A Well-Tuned Revenue Strategy Delivers Cost Savings and Growth Upside

Revenue strategy gaps are often exposed when organic growth subsides, an industry space matures, or the economy weakens.

Photo by Yan Krukau from Pexels

By Erika Nolting Young and Rich Brown

A client with cracks in their revenue foundation

A few years ago, a client reached out looking for help because something about their go-to-market (GTM) approach wasn’t working. They had been the leading technology in their category for over a decade, and suddenly small but fast-growing competitors were outpacing this client’s growth and spreading into new market spaces.

The client hired us to assess their go-to-market strategy, processes, and organizational design and tools; uncover what wasn’t working; and provide recommendations on how to address identified issues. As a part of the engagement, we conducted interviews with leaders across sales, sales operations, marketing, product, and other teams involved in GTM strategy, execution, and support.

During interviews, we captured a myriad of quotes like this one:

“There is no strategy tie back to which products are going to sell how much, which clients the revenue will come from, or what the marketing and product plans need to be for the year to support that go-to-market plan.”

What we uncovered was that this client had a revenue strategy problem. There was breakdown between the vision, growth objectives, annual goals, and go-to-market strategy of the company. Communications about the newly minted vision of the company hadn’t impressed upon all leaders and teams yet. This had resulted in a multitude of growth objectives and go-to-market strategies. Senior leaders thought everyone was marching to the same beat, but it quickly became apparent that — while everyone knew by how much the company needed to grow and by when — there were multiple, uncoordinated strategies being deployed by different teams to achieve the target.

There had been little socialization of strategy to ensure all leaders were on board, and incentives were misaligned across teams as well. As a result, many employees involved in go-to-market functions were feeling burned out; they had been furiously spinning their wheels to churn out results faster to keep up with growing competition, and no amount of faster pedaling seemed to produce the necessary results.

Why it matters and what “good” looks like

It is often surprising to people to find out how common this type of problem is in organizations. We see this in varying degrees at many companies. When a business has lots of organic growth, or when the economy of an industry is doing well, they can often get by with this kind of disarray and organizational waste. But as an industry space matures, causing organic growth to dissipate, or when the economy is not strong, revenue strategy gaps can become a big issue. The slowdown of growth this causes can create uncertainty and frustration among employees in the GTM engine, especially sales executives; this can happen at a particularly uncompromising time for a company, when competition is up and hiring budgets are down.

When revenue strategy is done well, we see the following:

1. Vision, growth objectives, annual goals, and product/service priorities are coordinated and clearly articulated.
2. GTM strategy is a collaborative effort among leaders across the go-to-market engine that combines top-down and bottom-up inputs to validate that the senior leadership strategy is viable given the organization’s client relationships, market reach, anticipated deal velocity, sales and marketing skills and tools, and other factors.
3. Role clarity is established to ensure all players in the GTM engine understand their team’s role and their individual role and expected contribution for successful execution of the GTM strategy.
4. A consistent set of signal metrics is identified before go-to-market execution begins so business leaders have a way to understand if their strategy and execution are effective or if changes may be needed to achieve goals and growth objectives. Signal metrics are different than KPIs; they are indicators of whether the business is on track to achieve its KPIs or not.
5. Incentives defined for each GTM function lead to coordinated and aligned behaviors across teams.
6. Processes of teams in the GTM engine are orchestrated by a clear operating model that defines which activities happen, in which order, who is responsible at each stage, and where there are checkpoints to keep teams aligned.
7. Governance — which may be provided by a committee or by operational teams in the GTM engine, such as sales operations or revenue acceleration — ensures tight and consistent integration from vision and goals to product/service priorities, to alignment in the GTM engine, to execution. Those involved in governance track progress and communicate to let teams in the GTM engine know what’s working and when adjustments are needed.

How to seal the cracks

Firming up revenue strategy doesn’t need to be a colossal effort. We typically find that, while there are numerous potential initiatives surfaced through a revenue strategy assessment, there are usually quick wins, longer-term investments, and nice-to-haves that are not as high priority. Many clients will start by tackling the quick wins and a few of the longer-term investment initiatives with the potential to have the greatest impact on growth, customer retention, and employee experience.

Our customer referenced earlier started with a small, eight-week assessment. We gathered information through interviews, reviewing internal artifacts such as GTM strategy decks and product roadmaps, and conducting secondary research. Then we created high-level process maps to break down our understanding of GTM operations and to highlight points of friction. We benchmarked the client’s GTM approach compared to that of other technology companies at different stages of maturity, and we provided examples of what “good” looks like. Last, we conducted a cost-benefit analysis to prioritize initiatives toward improving revenue strategy and go-to-market execution.

Some conditions that enabled this client to commit to a project with us and go forward quickly were:

• Several C-suite leaders had already come to the conclusion that something about their GTM approach wasn’t working, and they came to us united by this belief and ready to analyze and understand what they could do differently.
• Simply asking corporate finance for more budget to throw at hiring, marketing campaigns, or product development was off the table. Deploying more budget for these purposes to resolve a revenue strategy problem is a Band-Aid solution at best. This client had not demonstrated to their corporate finance team an ability to effectively mobilize their GTM engine to stimulate growth at a pace commensurate to years earlier, so finance was not willing to invest more.
• Several functions involved in go-to-market efforts had recently been centralized across two major product lines in the company. The transition imposed by this cost-savings effort set the stage for further assessment of business effectiveness and change.

If you’re reading this and thinking to yourself, “I don’t have oversight or control of all the areas that would need to come together to achieve this,” don’t fret. We speak with many functional leaders who know something isn’t working, but they only have responsibility for part of the GTM engine. In this case, it’s possible to assess in broad strokes what the biggest contributors are to gaps in revenue strategy, prioritize the gaps, and start with what you can control. Or, better yet, we often work with customers to help them raise awareness about revenue strategy gaps with other leaders, develop a business case for change, and build a coalition of support with leaders in the GTM engine.

Achieve your goals, even in a “slowcession”

Whether you choose to start with a narrow focus and expand over time or start with a wide-lens approach to systematically identify and close revenue strategy gaps, sealing these foundational cracks is critical for your organization to achieve its goals and sustain growth.

With the current uncertainty of the economy across many countries, the need for a solid revenue strategy is heightened. In this environment, organizations seek opportunities to sustain or increase margins to counter a sluggish market. Revenue strategy gaps typically result in duplicate efforts, slower-than-intended sales cycles, and confusion between teams, all of which can be costly to an organization. Furthermore, an investment today in strengthening revenue strategy and closing gaps will not only ensure smoother sailing through what could be a rough year, but also set the stage for healthier and accelerated growth as businesses emerge eventually from the “slowcession.”

Slalom is a global consulting firm that helps people and organizations dream bigger, move faster, and build better tomorrows for all. Learn more and reach out today.