service, after sales service, and logistics, probably sequentially.
The power in the sales relationship has moved from the seller, who had control of the information necessary for a customer to make a purchase decision, to the buyer. In past days, the sellers only delivered the information that benefitted them, but those days are almost gone. This process has been gathering speed since the mid-nineties, and now dominates every transaction beyond small scale consumer purchases like groceries, and even there, the need to be clear about the ingredients, their sources and provenance is pervasive.
Both sales and marketing silos have the same ultimate objective: to generate a sale, and preferably a relationship that leads to a continuing flow of orders. The combination of the silos into one, Revenue Generation, makes logical organisational sense in this new environment, as well as better reflecting the way customers interact.
Sources of revenue.
Isolating the sources of revenue is a crucial component in effectively managing the revenue generation function. Luckily, the sources can be summarised into three areas.
- Customers. Which customers buy what products, in what volumes, how often?,
- Markets. There are many ways you can dissect a market. Geographically, customer type, customer purchase model, product type, depth of competitive activity, lifecycle stage, and others.
- Product. Product type, mix, price points, lifecycle stage, margin, potential, and others.
Together these three axes form a three dimensional matrix from which your revenue is derived. The task of the RevGen personnel is to maximise the revenue today, and into the future, while minimising or at least optimising the cost of generating that revenue.
Type of Revenue.
Considering not only the source of the revenue, but also the type is a crucial part of the equation that will lead to long term profitability. Again, there are three broad categories into which all revenue can fall.
- Transactional. One off sales that require little else at the point of the transaction beyond a mechanism to execute the exchange of goods for money.
- Packaged. This category is by far the biggest, as it contains all sales that come with a ‘ticket’ of some sort. That ticket may be a guarantee of service, warranty period, assurance of quality via a brand, bundled pricing, promotional support, and many others.
- Subscription. With the emergence of the internet, subscription sales are growing rapidly at the expense of the packaged sales. This exchanges the upfront revenue of a sale for an ongoing revenue stream based on use, time, or both product and service. The emergence of the ‘cloud’ has spawned a host of new business models that use subscription as their base, but it is not new. Xerox used subscription for decades by leasing their equipment, then charging for usage on top. Similarly, Goodyear moved their sales of tyres to the airline industry from a sale to a usage model in the 80’s to sidestep the simple fact that their tyres were more expensive, but lasted longer. This encapsulated the price sensitive nature of airline purchases, with the savings over time because their tyres lasted for more landings than did the opposition.
Thought about these variations all have resulted in an exploding range of business models over the last 20 years, making the task of managing the generation of revenue way more complex, and therefore also opening opportunities for those who can think creatively about the task.
When you need some creative outside experience in this complex menagerie, give me a call.
