Even organizations that recognize the core functions of engage, transact, fulfill, support and renew may view those as the responsibilities of individual teams or silos, and not as cross-functional responsibilities that must be in alignment with each other. They may think: Engage? That’s marketing. Transact? That's sales. Fulfill? That's manufacturing and operations. Support? That's the customer support organization. Renew? That may be the renewals team, or customer success team, or the sales team.
Those functions can only be in alignment if the leadership team is responsible for all of those processes. The leadership team has to ensure that the cross-functional handshakes occur that are needed to allow the business process going from engage to transact, from transact to fulfill, from fulfill to support, from support to renew. Often, especially in small businesses, the CEO is the only one who deals with all of these functions from beginning to end. Even as companies grow, it’s common to find siloed decision making and process design, making change difficult and stifling growth and innovation.
Often a company’s first sales channel is through employees in a direct sales function. The process to bring these personnel on board, train them and make them effective in selling the solutions offered is one of a sales executive’s and the company’s highest priorities. Success or failure here can mean success or failure for the business on the whole. Once new channels are imagined – resellers, distributors, systems integrators, etc. – the complexity of the sales process increases meaningfully, not only due to “hiring” (think recruiting) new sales channels, but also due to a need to enable these organizations through training, education and services. But once they are enabled, then a company must also engage each sales person in the channel organization to allocate some of their bandwidth to “our” product.
Doing this outreach in a consistent, reliable and effective manner is central to the development of an indirect sales model. All too often, companies believe that they can just “sign” a reseller and the sales will just flow in… This is a rare circumstance indeed.
All the elements of the business model that an organization deploys – pricing, discounting, terms and conditions, the contract structures, the legal structures – may or may not be aligned with the actual kinds of solutions the company has built. If your product is a bottle, and you’re selling your bottles in bulk, but you have a licensing model that says, “Oh, you're not buying my bottle, you're just renting my bottle,” it probably isn't going to work. It's going to create conflict.
In technology, the ability to evolve new business models has represented both a challenge and an opportunity. We've had the pressure and the luxury to adopt new business models as we evolve our businesses. For example, in the late 1990s and early 2000s, as the Internet became viable as a software distribution method, technology companies had to retool from having some manufacturing (CD production, manual production) to zero manufacturing. While this presented cost savings, it also changed marketing’s job as packaging was no longer required and customers had to understand that all of the value was in the IP of software.
Early-stage companies often leave it until later to define their sales compensation plans and strategies and that creates an array of challenges. For example, when a software company sells an annual license to its solution, there are numerous ways to compensate the sales team: payment based on the amount booked at the time of sale, payment based on the actual revenue recognized in a period, or even payment when cash is collected from the customer.
How and when you pay your sales team has meaningful impacts on how it approaches the sales process. There’s a continued balancing act between providing the proper sales incentives to fuel growth and managing the company’s cash to achieve all that must be done. Many companies can and do catch up, but it slows the potential growth of their business.
A lack of alignment within an organization often reveals itself when teams fail to understand the factors that affect revenue within the business. For example, suppose you ask the marketing team how many leads it generated in the past month, and it says 100. Then, you ask sales how many leads it received from marketing, and it reports seven. This is a sure sign that something is out of alignment in how the two teams qualify or define leads. Their qualifications have to be the same because that's the handshake between their organizations.
Across the customer life cycle a team must also define who its target customers are. This ensures marketing is targeting the companies that sales is best able to sell to, and who are also going to have the most success with the solution.