Step 3: Take a Systems Approach to Sales Capacity
In our first two blog posts in this series we discussed the importance of starting with the customer as a key element for aligning your channel sales and marketing efforts. This includes the need to segment your customers and gain customer insight, by segment, to drive a successful go-to-market strategy. We then outlined the importance of customer feedback for defining strategic options.
Today’s blog post covers how to build sales capacity to effectively address each customer segment.
First, we start by mapping the steps in the sales cycle and identifying who—whether the vendor or the channel partner—is responsible for them for each customer segment. Most organizations break the sales cycle into multiple steps, as shown in the chart above. These steps include lead generation; qualification of potential leads for hand over to sales; pre-sales efforts involving the customer and sales personnel; closing the deal; performing post-sales activities to fully turn over a working solution to the customer; and finally, the follow-on expand and renewal efforts that occur over the customer lifecycle.
Taking a deep dive into the chart, here are three observations to consider:
- The sales cycle steps for enterprise and mid-market customers are essentially the same. There may be differences in complexity or in the time it takes to perform each step, but fundamentally, each step needs to be covered for each customer segment.
- Optimally, who owns responsibility for each step (vendor or channel partner) varies by customer segment. In the enterprise space, the vendor marketing and sales team may want to be heavily involved in the lead generation, qualify and pre-sales steps but then offload most of the remaining steps to channel partners. In the mid-market/SMB space, the primary task is to set up the correct supporting engine to enable the channel partner to take the lead in most steps of the sales cycle.
- Allocate your vendor investment areas differently, depending on customer segment. In enterprise markets, outside sales people and partner enablement resources are the primary drivers for overall sales capacity, with support from other elements as well. In the mid-market/SMB space, marketing demand generation, partner programs, field marketing headcount and partner enablement are the drivers. If you add sales headcount to mid-market segments without the corresponding investments in other areas, you will not see positive results.
The key principles to keep in mind in building sales capacity are:
- Sales capacity is limited to the throughput of the entire system. The system is made up of
- Inside and outside sales people,
- Marketing demand generation dollars,
- Field marketing people to effectively deploy these marketing dollars,
- Partner enablement resources and
- Partner program resources and money to build the value proposition for your channel
- Incremental investments should be put into those areas that are your bottleneck (i.e. constraining your sales capacity) or you will not see a return.
- The highest priority areas for investment differ by customer segment.
Keeping these principles and the concept of customer segmentation in mind while building your go-to-market model will put you light years ahead of your competitors and make you much more profitable. Keep an eye on the blog for part four in our series, which will focus on building your formula for partner success.