The Commercial Ratio
Sales and Marketing Leaders,
You are both responsible for driving revenue growth. To investors, your spending is two sides of the same coin – drive the commercial system of the business.
COVID has put much focus on the overall effectiveness of sales and marketing spending.
It’s time to talk with leaders in your organization about the combined impact of sales and marketing on growth.
In the recent work by Growth Enablement, they found the overwhelming majority of businesses are currently operating well under expected results. This is a rare opportunity – where preparing a 2-3 year roadmap for improving sales and marketing performance will be welcomed by your boards.
Important points for The Commercial Ratio
1) There is a renewed focus on sales and marketing to drive profitable growth by investors.
2) There is not one person accountable for achieving profitable growth, so there are many people involved with different lenses (finance, marketing, CEO, BUs, sales).
3) Sales and marketing spending is mostly driven by activities with little analysis.
4) Many, many different functional groups prescribe activities that create random acts of sales enablement.
5) These random acts are not coordinated, so they confuse salespeople and customers – creating waste and inefficiency.
To address this, sales and marketing costs need to be looked at as investments in revenue growth, not budget to be managed to control expenses.
This shift has to happen while also making the targeted investment to repair damaged pipelines.
The commercial ratio provides the north star to have an uncomfortable conversation within your company.