The finish to an unprecedented year is quickly approaching. You and the management team of your portfolio companies are finalizing 2021 budgets. Now is a great time of the year to plan and start executing your fast start for the new year. There are multiple beneficial reasons to put more effort into the first quarter.
Three key reasons are:
- In many of your portfolio companies, a dollar of revenue added in Q1 is more valuable than a dollar added in late 2021. Creative strategies and tactics that enable sales early in the year will yield highly profitable revenue throughout the year.
- Highly tenured sales forces are significantly more productive than new hires. Therefore, retention of top performing commercial talent should be a goal of any organization. A strong start to the new year helps to ensure that sales compensation plans reward early overachieving reps. Early payouts usually creates positive momentum and encourages behaviors to max-out sales incentives, which improves seller retention. A critical factor in long term productivity gains.
- A winning environment established early in the year, creates team-wide momentum to exceed annual budgeted objectives. Like a rising tide lifting all boats, early success in 2021 usually creates long term motivational success throughout the year.
The key question is: “How should your portfolio companies prepare today for a quick start in 2021?”
Below are our latest best practices for your “C-Suite” to consider.
1. Laser Focused Prospect Targeting
Top performing salespeople do not waste their time on unqualified prospects. Instead, they ruthlessly pursue accounts that have the highest propensity to buy. A dynamic market segmentation and account scoring system driven by smart statistical modeling can provide salespeople with the precise accounts to target. The odds of overachievement against any objective occur when the goal is clearly identified. The same is true in selling. When accounts that have the highest propensity to buy (Tier 1 Accounts) are identified for a seller, and explained why they are Tier 1, the seller has a clear path toward their target and the selling knowledge on how to approach the high propensity target.
Now is the time to execute a data-led account segmentation exercise.
For more details on account segmentation, see our “Agile Segmentation” whitepaper.
2. Enabling Sales Success
The data derived during account segmentation and scoring exercise can also be used as fuel for a marketing engine. When high propensity accounts are fed into an automated marketing campaign environment, the output usually results in your best opportunities receiving your best messaging. Dollars invested in marketing campaigns generate above-average returns when the messages are focused on Tier 1 and Tier 2 type accounts. Good content dripped onto high propensity targets over time, enables your sellers to approach their prospects with “door opening” confidence and a consistent message increasing their effectiveness.
The close of 2020 is the perfect time to start a well-organized, data-led, sales enablement machine.
3. Coordinated Promotions and Bundling
The variables that are used to create a highly effective account segmentation and scoring system can include data such as which clients were won in the past, what products did they buy, and at what price. Then, applying similar data science with these variables you can determine what new year promotions you can run on a single product, or bundle of products, and at what profit optimizing price(s) to use. Coordinated promotions executed early in 2021 create market energy with your future clients and your sales force. They sometimes move a buyer who might not have been in a buying window, to act and engage in a sales process earlier than anticipated. This can put the competition on their heels and enable your sellers to take market share.
4. Incentives and recognition
The last quarter of 2020 is a great time to plan for incremental incentives and recognition programs which will shape the selling behaviors in the first quarter of 2021. Programs that recognize above target, incremental performance with incentives create energy within a sales force. When these incentives are well communicated and top performance is recognized consistently, transformational behavioral patterns occur within your commercial team. Simple additional monetary recognition or other simple tokens of overachievement are effective. However, if the budget permits, consider a recognition program that rewards the top Q1 performers and their loved ones with extravagant recognition. Recognition is inexpensive and top performers thrive on it. The use of enterprise-wide recognition systems enable motivational communication.
Prioritizing these four components can help to ensure a strong start to 2021. The common thread is leveraging data to make these components more effective. If your internal data capabilities are limited, consider finding a partner who uses smart-data along with commercial operational experience to assist with your Q4 preparation.
Revenue Vision Partners (RVP) blends over 75 years of REAL revenue leadership experience with hundreds of successful consulting engagements. We were founded to focus on the commercial challenges faced by mid-market organizations in growing their top line.