You may have heard of the term zero-based budgeting. The basic thesis is to look at your business through the eyes of a start-up. If you were starting today from scratch, what would you spend money on? Costs creep on over time and before you know it your business is totally misaligned. Costs and sales are out of step. This is a moment in time where you have to stand back and say I’m changing our approach. I’m making this a 5% or a 10% or a 15% net profit to sales business. I know I can sell say $50m this year. I know I can achieve a 60% GM or $30m on that sales figure and therefore to make 10% net of $5m, I can only AFFORD $25m of overheads. That moment of conviction changes everything. It drives you to find cost savings everywhere. It acts like a catalyst to drive a root and branch review of all costs. It demands you ask the question, if I was starting this business tomorrow from scratch what could I do without? This does not necessarily mean cutting heads but it will definitely mean cutting costs that do very little to facilitate sales.
Alignment #1 – People
- But let’s take this thinking into the organizational structure of your business. When was the last time you reviewed the skillsets of your staff relative to what is needed to execute next year’s plan? It’s not just costs that creep on over time. It’s also familiarity. The loyal servant dilemma. Great people, but the skills needed in for example, digital marketing, has dramatically changed. You have say 25, 35, 500 members of staff, all with different roles and different seniority that have been recruited over say 10 years. Each hire in isolation made sense at the time. However markets, customer needs and competitive positioning can change overnight. The connected world we live in today is more complex than ever. Technology allows all the players on the field to succeed not just the big guys. In fact often we treat the big guys as the favorite when in fact it’s the small guy with the better weapon, skill, technology, drive! (Please read Malcolm Gladwell’s latest book David and Goliath.)
- But to grasp success in this new world requires a constant recalibration of the roles your company’s needs to execute and the roles that have become redundant. It’s really tough for a CEO to take a dispassionate view of his or her team and reconcile that with the execution team that is required for success. It’s not about letting people go. It’s more about matching the team with the new requirements. It’s about working smarter not harder. You need to consider moving people, transforming their roles, re-training them. You need to consider innovative solutions to missing roles. e.g. outsourcing instead of hiring, or fractional roles instead of full time roles, or partnerships. The big boys do it all the time.
- More than ever you need to look at your gang of people as a resource, to achieve clearly defined strategic goals. The narrower the goals the better. Of course it’s easier just to trade, to turn the handle, to turn up each day and try your best. The mental energy required to align roles, to revisit every role in the company and ask some key questions, is significant. But unless you take on that challenge, you will never unlock the full potential of your team.
Alignment #2 – Marketing & Sales
One of the most difficult aspects of scaling a business is alignment. You could be the head of a $500m division or the leader of a 25 person manufacturer but you will struggle with alignment. Getting different departments on the same page, getting people pointing in the same direction is the essence of leadership. And the biggest win often comes from aligning your Positioning with those talented marketing content creators and those pesky sales professionals!
- To create alignment the order of events is crucial. You start with defining your compelling story. Articulate your unique positioning. Create a memorable and inspiring boilerplate. This covers what you do and the big business results you deliver for clients supported by authentic evidence that makes your claimed results credible. Teach this boilerplate to both the marketing teams and the sales teams. Explain why it plays to the central history, DNA, culture and skill-set of your company. Make them believers. It drives everything.
- This story then drives and aligns all marketing activity. This includes all campaigns, collateral and web site copy. All focused on telling the story and designed to drive relevant prospects to the web site to read more, or to engage in conversations. Focus stories, case studies, how to use your product or service, any type of collateral on OUTCOMES. What are consequences of using your service. The consequences for specific prospects. How does their life improve and how does it get them to achieving their objectives.
- Now this next piece is key. You don’t just want to create general sales prospects with your marketing campaigns you want to create specific, high quality leads. This means your story needs to be written to appeal to a specific section of the masses not the general masses. If you write for the masses then you are talking to no one. If everyone is responsible for a task no one is responsible for that task.
- We need to acknowledge that Attention is now the huge rarity factor. We need to realign our thinking around attracting attention with remarkable content. We need to translate our inspiring story, our boilerplate of who we are and the business results or value we deliver for our customers into marketing collateral that compels prospects to act.
- Even with AI, it’s still about people. Identify the Persona that represents the likely user of your product and tell their story. Make it feel that you are directly talking to their world. Demonstrate the outcomes you achieve for them. That’s Persona thinking. Identify not just the target company but the managers within it who care about the issues you are solving.
- Identify the sectors you want to dominate. Sector thinking brings a focus to your story telling. Sectors have their own unique language. Datacom, Military, Transportation, Logistics etc., all use phrases and terminology of the insider. Ignore this and you will be treated as an outsider.
- Create Business Results Sheets that translate the story into specific results you can achieve for customers. Create a separate sheet for each product or product range. These sheets need to be created with deep knowledge of the customer’s world. You want to articulate the symptoms that the customer feels and that indicate your solution is relevant e.g.
- Symptom -Supply chain costs are rising – you offer a service to review the product lifecycle to take costs out of the system.
- Symptom – Software bugs are causing huge cost over-runs and deadlines to be missed – you offer an intuitive code analyzer tool to trap bugs earlier in the process and allow corrections.
- Symptom – Throughput in the semi-conductor industry is not meeting your customer’s demand – your system offers a higher level of throughput at a competitively attractive price.
- All marketing collateral needs to articulate how the prospect could use the product in their business today. Instant gratification. Use videos, case studies, blogs, white papers, whatever it takes to make it clear how a prospect derives value from your product. So many products fail the compelling usage tests. Having great capabilities is not enough.
- Also because of their deep knowledge of the market the marketing team (heavily assisted by smart product managers) will produce excellent competitor cheat sheets highlighting why you are unique. The key is to identify the essence of your competitors and why your solution solves a problem that their solution does not or why your solution is far more compelling.
- Audit your SEO results and drive strategies to improve your rankings. Engage an SEO consultant for top results.
- Marketing departments are lead generation machines. They need targets, metrics, and driven to achieve them. Use Google analytics, HubSpot type metrics management tools to measure your success and continue to drive improvements.
- Sales Teams can now craft their engagement strategies with your unique positioning in mind. Scripts should be framed around insightful questions that demonstrate your understanding of your unique market and the issues faced by your prospects. The key for sales professionals is to find the RIGHT problems. Right means they must be a high priority and be able to be solved by you. Sales negotiations should be set up by insightful marketing literature. There should be a totally consistent narrative that supports these negotiations.
- Hold regular review meetings between sales and marketing to make sure the language of marketing is resonating in the marketplace. Do the prospects really understand that last blog post, white paper, product announcement?
- Post Covid, trade shows are a great place to get face to face feedback on your story. Sales teams can add a lot more value than just close deals. They can validate your whole strategy with the key stakeholders – the customers!
Ian is the CEO/founder of Boston based The Portfolio Partnership, a value creation team of operators. We help owners “build businesses buyers love to buy” by deploying our successful playbooks. It starts with Positioning/Branding. We seamlessly join your team to work on the right stuff.
As always if you found these insights useful, please share.
