As a VP at GE and Director of Product Management at IHS I had my first experience having responsibility for a P&L, and one of the biggest things I learned was the how to use the concept profit levers. When I say profit levers, I am talking about the “levers you can pull” to increase your profit, the things that can impact profitability like cutting costs, increasing prices, decreasing prices to increase units, etc. These concepts helped me understand the options I had when trying to hit (and exceed) my profit targets and make decisions quickly.
Let us now take this concept of levers and focus it on Growth. In my mind, the concept is very analogous, if we want to drive growth, we can look at the key areas that affect growth we can effect. For the concept of Growth Levers in this post, I am going to stay broad, because if we are doing triage for growth we want to start by identifying the broad levers to focus on. Then we can dig into an area to identify more granular levers. With this in mind, we see three key levers for Growth (from tactical to strategic): Sales & Marketing Execution, Product, and Strategy. Let’s take a closer look at each of these.
Sales & Marketing Execution – Sales & Marketing Execution often is the first-place companies look at and address when it comes to growth. Whether it is changing Sales or Marketing leadership, bringing in a consultant to train or help improve execution, add resources, or some other tactics. It is extremely common for companies to focus efforts on improving growth by starting with Sales & Marketing Execution.
Product – Products are the solutions we are selling to our customers. Whether it is a product concept that does not resonate with prospects, competitors with superior features/value, poor customer experience, or something else, product strategy and delivery can have a major impact on growth for the good or bad.
Strategy – Corporate and Market Strategy are the foundation that our Products, Sales and Marketing are all based on. Whether it is not having a clear focus on our Corporate Strategy including core competencies, differentiation and target markets, or lacking definition in our Market Strategy including Market Segmentations, Buyer Personas, Market Opportunities and Positioning, Strategy can have a major impact on the success of a Product, Marketing Campaign or Sales Efforts.
With these areas defined, how do you determine which of these levers you should start with? Often people start the conversation with Sales, but Sales may have valid complaints about the leads (number and/or quality) they get from Marketing or competitive weaknesses in the Product. How do you know where to start?
The simple reality is that if you do not have a clear focused Corporate Strategy and well-defined Market Strategy, Product will suffer and in turn so will Sales & Marketing. It does not matter how much budget you throw at your Sales and Marketing efforts, if the Corporate and Market strategies are not right your efforts will have minimal return. If you have a product that does not resonate, is overpriced, or has competitive weaknesses, Sales and Marketing cannot overcome these hurdles. Even with a good Strategy, Product, and Sale & Marketing organization, execution is impacted if Marketing is not enabled with the details and context around target Market Segments, Personas and Value Propositions. Sales is not enabled with qualification questions, stories, thought leadership, and tools to help them navigate the sales process efficiently. In turn, too often Sales & Marketing take the fall for something outside of their control.
To determine which of these levers to start with we recommend to our clients two specific activities which both can be done within 30 days. The first activity is a Go-To-Market Data Audit. Specifically, we are looking for the conversion rates from: Campaign to Lead; Lead to Qualified Lead; and Qualified Lead to Closed Sale. Understanding where a hole may be in this process can help identify if it is a Strategy, Product or Sales & Marketing issue exists. The second activity is to complete at least six (6) to ten (10) Win/Loss Interviews. Specifically, we are looking for insight into the perceptions prospects had when they made their decisions, which can help identify product weaknesses or strengths, pricing issues, competitive differentiation and more. When you bring together the campaign-pipeline analysis and the findings from the Win/Loss Interviews you will know which lever you should start with to improve the course of your growth.
If you are trying to figure out which lever you should start with, check out our Market Opportunity Optimization – MO2 offering ( http://www.inventisstrategies.com/mo2.html) where we can conduct a Go-To-Market Data Audit and Win/Loss interviews to understand which Growth Lever to start with, and put an action plan in place to start driving growth.
If you are interested in learning more about how you can apply the three levers of growth to your business, or just want to talk about Go-To-Market Data Audits or Win/Loss Analysis, don’t hesitate to e-mail me at email@example.com. I always enjoy a good conversation about getting to growth.
Insights into building great products and choosing the right markets to grow.