“The time to repair the roof is when the sun is shining,” John F Kennedy’s metaphor is as relevant today as when it was first used in the 1960’s, the idea of taking advantage of the extra flexibility that is afforded during a strong economy, to lesson the effects of a subsequent financial downturn. For sales organisations and in particular, B2B sales organisations engaged in high value, complex deals with lengthy 6-18 month sales cycles, this could not be more true.
There is immense pressure placed on those in senior field leadership positions to focus on hitting this quarter’s numbers and as a result it is easy to lose sight of the next quarter let alone the current financial year. However, this is exactly where the emphasis needs to be placed for an organisation to be consistently successful year after year.
There is a trend amongst some of the best performing B2B sales organisations to shift their focus to a three year planning cycle in order to help break the sequence of short-term result focused quarters.
A combination of Business Development capabilities is required to ensure this is achieved and that the field sales team is successful. This often involves deploying Demand Generation and Inside Sales resources to help create pipeline for the shorter term more transactional offerings but increasingly being balanced with a more strategic Business Development capability carrying a different mandate for the longer term.
The Business Development group is responsible for supporting the sales transformation plans and corporate growth strategy of the organisation. By sitting slightly outside of both the Field Sales and Field Marketing groups, Business Development can avoid being dragged into fixing short term revenue problems and set on a course to ensure that during the next financial year the sales organisation - rather than scrambling around to find quick deals to plug revenue holes - has the luxury of a much higher pipeline coverage and more control over how and where the number will be achieved.
The financial impact of this approach is very powerful, for one of its clients Clarify calculated the cost of focusing on short-term pipeline revenue at the expense of longer-term planning. To create an additional £10m of in-year income the trade-off was to lose £100m of revenue in the next year which really puts into perspective why chasing short-term results is not always healthy for the business bottom line.
The Business Development function will identify which deal types are most attractive to the business in line with its growth strategy and then create the highest propensity for success for the sales teams. This could be a result of engaging earlier, engaging higher or creating more multi-product opportunities that other competitors struggle to service for example. It will then develop a systematic approach for delivering more of this type of opportunity to the sales force, so the cycle can finally be broken.
Often, pipeline creation for these deal types tends to fall into the remit of the field sales team who struggle to find the bandwidth to generate them in the volumes they themselves need. Demand Generation and Inside Sales teams rarely have the sales skills, commercial acumen and structure to consistently deliver this profile of sales opportunity. A new operating model is required and is something worth considering investing in, even for the companies where today the sun is shining brightly!
By Lee Edney, Director at Clarify, is a specialist in Business Development and works with blue chip enterprises and dynamic technology start-ups engaged in high value complex sales. It designs and builds specialist ‘office based Business Development teams’ that combine the coverage and scalability of a demand generation team with the business development skills of high-end field sales.