As companies prepare to meet a changed landscape in 2021, the time for “wait and see” is over. We’ve heard time and time again that these are unprecedented times, and they are. In times like these, we know that inaction is costly: In the U.K., private equity-owned companies that invested through the 2008 downturn grew 6-8% faster than their peers.
To weather the current storm, shaping your 2021 go-to-market strategy and commercial model starts with asking these five questions:
- How should you reprioritize your customer segments and specific accounts in the data, for team targeting?
- How can you set, and get, your price in 2021 to adapt with changing customer needs?
- How do you reimagine the customer engagement model to meet this moment for 2021 and beyond? Where do digital tactics fit?
- What are the roles, headcount and incentive structures needed to execute on new strategies and targets?
- How can you build an agile and adaptive operating model to meet future challenges?
In the world “BC” (before COVID-19), a life science services company that markets to medical and law practices, as well as direct to patients for their unique role in healthcare delivery, embarked on a commercial transformation. Coming from a habit of each rep “being their own CEO” and running the local territory, this company took a programmatic approach to guide their sales team, and individual rep productivity (product profit) went up 32% in the first six months and contributed to a year-over-year earnings increase of nearly 25% versus a declining market.
Then COVID-19 hit, and the company’s new sales model was put to the test. Patients had new work conditions and mobility restrictions, law offices went dark and medical practices stopped seeing visitors. The sales team initially felt overwhelmed, but the company leaned on their systematic operating model, where each rep plans weekly actions, guided by best practice tools and weekly coaching. Like every company, it has had to adjust its sales approach, but this operating model has helped maintain productivity, with the necessary flexibility to adjust to the changing market and spur measured action.
Here’s how the leadership team adapted, and what other organizations can learn from them:
- Took a structured sales operating approach to “win each week.” The company is relying on communication more than ever, and their structured weekly communications (including regional calls, manager calls, and 1:1 coaching calls) have been used to quickly address challenges, collaborate and adapt in real time. Similarly, leaders identified weekly goals and actions to give each rep a clear plan to navigate through the uncertainty. They also smoothed the field team’s transition to inside sales by giving reps updated versions of familiar tools, such as a bi-weekly call planner.
- Scrapped and reset the sales incentive plan in a creative way. Reps were compensated on a trailing (six-month) window reflective of how business was built and sustained in the past. Under the pandemic, this was severely penalizing and de-motivating. Leaning on their data science capabilities, the team built a sophisticated economic model to prioritize segments, and then translated the insights into a simple A/B/C/D targeting schema that reps could easily follow. The complexity was put in the background, and the rewards were future-oriented with no rearward penalties for market conditions reps could no longer control. Early returns are excellent with successive months up about 10% in revenue compared to before the pandemic.
The scale of change required to adapt to the new landscape may be overwhelming, and few organizations have the bandwidth to drop current activities for all-hands strategy development, however important the initiative may be.
In our 2020 experience, four-to-six week “sprints” allow the leadership team to narrow focus, quickly gathering data inputs and designing another aspect of the 2021 commercial model.
For example, ZS worked with a “sprint team” of technical specialists, marketing, and sales leaders to design a cross-sell program to help a B-to-B legal services organization adapt to COVID-19 court closures. The sprint approach allowed us to put the sales play together in under five weeks, getting the materials and targets out in the market for immediate feedback (and wins).
In Q4, preliminary sprints can focus on where and how to win (for example, new customer segments and opportunities and the sales actions required to capture this value), with follow-on sprints focused around building the commercial organization to execute this plan (refining sales roles and determining optimal headcount).
Flexibility, along with a strong fundamental process and navigating whatever the market throws your way, will help companies ultimately succeed. As organizations gear up for a 2021 more uncertain than ever, consider what else needs to change to meet the moment.