High Growth Expectations in Rapidly Changing Landscape
Corporate leaders are shifting priorities to achieve growth in 2022.
Alexander Group recently surveyed corporate services executives for insight into their revenue expectations for the second half of 2022. Leaders from Corporate Services departments – Marketing, Sales, Human Capital, Staffing, Training and Compliance – are focusing on aggressive returns but will face demanding conditions in their search to capitalize on growth opportunities.
Industry Leaders Expect Double-Digit Growth For 2022
After a a good growth year in 2021, but when only 45% of firms achieved 10% plus growth in 2021, corporate services leaders anticipate much strong results in 2022. Median growth expectations reached 19% for 2022. While many leaders have backed off of this aggressive objective, others remain steadfast in sustaining high, double-digit growth in the remainder of 2022.
Recurring revenue will account for over 70% of their total revenue, requiring companies to focus on customer growth, technology innovations and high-performing sales roles.
The caveat: Go-to-market challenges remain. Nearly 15% of our respondents cited external factors, including decreases in market demand and regulatory changes, as ongoing issues. Pricing pressures and lack of sales enablement tools/technology were noted by 12% of respondents.
Sales process inefficiencies, lack of a strong value proposition and access to customer key decision-makers were also listed as challenges by 10% of research participants.
Top Priorities Include Customer Retention and Acquisition
Aggressive growth expectations require reducing customer churn while acquiring net-new customers. Alexander Group research participants listed these top five focus areas to drive growth in 2022.
- Strategies to maximize customer retention and reduce customer churn – 24%
- New customer acquisition – 24%
- Increased usage and upsell of existing product offerings – 20%
- New product and service offering introduction – 18%
- Cross-sell of existing product offerings – 14%
The caveat: Meeting VOC priorities will determine success. Customers indicate that speed of delivery, trusted relationships and commitment to diversity and sustainability are more important than price. Achieving growth projections requires an intense focus on these priorities. Firms also saw improved support, quantifiable results and continuous innovation as the next-in-line needs.
Automation, Seller Turnover Remains Threats to the Value Proposition
Leaders are revisiting how to deliver on their value proposition in ways that are cost-effective and capture the advanced technology’s sales and productivity promises. Over half of leaders see automation as a primary threat to growth and are responding primarily by:
- Revisiting their pricing models – 21%
- Revising legacy service offerings (except RPA technology) – 18%
- Refining value propositions -16%
- Investing in service delivery efficiency – 14%
- Decreasing cost of delivery – 14%
- Enhancing own offerings with delivery automation technology – 14%
Automation investments are critical, as is evaluating the efficacy of current sellers. Research participants noted that their median sales expense to revenue was 11%, median marketing expense to revenue was 3%, but median seller turnover was 25%. As the importance of long-term customer relationships increases, companies must evaluate their costs and how to control seller turnover in a tight labor market.
The caveat: Leaders must make targeted sales and automation investments. Companies are reviewing investments that will reap the benefits of technology. Currently, overall marketing spend is low, but companies are prioritizing marketing automation, AI/analytics and sales enablement tools.
In addition to technology, leaders are investing in specific roles that add exceptional value for customers. Top focus roles include relationship/strategic account managers, channel partner rep/managers, generalist sales reps, account managers and inside sales roles (hybrid and outbound). New business sales reps are less common but were still highlighted by half of the research participants.
Specialty and support roles are also highly valued and utilized . Sales operations and lead generation are top priorities, being cited as high value by over 70% of research participants. Post-sales relationship managers/CSM are used widely to maximize long-term revenue and customer retention, followed by industry specialist. e-commerce roles are becoming more prominent as nearly half of companies actively and materially utilize them.
Are Your Expectations Aligned with Outsourcing Industry Leaders?
Corporate services is a people-first sector. Industry leaders must make targeted investments to secure recurring revenue while aggressively acquiring new customers who demand alignment with their organizational priorities. Delivering on theses value propositions has never been more challenging – and rewarding.
Double-digit growth requires focused strategies and investments. Discover how your company compares to 50 top-performing leaders by contacting a Business Services practice lead or see how we can help.
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