Five Go-to-Market Skillsets for Driving Growth in Turbulent Economic Times
Co-Authored By Tess Fischer– Alex Bossetta
Arguably no other role in the C-suite is as critical as the Go-to-Market leaders when the business climate becomes uncertain.
Every private equity backed software company we work with focuses on revenue and profitable growth as major components of the investment thesis.
During periods of widespread economic expansion, the leaders driving sales, marketing and customer success can benefit from the economic tailwinds that make it relatively easy for all companies to thrive and grow.
But when the tailwinds turn into headwinds – when economic uncertainty leads to more cautious spending by your customers and target markets – Go-to-Market leaders are in the hotseat.
How will your company achieve the growth targets in your value creation plan?
How will you stay on track toward the investment thesis?
In our work with hundreds of private equity backed software companies over the years, we have seen several Go-to-Market leadership skillsets that help a portfolio company to weather an economic downturn and position itself for growth.
Driving Growth in Turbulent Times
Our Go-to-Market practice focuses on three primary categories of leaders:
-
-
- Chief Sales Officers
- Chief Marketing Officers
- Chief Customer Success Officers
-
Sometimes these functional roles are combined and headed by a Chief Revenue Officer or similar role.
Across these disciplines, we see certain skillsets and strategies that become increasingly important when markets are disrupted or economic conditions slow.
These five key skillset areas are:
-
-
- Adopting data-driven sales and marketing
- Driving “smart growth”
- Optimizing the sales model
- Focusing on proactive customer success
- Capturing market share when competitors lose focus
-
Let’s take a look at each of these areas and outline the types of skillsets that they require in a Go-to-Market Leader.
1. Aligning Go-to-Market Efforts with Data
Go-to-market growth consultancy SBI recently reported at CMOs are not adequately aligned with their CEO’s growth plans. Further, SBI found that CEOs and CFOs typically don’t have adequate visibility into how Go-to-Market expenditures drive revenue growth and so they consider these expenditures to be expendable as the economic climate becomes challenging.
The most effective CROs, CSOs, CMOs and CCOs dispel such misalignment and uncertainty by adopting data-driven processes that span sales and marketing.
Sometimes labeled Revenue Operations or RevOps, this approach establishes a clear set of quantifiable metrics that will become the centerpiece of demand generation and sales fulfillment.
A RevOps process can trace the impact of sales and marketing investments on customer touches via nurture initiatives, engagement and qualification, opportunity identification and progression, all the way through to business closure.
A mature data-driven sales and marketing process can uncover insights into the costs of customer acquisition and how to improve market segmentation.
Perhaps most importantly, aligning sales and marketing around an agreed set of metrics eliminates the traditional gap between those teams and ensures everyone is working toward shared goals.
Of course, such alignment initiatives are valuable at any time. But understanding and implementing data-driven Go-to-Market processes pays off especially in turbulent times. That’s when better visibility into customer spending patterns becomes essential to properly managing your growth plans in the face of uncertainty.
2. Driving ‘Smart Growth’
During rapid market expansion or when new markets are emerging, many companies will operate a “grow at all costs” strategy. The goal is to grab market share, cement the brand in the market, and secure customers before the competition. Focusing on profit comes later once you have succeeded in winning the “land grab.”
But during turbulent times this strategy is far less feasible. You may bring offers to market that capture new customers. But if sentiment turns negative and spending tightens, it might be impossible to turn a profit with your newly won customer segment. That in turn leads to cash flow problems and operational challenges.
In our recent searches for Go-to-Market leaders, we see a much greater emphasis on Capital-Efficient growth or what is sometimes called “smart growth.” That means growing revenue aggressively but doing so while hitting profit targets. The best Go-to-Market leaders for such times work with their organizations to bring offers to market that optimize revenue growth and profit. That in turn can fuel more investment into the organization and lead to more growth.
We highlighted this trend in more detail in our recently published Private Equity Talent Benchmark Report, capital-efficient growth expertise is a desirable skill across the C-suite. Click here to get a copy of the report.
3. Optimizing Sales Models for Market Conditions
Your path to market is central to your overall commercial operation. Do you go with direct sales or do you take advantage of a sales channel to reach the customer?
The starting point for picking your path to market of course starts with understanding the product and market fit, and segmenting your target market accordingly. The outcome of that analysis will determine the right path to market: direct sales, channel sales or some hybrid.
Many software and SaaS companies sell directly to end customers. But in some cases offering your solutions through a channel can be attractive because it takes advantage of a channel partner’s existing relationships with end customers. This can lead to shorter sales cycles and a lower cost of sales.
A channel model can be especially helpful with B2B solutions that may be complex to implement, that must be integrated into other enterprise processes and systems, or that require extensive management steps over time. These types of solutions often require a professional services component to achieve the greatest value for customers.
IT channel partners who deliver these services, such as systems integrators and value-added resellers in enterprise markets, often have longstanding service relationships with end customers that can be your shortcut to market. Trying to replicate those relationships and services could take years, so bringing to market a product that the channel wants to sell can accelerate your path to revenue.
But using a channel-based strategy can mean you are a step or more removed from end customers.
That gap can become problematic as economic conditions lead customers to cut spending. Is your channel partner clearly conveying customer sentiment? Is the partner’s sales forecast accurate?
The best Go-to-Market leaders we place are adept at analyzing markets and determining the most effective sales path. These leaders know how to incent and motivate channel partners if the path requires them, while at the same time forming relationships with end customers to gauge sentiment and spending plans.
4. Retaining Clients with Proactive Customer Success
It’s proven that improving a customer’s experience with your product or service can equate to more profit. That’s because retaining an existing customer for repeat business is less expensive than landing a new one. Recurring revenue models and subscriptions also cut your cost of sales. In addition, happy customers provide opportunities to upsell and cross-sell your offerings.
Research published by Harvard Business School is often cited as the justification for investing in customer success. The research indicates that a 5% increase in customer retention could result in an increase in profitability of up to 95%.
Those research findings have spawned an entire customer success discipline and a supporting industry of tools and services devoted to perfecting the customer experience.
In our work with software and SaaS companies, we see that the most successful portfolio companies make customer success a mission-critical strategic focus.
In particular, the customer success function has evolved from a technical customer support discipline and reactive account management into a proactive function.
In other words, products and services are planned from the outset to be sticky, to foster long-term relationships and to promote recurring usage by customers. That means reaching a deep and thorough understanding of the entire customer journey in relation to your company, including every touchpoint and interaction that contribute to that experience.
The most successful customer experience and customer success leaders whom we work with make this a top priority. They orient all the customer-facing parts of their companies around understanding the customer experience and improving it across the board.
5. Winning market share from competitors
There’s an old saying that goes: “Every challenge is an opportunity in disguise.”
In other words, savvy leaders know that turbulent times can create opportunities to advance, capture market share, or even acquire competitors that were not prepared for a slowdown.
For Go-to-Market leaders, this means recognizing when economic concerns are causing competitors to lose focus and deliver an inferior customer experience or miss business opportunities because of a pullback in sales and marketing efforts.
Recognizing and acting on such openings can result in increasing market share and capturing new customer segments. Even if these new customers have curtailed spending out of concerns over the economy, winning them and keeping them means you will be prepared to reap more profit when the market bounces back and spending resumes.
Executing on such an opportunity may require some convincing and consensus-building in other parts of the organization. Launching a marketing campaign when everyone else in the industry is pulling back from such investments may seem counterintuitive. Similarly, investing to win customers whose spending is depressed requires a longer-term view of market conditions, with an eye toward future returns.
In our experience, the Go-to-Market leaders who recognize these opportunities and have the leadership skills to align their organizations to capitalize on them will have a significantly higher chance of driving exceptional growth.
Go-to-Market Leaders Who Win
Today’s private equity investments in the software sector are largely about growth.
How does the company maximize its revenue trajectory and maximize EBITDA, to drive the company to the investment thesis and the desired exit?
The best Go-to-Market leaders we work with ask themselves that question constantly. When times get turbulent and an economic slowdown threatens to hamper growth plans, these leaders know how to align their teams and the rest of the organization around growth strategies that work.
The above five skillsets are imperative to a company’s growth coming out of turbulent economic times. Looking for Go-to-Market leaders with these skillets to execute on your value creation plan and achieved outsized returns for investors? Our Go-to-Market practice will bring you sales, marketing and customer success executives who know how to drive growth. Get in touch to learn more about how we can help.
Share this article: