Given that their sales team is in the capable hands of the leaders they selected, it can be tempting for CEOs to delegate strategic decisions to their CRO. Whilst it’s positive to avoid micromanaging, and more pertinently frees up space in the diary, the importance of the CEO’s contribution to strategic decision-making should not be forgotten.
Your vision extends beyond meeting the next quota, whereas your CRO is, rightly so, more concerned with short term tactical gains. When these two perspectives collide, the real magic happens. Your influence on their salespeople shouldn’t cease at the point of hiring the right team leaders, for three reasons:
1. Only when your growth projections permit, should you raise your sales targets
Your CRO raises targets uniformly across the organization. Why is this a problem?
A top-down view of selling is only applicable during transactional sales. Outside of this, your customers are changing, their buying habits are evolving, and you must react accordingly. Act too late, and the only chance your salespeople have to engage with the customer will be at the end of the customer journey. By this point, the customer has already weighed their options and landed on a solution. What bargaining chip is left for your salespeople now? Your price vs your competitors. And there’s only one direction they can take it – down. Your product ultimately becomes a commodity, rather than a valuable asset, and it’s simply a race to offer the cheapest deal.
Going forwards there needs to be more science involved in raising the target. Chasing quotas is what incentivizes your salespeople to close more deals, but is it worth it at the cost of depreciating the quality of your product and your company’s reputation?
2. The wrong leading indicators are being measured
If the customer is redefining how they want to engage with sales, then a traditional activity driven set of KPIs is misleading. For example, it makes more sense to gauge how many prospects are viewing your collateral and how receptive they are to change than counting the calls or visits a rep makes.
Rather than encouraging salespeople to engage highly qualified leads that can be closed quickly, wouldn’t it be more fruitful to set KPIs that are more appropriate to today’s consumer culture? The power of assigning the right leading indicators in shifting the collective mindset of your salespeople should not be underestimated.
Traditional KPIs limit the scope of your sales activity, but KPIs that are in line with modern consumer culture will let your team cast a wider net. When your salespeople set their focus on driving customers to change, they can engage them before they’ve even realized a need for your solution.
3. You need to define the right mix of acquisition, growth and retention
Picture this – it may sound familiar:
- New customer acquisition is slowing down
- The data suggests there is a lot of white space left for you to address yet growth is shifting further from your reach
- Market forces appear to be out of your favour
- Your teams aren’t functioning efficiently
- Costs are too high
- Performance is below par and nobody can clearly explain why
What do you do?
You ask your CRO to determine the cause of the problem – it’s their job to know this, afterall.
Whilst they endeavour to self-diagnose, cash reserves continue to burn away.
The problem is that you are asking the cause of the issue to diagnose its own root cause, whereas the only helpful perspective comes from those who can be truly objective.
The reality of the situation:
Your sales teams are having the wrong conversations with the wrong people at the wrong time. Customer retention is falling to emerging competitors. Whilst you’ve been busy acquiring new customers, so have your competitors. Your team is fighting a rearguard action and as a result growth is being offset by loss of existing clients.
We’ve witnessed countless businesses prioritizing new business sales over growth and retention. Different teams are established in order to support this: a new business team, a renewals team, and a customer success team. Why are these activities operating in silos? An alternative model might support a large corporate customer with multiple divisions where your team can tend to acquisition, growth and retention with a joined-up approach.
In difficult economic times, external pressures drive the need for business growth further. If you can’t offer your salespeople an adequate salary, they’re going to look elsewhere. The CEO must get involved at this point in order to facilitate improvements that will impact deeply, and last longer than the next quarter.
