One undisputed outcome of the disruption of the past two years is that buyer behaviors have changed. Brand loyalty is being eclipsed by convenience and values alignment. This has left companies with little choice but to double down on their go-to-market strategies.
According to a recent survey conducted by Chief Executive and Alexander Group, two-thirds of U.S. CEOs rank the acquisition of new customers as their top revenue growth priority this year, well above other strategies.
Yet, the fundamentals of growth still exist. While an important element to consider, the path to success is not simply shifting to a hunting focus. Product and service innovation also play a significant role in maintaining and growing market share. And with rapidly changing customer patterns, it may be wise to ensure acquiring new customers isn’t at the detriment of existing ones.
To that effect, 38% of surveyed CEOs say launching new product/service offerings will be a priority for growth this year. Interestingly, firms with more than $100 million in annual revenue are more focused on innovating within their legacy business, placing significantly higher importance on launching new products/services than their smaller peers (47% vs. 38% overall average).
Another top priority is increasing pricing (for 39% of CEOs surveyed). In the current environment of high inflation and supply chain constraints, pricing is a key commercial focus. However, adjusting pricing creates challenges for both existing customers and new targets. The key to successful pricing strategies is understanding differences between strategy and execution. Often, the best-laid strategies fail because the commercial team lacks the insight or skillset to implement new price actions.
A culture of customer success is also a great way to increase account retention, expansion and overall customer lifetime value. Yet, only 25% of participating CEOs listed it as a priority for growth. Similarly, improving customer segmentation allows matching the right offerings and customers to the optimal coverage based on opportunity, but only 24% of CEOs are focusing on this in the year ahead.
In the end, companies must invest in the right resources to ensure sustainable growth. Strong segmentation model and a keen sense of market share and share of wallet at the account level is required for focus. Best-in-class organizations are investing in customer data and buyer journey analysis in order to stay competitive and ensure an informed and real-time set of interactions with customers.
Digital Investments Are Now a Permanent Line Item
At the time of the survey, 73% of CEOs reported plans to increase their digital technology investments in 2022. Of those, however, the near majority forecasted an increase of no more than 10% over the prior year’s investments.
With only 32% who consider their company to be advanced in its digital maturity, taking steps to increase digital capabilities is a key differentiator going forward. Companies need to be prepared to unlock resources for where it most matters.
According to the survey, the top three digital investments are expected to be in digital marketing, customer data analytics & AI, and sales enablement & tools. Data coming from marketing, service or purchasing channels allows for richer insights to deliver greater value to customers and create targeted messaging. Freeing capital to invest in these is important but taking a coordinated and holistic approach is critical on this journey.
Companies should first seek to align roles, processes and rules of engagement to provide a seamless experience for customers. This requires coordination and collaboration between marketing, sales and service teams.
Agility: The New Go-To-Market Model Mandate
The buyer journey is evolving to become more circular than linear. This requires a coordinated approach from pre-sales to sales to post-sales, and as retention and expansion of customers becomes key, a need to deliver value and proof of ROI to those same customers is necessary to maintain and grow revenue over time.
According to the survey findings, 50% of companies plan to increase their customer success, lead generation and revenue operations roles in 2022. Perhaps not surprising since traditional roles, such as customer service and sales operations, will expand their scope to encompass marketing and service operations.
But the proliferation of new roles also requires new talent profiles, rules of engagement and customer engagement playbooks. Coordination across roles is critical for delivering higher value for customers. To achieve this, best-in-class organizations are focusing on improved productivity from their core revenue-responsible roles.
In addition, as we emerge from the pandemic with limited guidance as to what is to come next, determining the right segments and accounts to cover virtually vs. in-person will be an important part of the strategy. Our findings show more than 40% of companies plan to increase their inside and virtual sales headcount this year, despite the lifting of Covid restrictions across the country.
CEOs say they will keep significant virtual selling time for their representatives going forward. Altogether, 35% anticipate field sellers will spend more than 50% of their time selling virtually, and 27% anticipate they will spend between a quarter and half of their time selling virtually.
Overall, the vast majority of companies expect at least a quarter of their representatives’ selling time will be virtual, indicating a hybrid approach may likely to be the norm across industries in 2022 and beyond.