However, as companies start planning for the 2023 sales cycle, they are adapting their strategies to drive revenue in a business environment now facing widespread economic contraction.

Focusing on profitability and productivity

Companies are keeping a close eye on profitability and productivity. Alexander Group’s research shows that top-line revenue grew faster in 2021 than in previous years, and firms spent less to grow revenue. Companies are optimistic about maintaining this trend: 60% of media firms anticipate increased profitability in 2023.

To grow profitably, leading organizations are prioritizing existing customers, with 63% of media firms surveyed by Alexander Group anticipating a renewed focus on revenue retention and expansion. According to Boostr’s Media Ad Sales Trends report, net revenue retention (NRR) and revenue growth go hand-in-hand. NRR captures the percentage of revenue maintained from existing customers over time, providing a measure of revenue predictability. According to Alexander Group’s internal research, the NRR rate for digital media firms averages around 110%, with leaders as high as 140%.

Efficiency is another crucial driver of profitability. Media companies are looking for more imaginative uses for their sales force, including horizontal integration of capacities and right-sizing of the organization.

To drive productivity, companies are rethinking sales compensation. The most important part of the plan is ensuring the strategic components are aligned with areas of expected growth. Companies review the guiding principles on expected performance distribution (how many sellers are below, at and above goal) and ensure plan mechanics, policies and terms are prepared for a potentially volatile year.

Elevated market uncertainty puts an even greater emphasis on productivity metrics. For successful businesses, establishing a baseline of essential benchmarks provides a foundation from which to measure, and solve for, departures from the norm. Cost of acquisition, NRR and revenue-to-expense ratios are all leading productivity indicators as part of this process.

How companies are upgrading sales processes

In times of uncertainty, organizations help sellers focus on the right buyers to improve selling efficiency. Sellers may flounder if they don’t know accounts, targets, key buyers and levels of influence. Rather than letting sellers speculate on their best targets, companies can leverage a revenue growth mapping process to unlock market potential.

Media firms are embracing the fact that the buyer journey has changed, and sales motions must evolve. People, not accounts, make media buying decisions. Individuals inside and outside the organization set, approve and influence media and advertising budgets; thus, the number of buying entities (BEs) is often more than expected.

To adapt the sales process to target the individuals who make media buying decisions, successful companies frequently use a seller roadmap that alleviates uncertainty and sets performance expectations.

This roadmap starts with determining the account archetype and understanding the level and process for media strategy and buying decisions. Identifying BEs, including white space entities and current accounts, …read more

Source:: Digiday

Author: Aaron