The COVID-19 pandemic created instant havoc around the world — sending humanity scrambling for cover, and slowing the economy to a standstill with no defined timetable for a recovery. With virtually no business or vertical untouched, the pressure is on to reduce costs and deliver on financial commitments, despite the current crisis.
As a CEO struggling to find a glimmer of hope in the lining of the dark clouds, the fundamental question is this: How do you balance short-term cash flow needs against the investment required for the future success of the business? Though today’s challenges represent an acute example of this conundrum, we have seen a very similar threat before. For more than 20 years, companies in various industries have grappled with the challenge of how to manage the costs and impacts of digital disruption — with often devastating results for the incumbents. One need look no further than the print-to-digital migration in the media industry. More nimble digital-native businesses have experienced great success, while traditional media – such as magazines and local newspapers – have been fighting for survival.
Another clear example is the shift from wireline to wireless telecommunications services. In 2005, AT&T was literally weeks away from bankruptcy when it was bought by its former subsidiary, Southwestern Bell, after AT&T failed to make the right strategic pivot necessary for success in a new digital world.
Now, you have a unique opportunity to learn lessons from those before you who had to make tough decisions, change entire business structures, and overcome long histories of “the way things are,” in order to survive and thrive through these digital disruptions. While the driver of the pandemic challenge is unique, the implications and necessary actions to recover are very familiar to those who have lived through digital disruption — and are worthy of your consideration.
As you manage through the crisis and lean into the post-pandemic future, you will want to follow a process for retooling your business practices. I recommend the Growth Gears methodology – pioneered by Chief Outsiders’ founders Art Saxby and Pete Hayes – which espouses a three-step approach: A framework for gathering the necessary insights for success, leveraging those insights to create the right business strategy for the future, and executing with excellence. In this Guide, I speak to a very specific aspect of the execution gear – the optimization of your combined investment in sales and marketing to grow revenues.
The underlying premise that you must consider to optimally manage growth from your revenue-producing expenses in the coming months is to examine the combination of sales and marketing expenses, and to determine how you can improve the collective investment, rather than considering these expenses as two separate budget lines to be managed in isolation.
Once you accept this premise, you can bucket your improvement opportunities into seven broad categories for optimization. While each business is different, odds are very good that some, if not all, of these opportunities will be relevant to your business.
In a series of forthcoming blogs, my goal is to help you achieve the right balance of maximizing revenue production value while minimizing costs from the combined sales and marketing expense line.
It is my hope that you can achieve this balance today by leveraging, and applying, a series of seven proven strategies:
The blogs that follow will detail each strategy, and will help you to start applying them now by providing insights and questions to consider as you navigate the path from immediate pain mitigation, to mid-term survival, to longer-term prosperous growth.
How is your company balancing expenses against future investment in this new, unfamiliar territory?