Growth Hacks – Moving the Metric

One of the most important steps a sales organization can take to stay competitive in a rapidly changing sales landscape is to simplify its processes. Eliminating unwieldy training and paring down operational systems are both ways in which organizations can reduce friction for their sales force and drive revenue growth. However, modernizing sales enablement through simpler processes isn’t just about removing obstacles. Evolving organizations would also be wise to consider streamlining the metrics they use to quantify success, so that the entire organization can unite behind a shared vision, rather than improving on a large set of metrics that may not even be comparable.

This simplification strategy is one of the key lessons that Scott Santucci, president of the sales enablement consulting firm Growth Enablement, advises his clients to do. By reducing friction and creating shared organizational visions behind simplified processes, modern sales organizations are better positioned to create value for both themselves and their consumers at a faster pace.

In this episode of Growth Hacks, Katja and Kunal speak with Scott about how he came to be so bullish on strategies that involve stripping away much of the old sales enablement playbook. Not only does he explain his rationale; he also walks us through multiple examples and actionable tips that allow sales and marketing to achieve synthesis and create a better sales enablement playbook. Over the course of this episode, Scott breaks down the importance of metrics like the commercial ratio, how he coaches companies to recognize a singular route to value that becomes their playbook for driving sales, and specific case studies for how to implement these strategies successfully.

Key Takeaways:

  • How to use the sales and marketing efficiency ratio to improve commercial health across an entire organization. Sales teams often track dozens, if not hundreds, of various metrics to monitor KPIs and measure success. Yet that level of data can quickly become dense, especially when comparing them against each other in order to measure overall success. “One large client tracks over 5,000 different metrics for their sales organization. If you’re tracking that amount of data, you’re tracking nothing,” says Scott. Instead, he encourages clients to ask themselves, “What’s the one metric that we can work backwards from, that we want to move the needle from?”

Most often, the answer is the sales and marketing ratio, sometimes referred to as the commercial ratio; a calculation used to measure the efficiency of sales and marketing and deduce the overall health of a commercial system. Because the commercial ratio calculation is straightforward – revenue growth, divided by total sales and marketing spend – companies don’t have to compare dozens of various metrics to try to puzzle together their sales organization’s health. It also pulls in the entire organization into a singular goal. As Scott explains, “The metric says to me, ‘How do we as a company work better together? How do we team up and be on the same page to go find more efficient ways to attract customers?’”

  • The importance of having multiple perspectives in the room to improve sales enablement. One of Scott’s holistic strategies to improve processes around sales enablement is by bringing in people from all different backgrounds throughout the sales organization to create a shared vision, rather than having decisions made from the top-down. By putting pen to paper with input from a wider variety of stakeholders, organizations can be certain of two things: that their entire organization is aligned behind a singular vision, and that it’s a vision that is accessible to a larger customer base at the same time. Whether it’s aligning the organization behind the value of using a metric like the commercial ratio, or creating a new strategic vision, synthesis is a key component of Scott’s strategies to bettering sales enablement. “What’s important is making sure you meet all of the different folks that would be involved in teaming together. You [have] got to meet them where they are first, and then help them connect the dots second.”
  • Ways to identify the right route to value to clarify sales messaging and training. A key phrase that Scott uses with clients is the “route to value” – a new lens through which sales and marketing teams can craft better messaging. Rather than working backwards from what each individual customer might need, Scott encourages organizations to recognize that they’re in the value creation business, and view themselves as the people that can help create value for clients by taking them from the state they’re in today to a better future state.

To do so, he urges organizations to map out what that journey looks like from beginning to where a business might want to get to, in a process called value mapping. By value mapping, companies can figure out not only what the route to value is, but who the decision makers are that need to be involved, and the sorts of decision making they may need to guide a customer through. “A route to value, to be simple about it, is just writing a movie. A future movie of where you want to take your customers. You’re casting your clients as the heroes; therefore you’re also casting your salespeople as the guides,” says Scott.

  • Tips for aligning organizational economic value with the needs of your customer base. While value mapping starts in-house, and involves some speculation, it’s still important to align a company’s economic value with the needs of its customers. One way that Scott and his team do so is by building a model of what their customer’s world might look like – the challenges they face that meet certain patterns, or the people most likely to be able to enact change. By doing that research ahead of time, companies can truly understand the problems that exist for potential consumers and devise the right messaging to reach change agents who can implement solutions.

Imperative to the process is starting early and using that knowledge to drive messaging and training. “What we’re looking at isn’t interviewing customers about the products they want,” says Scott. “That’s way too late in the game.”

  • Actionable strategies to eliminate friction in the sales process. As sales divisions grow, so do additional training, tools, and potential obstacles that can unintentionally end up hindering sales growth. Rather than adding to your sales team’s plate in order to up-level their skillset, Scott suggests an alternative approach. “What works is creating things that actually take stuff away,” he explains.

He advises clients to pick disparate parts of their sales enablement programs and consider all the obstacles that complicate that in favor of simpler processes; for example, simplifying the process of providing a price quote to a customer. “You would think that doing something like that is no big deal, but taking stuff away is not in most people’s muscle memory. To systematically reduce things that stand in the way of making progress is a great success.”

To learn more, tune into Growth Hacks: At Growth Enablement, Modernizing Sales Enablement Means Throwing Out the Old Playbook

***

The views and opinions expressed are those of the speakers and do not necessarily reflect those of TCMI, Inc. or its affiliates (“TCV”). TCV has not verified the accuracy of any statements by the speakers and disclaims any responsibility therefor. This interview and blog post are not an offer to sell or the solicitation of an offer to purchase an interest in any private fund managed or sponsored by TCV or any of the securities of any company discussed. The TCV portfolio companies identified, if any, are not necessarily representative of all TCV investments, and no assumption should be made that the investments identified were or will be profitable. For a complete list of TCV investments, please visit www.tcv.com/all-companies/. For additional important disclaimers regarding this interview and blog post, please see “Informational Purposes Only” in the Terms of Use for TCV’s website, available at http://www.tcv.com/terms-of-use/.