What Is Revenue Alignment?
September 18, 2019
Editor’s Note: This guest post was contributed by John Moore, Vice President, Bigtincan.
People have long recognized the divide between marketing and sales. Take a look at this Harvard Business Review article from 2006 that focuses on how to end the war between marketing and sales. In the article, the authors note:
"When sales are disappointing, Marketing blames the sales force for its poor execution of an otherwise brilliant rollout plan. The sales team, in turn, claims that Marketing sets prices too high and uses too much of the budget, which instead should go toward hiring more salespeople or paying the sales reps higher commissions."
More than a decade later, not much has changed.
While there is tremendous value in aligning, and potentially integrating, sales and marketing teams, that value increases by aligning and integrating the rest of the organizations in the Revenue Engine.
In this article, I will combine ideas from the HBR article above and my thoughts and experiences to explore what I refer to as Revenue Alignment.
What is Revenue Alignment? Here’s how I’ve defined it:
"Revenue Alignment places the customer at the center of business success. It puts a premium on creating measurable outcomes, delivering solutions that customers will adopt, and upon a high degree of collaboration between customer-facing teams."
Revenue Aligned organizations leverage the combined power of Revenue Enablement and Revenue Operations to maximize Revenue by focusing relentlessly on value created for customers.
Let's spend time reviewing how a Revenue Aligned organization is positioned to deliver on the customer-centric promise of the modern business.
Deliver Value to Customers
"Fool me once, shame on you, fool me twice, shame on me."
The Revenue Aligned organization understands the business problems that their products and services can solve, and they sell to prospects with these problems.
Some companies convince themselves that their product is ultimately flexible and can be used to solve every business problem encountered.
Products and services can sometimes be bent and twisted, via configuration options, custom API code, or other means to meet these non-standard business problems. However, the people selling, supporting, and using these products sometimes find themselves lacking in knowledge and supporting tools to get their jobs done. These hidden costs are where Revenue is lost.
Revenue Aligned companies understand these hidden costs, as well as the pain this approach inflicts upon customers and avoids this path. Since these businesses are customer-centric, they focus on the customers with the business problems they can solve; not merely to those holding a blank check in their hands.
So, what hidden costs are there?
Consider these often unconsidered pain points that arise when you sell what you don't have.
- You will need to create and deliver training for your staff and the customer on how to use your solution to solve this non-standard business problem
- Your product team will need to create help pages to explain how the product/services overcome this business problem
- Support will need to build knowledge articles for these scenarios
- Engineering will probably discover that your product/solution is not as flexible as you thought. In most cases, you will need your engineering team to add new features to support this unique scenario.
What hidden cost would impact your business?
Let's review how this organizational focus enables different parts of the organization to meet the needs of a 21st-century business best.
Revenue Aligned Leadership
A focus on Revenue Alignment should begin with your Chief Executive Officer and be driven by a Chief Revenue Officer or equivalent. As the HBR article notes: "The CRO needs control over the forces affecting revenue—specifically, marketing, sales, service, and pricing."
One person must ultimately be responsible for the Revenue teams, and this person cannot be the CEO as they have too many other responsibilities to the organization, to shareholders, analyst, and countless others.
To create this level of change, you should:
- Use a goal-setting framework, such as OKRs, to tightly align essential business goals and outcomes from the top to the bottom of the organization.
- Create shared revenue goals and Integrate metrics across the revenue team. You cannot afford to have functional groups working on their own goals separate from the organizational revenue goals. All oars in the boat must be rowing in one direction.
- Align compensation models with the need to collaborate across the organization. If you compensate people based only upon functional outcomes, you will not drive organizational level changes.
- Create working teams made up of Sales, Marketing, and Customer Care personnel. These teams should align along selling targets such as critical verticals, target lines, etcetera.
- Enforce an agile approach. Use standard agile practices such as daily stand-ups, sprints, and report progress to the Revenue team. The key is to align on specific tactics and weekly goals and to work in unison to achieve the key targets.
Revenue Aligned Product R&D
Your product teams want to know what features customers are using, which are having the most impact, and where they should focus their resources. Revenue Aligned businesses are focused on understanding the customer's needs and build in the processes and capabilities to meet these with minimal impact to customers.
Here are a few areas the product teams should focus on:
- Data-Driven — Capture application usage metrics to identify areas for improvement.
- Usability — Product usability is critical.
- Collaboration — Products should be built collaboratively with the teams in the Revenue Engine. Marketing, Sales, and Customer Care must know what the team is creating. They need to be able to provide input, ask questions, and get answers. This collaborative approach will ensure they are better prepared to do their jobs when products are released.
Revenue Aligned Marketing
"The modern customer is very savvy. A brand has to demonstrate an understanding of the customer's needs at the human level. People buy from people, not from a logo. Customer centricity must demonstrate a human connection in every interaction. Training salespeople to carry this forward with every interaction is imperative to deliver on the promise of meeting the needs of the modern customer as a person, not as a "prospect" but as a real person with real needs." - Bernie Borges, CMO at Vengreso
Bernie says it well. While Revenue Alignment is focused on streamlining processes, increasing revenues, and being results-oriented, you also need to remember that it puts a premium on being customer-focused.
How do you combine the two to ensure that a human connection exists in every interaction?
- Streamline and automate the non-human touchpoints ruthlessly. Your initial goals should not be to automate the humans out of the customer interactions.
- Ensure that every customer-facing person in your business has access to the same information. These employees must have the systems, the training, and the content, to deliver the same experience at every touchpoint.
Revenue Aligned Sales
As we have already noted:
- Your customer needs to have a problem you can solve.
- Your customer needs to recognize that they have this problem and be able to articulate it.
"Your follow up will be weak. Your sales cycle will be longer. Your odds of closing are lower."
Sales Enablement is a critical function in the Revenue Aligned business.
As a reminder:
"Sales Enablement is the process of helping sales efficiently move prospects to the point where they can make a favorable buying decision."
These capabilities improve by becoming a part of the Revenue Enablement team as things become more formal, collaborative, process-oriented, and measurement-focused.
In a Revenue Aligned organization, Sales:
- Maintains collaborative relationships with all of their customers
- Understands business pain points and identify solutions, not product features, that can overcome these pain points.
- Sells what they have available, not some potential future feature or product.
- Communicates to the rest of the organization frequently
- What are customers concerned with, how is your business perceived?
This customer-centric model delivers feedback from customers to the rest of the business quickly and with a higher degree of fidelity.
Revenue Aligned Finance
"74% of people are likely to switch brands if they find the purchasing process too difficult." – Salesforce
Companies generally recognize the impact of their Finance teams on expense management. However, businesses often fail to appreciate the broader impact Finance can have.
- Streamlining the procurement process can minimize pain to the buyer. Make terms, pricing, and other related items as transparent as possible.
- Noting specific customer personas that are most profitable and ensuring the business is focused on the most significant growth opportunities.
Revenue Aligned Customer Care
For this article, Customer Care is being used to loosely define Customer Support, Customer Success, and Customer Experience activities.
Shep Hyken, a Customer Support/Experience Expert, understands customer-centricity so I asked him to weigh in.
"Companies that are customer-centric – or customer-focused as I like to call them will always ask the question, "How is this decision going to impact the customer?" That's where it starts.
"Customer-focused companies create a consistent and predictable experience. This experience is created by hiring the right people and spending the time to train them properly. While that may be more expensive in the short-term, it almost always pays back big dividends long-term. Spending the money to hire right, properly train, and provide excellent customer support are all expenses that all pay off. We see some companies resist the investment in some of these areas, which ultimately costs them more than had they done it right in the first place."
Shep's views on how businesses need to interact and listen to, their customers, are priceless.
Did you know?
"More than half of Americans have scrapped a planned purchase or transaction because of bad service, and 33 percent say they'll consider switching companies after just a single instance of poor service. "- American Express
This group is responsible for helping customers start using your solutions and supports them to make them successful. To maximize their efforts, this team should:
- Ensure customers can use your products to overcome the business problems for which they bought your product
- Partner with customers to ensure that the business impact is measurable
- Ensure solutions are fully adopted. Always target 100% adoption
- Become "experts" in their customer's businesses
- Communicate to the rest of the organization frequently. What are customers concerned with, how is your company perceived? The Sales team and the Customer Success Teams may have very different views of the customer; listen to both.
Customer Support teams are talking to your customers at one of the most sensitive times; when they are having problems. Customer Support teams must:
- Find solutions and workarounds to issues that are blocking customers from achieving an increase in perceived value. Support people should not merely log the bugs and move on.
- Identify patterns and weak points in your solutions, documentation, and messaging and share these with the rest of the organization.
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