Revenue Leadership Actions for Disruptive Times
COVID-19 is presenting revenue leaders with unprecedented challenges.
The landscape of marketing, sales and service is changing on a daily basis as the scope and impact of the pandemic evolves. Yet, there is an important set of leadership actions that transcends today’s environment and applies to any significant market disruption. The actions can be organized into four categories:
- Strategy and Planning
- Coverage and Roles
- Performance Management and Enablement
- Leadership
1. Strategy and Planning
Create Multiple Contingency Plans
Uncertainty as to the duration and severity of the disruption makes contingency planning both incredibly difficult and important. In such a dynamic and tumultuous environment, revenue leaders need to create contingency plans with multiple decision points and potential pathways–a “decision tree” based on realities as they unfold. Determine milestones that, should they occur, trigger specific actions. The contingency tree branches include the following:
- Duration: Scenarios for a relatively quick recovery (e.g., next 1 to 2 months) vs. a much longer disruption (e.g., 6 to 9 months+)
- Severity: Scenarios for a relatively mild vs. severe financial impact, as measured by key internal (e.g., revenue, margin and production rate) and external (e.g., Consumer Confidence Index) indicators.
- Scope: Scenarios based on the number of affected customers, prospects and internal resources.
Contingency plans should not only outline specific actions and their intended results, but also include feedback loops to ensure the plans evolve appropriately. Remember: things will get better; it’s a question of when.
Prioritize Key Customers
The strongest relationships are often galvanized during the most difficult times. Identify and align on the highest priority customers, noting that past volume alone should not be the only variable. For example, customers contributing to emergency relief or those with acute supply chain issues should be considered high priority. Once you establish a prioritized list of key customers, develop a proactive communication and engagement plan for this crucial group.
More broadly, it’s vital to find ways to connect with all of your customers and partners. This may need to be in ways that preclude in-person discussions or events. Take the time and effort to understand the specific impact on their businesses. Formulate a response to mitigate pain points or collaborate on potential ways to weather this current crisis. These actions will not only help forge stronger relationships, but protect your commercial organization’s most valuable asset: your existing customer base.
2. Coverage & Roles
Take Coordination to the Next Level
Everyone is in sales during a crisis. Marketing, sales and service teams must coordinate to ensure the customer is the focus of all coverage efforts. Starting with a “protect-the-base” mindset, revenue leaders must provide a clear view of what customer success means in this environment. Results-based metrics, such as win-rates and bookings, will need to be supplemented with activity-based inputs that ensure sales people maintain or re-kindle relationships and take the time to talk with and listen to customers. These quality conversations are arguably the most important feedback mechanism to better understand the dynamics of a rapidly changing environment.
Update Client-First Plays
Marketing departments can play a crucial role by synthesizing new insights and generating segment-specific messages that speak to particular audiences. These messages serve a two-fold purpose. First, they can be broadcast with tailored points of view through traditional marketing channels. More importantly, pre-populating a playbook with value messages to specific customer types will help field sellers adapt to new channels of outreach, such as video.
Service teams and other customer-facing roles can help maintain a client-first mentality by revisiting key service level agreements (SLAs) such as financing terms, fill rates and customer service levels. Sales leadership should help provide guidance on which SLAs drive highest customer impact.
Make FLSMs a Lynchpin
Front-line sales managers (FLSMs) are one of the most important roles for successfully navigating the disruption. FLSMs will need to alter management styles to ensure evolving strategies and priorities are understood and effectively delivered by the sales teams. With field sellers off the road, FLSMs should heed lessons from inside sales managers and conduct more frequent touchpoints with their direct reports as well as closely monitor their call volumes. As an example, FLSMs should ensure sellers have all key customer account plans updated with specific talk-track messages, target contacts and complete call notes that incorporate any new insights gained.
Recommit to Operations
As in a normal market environment, Revenue (Sales) Operations should be the “traffic cop” for dashboards and analysis. These teams must be even more vigilant in monitoring progress, anticipating additional impacts and preparing to optimize the sales force size and deployment. This includes having contingency plans for:
- Potential workforce reductions
- Unplanned territory vacancies
- Account reassignments
- New hire onboarding and ramp times
3. Performance Management
Team members on the front lines working with customers and partners will confront a range of issues and emotions, ranging from “How do I protect myself and my family?” to “How do I complete my work” and “What will the impact be on my job and pay?” Take into account the full range of short- (e.g., team member safety), medium- (e.g., making sure the organization is ready for the eventual upturn) and long-term (e.g., permanent shifts in the customer engagement model) considerations.
Align the Incentive Compensation Program
Incentive earnings will inevitably fall if customers put purchases on hold. Revenue leaders should consider how best to “protect” seller earnings, as inevitably market conditions will change and sales will be asked to lead the charge. There are several options available based on the expected depth and duration of the disruption, contingency plans referenced above and leadership philosophy. Examples include:
- Providing temporary recoverable or non-recoverable draws for sales people on highly leveraged sales compensation plans (e.g., straight commission, aggressive pay mix)
- Modifying plan mechanics such as thresholds so that incumbents earn incentive dollars sooner
- Creating an alternative plan (or contest or SPIFs) that reflects the priorities and activities incumbents are being asked to focus on
Determine How To Treat Quotas
Leadership can consider a few viable options when it comes to sales quotas in a disruptive environment. These options can be with alignment of the incentive plan or as an independent action.
- Leave the existing quotas in place.
- Reduce overall business plan and proportionately decrease incumbent level quotas. This option is likely the most simple, and is easily explained. It can be done quickly and sends an appropriate and somewhat encouraging message.
- Stack rank sellers’ performance and adjust payout to relative ranking. This allows balanced distribution of attainment regardless of the overall underachievement of current goals. This option strives for fairness and keeps sellers motivated to perform, but could be costly relative to the original plan and budget.
- Award “sales credit” to current quotas. Typically not a great option unless there are some tradeoffs, for example MBO-type metrics in exchange for sales credit.
Review Organization Policies and Procedures
With so many decisions impacting individual team members, take the time to review your basic policies and procedures. Polices such as travel and entertainment may need to be adjusted on an individual, local or global level. Leave of Absences and Sick Leave may need be more generous to support employee health and safety. These signs of goodwill and commitment will also provide downstream benefits (e.g., reduced attrition) when things return to normal.
4. Leadership
Over-communicate
Revenue leaders, in fact leaders in general, must recognize that customers, partners and employees will remember a firm’s response to the disruption. They’ll remember what you say and do after the crisis is over, without regard to the eventual duration, severity and scope of the disruption.
Internally, communicating clear expectations on what must change and why is one of the leader’s primary responsibilities. This includes expectations for performance outcomes but also how people spend their time, including the day-to-day “on-call” cadence with customers.
Balance Empathy With Sense of Urgency
Empathy is defined as the ability to understand another person. Empathy is critical when various constituencies are dealing with a range of personal and professional challenges. But team members also need to understand there is a sense of urgency during the disruption. Urgency to ensure the health and safety of the team. Urgency to protect the base. Urgency to be ready when the disruption passes. A strong leader can provide empathy and ask for urgency at the same time.
With a landscape that seems to change with every passing day, addressing the four categories described above affords revenue leaders the opportunity to weather the disruption and ensure they are best positioned to engage and support their customers, employees and other stakeholders.
Let us know if you have questions about any of the specifics outlined in this article or what actions can help your organization. Contact us.
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