If and when you decide to sell your company, will potential buyers see your current sales and marketing processes as assets or liabilities? In other words, are they processes that new owners can rely on for growth and profit or that they have to fix?
Companies and investors looking to buy other companies always do financial due diligence. Those numbers have to be accurate and make sense for buyers. But what about marketing and sales due diligence? How did your business get those numbers, how does it ensure profitability and growth year after year, and how can the buyer be sure success will still be there long after you leave?
Key Point: Even if you’re not ready to sell your company—or don’t ever plan to be ready—examining these processes on a regular basis will support your success right now. Specifically, the alignment of sales and marketing is becoming more and more important—and getting more attention as a benchmark of corporate effectiveness. Competition today requires that the two areas talk, listen, and act together to achieve a company’s full potential.
Depending on a buyer’s goals, your ability to demonstrate how you consistently reach your sales and profit targets can significantly impact how much you can sell your business for, perhaps even whether you can sell it at all. Is your company’s success due to your industry contacts and personality? Is it because of one or two big customers? Is it a first-mover advantage thanks to a new product or market?
Each of those reasons is valid, during the time you’re running the business. But what about when a new owner takes over? It’s unlikely that the new management team will have the same connections and charisma, especially if you’re the founder. It’s also unlikely that, if they’re experienced dealmakers, they’ll be comfortable depending so much on so few customers. While they might have new product or market ideas, it will take time to compensate for your disappearing first-mover advantage.
They will be more comfortable, though, knowing that the business can run very well without you. (No offense.) If it can, it’s a testament to your capabilities: You’ve built a truly sustainable operation. If it can’t, then potential buyers have a lot more to think about before writing a check.
The best way to demonstrate you have built that kind of business is to show exactly how you’re doing it. And showing off your processes for marketing and selling is one of the best ways to do that. After all, everyone understands sales growth. (Effective operations processes count, too. But traditionally they’re more concrete in a step-by-step way.)
So, what are those sales and marketing processes and how can you make sure you have them? There are essentially three: marketing, sales, and marketing and sales alignment. In other words, the complete business development package. All three are necessary to realize full topline (or, for nonprofits, mission and revenue) potential. We’ll spend more time on alignment here, since most companies don’t even recognize that misalignment could be their biggest topline obstacle.
But first, since “nothing happens in business until somebody sells something,” let’s talk about sales processes. Do you have established approaches to prospecting, discovery, presenting, and closing? How about retaining customers after the sale: Who’s responsible—the rep who made the sale or inside service people? Finally, is the sales process transactional or consultative? Consultative selling skills and a custom sales process will create value for you now as well as later for any new buyers. If your sales process is hit or miss, better take another look before you put your business on the market. (Our popular consultative sales training course, FOCIS®, can help you build those skills and custom process.)
And what about marketing? We consider marketing anything that enhances the ability to make a sale. That sounds pretty broad, but there are clear activities. They include lead generation, building market credibility and visibility, messaging development and monitoring, and new product and market development. Depending on your business and industry, you might also pursue subcategories such trade shows, market research, and thought leadership.
Established processes in both sales and marketing are essential. What might impress potential buyers most, however, is a process that leverages sales and marketing by aligning them in specific ways.
The good news is that valid research data are available on the value of aligning sales and marketing processes. Spoiler Alert: Alignment works.
Companies with aligned sales and marketing efforts—and shared goals and metrics—see a 25% increase in quota achievement, 15% increase in win rate, and a 27% faster three-year profit growth. (Forrester) Other research shows 36% more business growth (Sirius Decisions) and 36% higher customer retention (MarketingProfs).
What is alignment in business development? The idea is pretty much commonsense, when you think about it. For example: Shouldn’t your salespeople know when marketing is dropping a promotion that prospects and customers might be asking them about? Answer: Of course. And that means when, where, to whom, and the details of special offers and deadlines. Will marketing be producing targeted sales support materials as leave-behinds as well as social media offers? Will there be prizes or door-opening mailings or downloads salespeople can ask about to start conversations? If you don’t know, you’re not aligned, and you’re not nearly as competitive as you could be.
So what, you might be thinking, we’ve done OK for a long time. Why change? What you’ve been doing has worked for you. But “OK” probably won’t be enough to excite potential dealmakers or buyers.
In addition to uncoordinated promotions, what other challenges do misaligned companies face? For one thing, the metrics that sales and marketing managers use to measure their departments’ functional success don’t necessarily measure corporate success. That means the two teams are not leveraging their work to achieve joint corporate goals as one team. (Hint: “a bigger topline” doesn’t qualify as a goal, joint or otherwise.)
What can the two areas do? They can meet regularly face-to-face, phone-to-phone, or screen-to-screen to at the least announce their planned activities three months out or, better, to share perspectives and information about the marketplace. If salespeople are listening and asking the right questions, they’re invaluable in gathering intelligence about problems the market is facing now or will face in the future. After all, they have the most direct contact with the customer base. Good alignment would have salespeople reporting what they find to marketing at regular intervals and in regular formats.
In consultation with sales, marketing is best positioned to figure out how to use that information. Better alignment would be that, ongoing, sales and marketing work together to refine just what information will be most useful. Most important, the sales process must be in alignment with the sales support materials created by marketing—PowerPoints, leave-behinds, and others.
As an owner, CEO, or president, your role is, as always, to lead the way or at least get the ball rolling. If you do, everyone will be much better off now—even if you aren’t planning to sell your company in the future.
For more information or to discuss your company’s challenges, just contact Phil Krone or John McDermott at firstname.lastname@example.org or email@example.com or call them at 847-446-0008 (Ext. 1 for Phil; Ext. 8 for John.)
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