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Go-to-Market model - the value chain

Written by: Phil Shipperlee

Article Overview: Perhaps the most critical performance factor for any business is its ability to produce a reliable and predictable flow of new and repeat business, sufficient to deliver the financial goals within the business plan. If you’ve followed this series of articles, I hope that by now you will see how market focus, prospecting, creating customers and creating, identifying & pursuing opportunities all contribute to creating a solid foundation on which to build a reliable, predictable sales pipeline. What does matter is that you have available to you the means of determining the future. As Peter Drucker once said “the best way to predict the future is to create it”. So, how much more business might you get if you use the process outlined in previous articles before starting the Opportunity Pursuit process?

Go-to-Market model - the value chain

Perhaps the most critical performance factor for any business is its ability to produce a reliable and predictable flow of new and repeat business, sufficient to deliver the financial goals within the business plan. Many businesses find themselves in the position of looking at the most recent month or quarter and wondering what happened. It does not matter what has already happened, it is now too late to change it. What does matter is that you have available to you the means of determining the future. As Peter Drucker once said “the best way to predict the future is to create it”.

The standard techniques used to address selling problems typically focus on superficial symptoms rather than root causes. The results are usually poor and in any event provide only a short-term transactional solution.
I hope that by now you will see how market focus, prospecting, creating customers and creating, identifying & pursuing opportunities all contribute to creating a solid foundation on which to build a reliable, predictable sales pipeline.

Also, by now you should have a lot of ideas for how you can create a joined up process that turns your Go-to-Market model into a value chain, taking your suspects through a process of qualification and quantification. The flow of orders into your business will be more predictable and you will have a series of leading indicators enabling you to take remedial action if problems are brewing in future months and quarters.

So, how much more business might you get if you use the process outlined in previous articles before starting the Opportunity Pursuit process? It is a little difficult to provide an answer that will be meaningful to all readers. However, what you can expect is some or all of the following:

* If you create customers from your suspects before trying to sell them anything, you will be able to control the relationship more effectively.

* You will identify more quickly opportunities that you cannot win so you can stop wasting your efforts sooner.

* You will find that calculating probabilities for each opportunity will be more accurate, which in turn will provide better forecasting both in terms of the potential revenue value, and also when the order will be taken.

* You will increase your conversion and success rate at all stages of developing the opportunity into an order.

* It will increase the profitability of the business you win.

* Your business will be in control with revenues more predictable well into the future. Early warning signs of a downturn in the sales pipeline will give you time to fix the problem.

The series of articles have provided the makings of a complete go-to-market model for any business. Clearly, you will need to make adjustments to suit your individual business but the general principles will apply to any business. If your business is not working as well as you might like, there is probably a gap or a weakness in your go-to-market model. The whole process must be contiguous, creating a continuous flow of new customers and potential orders at one end of the pipeline and a supply of actual orders at the other. This is in effect a value chain running through the heart of your business.

The system outlined in the previous articles will give you sufficient advanced information to spot problems and predict downturns in revenue giving you time to act to resolve the problems or to reduce costs.

Once you have a dependable pipeline you can start to do some detailed planning and forecasting. At least some of the KPIs used in the business should be around the sales pipeline. One that I always find useful is “book to bill” ratio. This simply takes the value of orders taken in the month and divides it by the revenue billed or recognised in the month. A number greater than 1 is good and less is bad as you will be burning up order book faster than you are replacing it. In addition to doing this monthly, it is also good to do it quarterly or better still on a rolling basis.

Another measure that you might like to try involves looking at the value of the weighted sales pipeline and keeping a running total month on month. The weighting is arrived at by multiplying the potential order value by the probability. As with “book to bill”, measuring the weighted value of the pipeline gives an early warning sign if things are turning down.

But hey! Implementing the model may begin to create a “selling engine” that is big enough for your business, both now and in the future, but there are other elements which also influence performance and the capacity of the selling engine to achieve the key targets for the business. So don’t forget the rally driver, the route map and the pit-stop! Make sure the sales people are carefully chosen, well trained and well managed. Also make sure the sales people are well supported internally with, for instance, pre-sales support staff and externally with good reliable and relevant market information.


A final thought.
Throughout this series of articles we have talked about the importance of information in the selling process. However, a key source of readily available and very valuable information is often neglected or treated only very superficially. That source is the Win/Loss review where you find out from prospects why you won or lost. Don’t let the sales person call and casually ask why did we lose or win – it needs to be a thorough process that is executed in a professional and non-emotional way. Arrange an appointment or telephone call to do it, make sure the customer has allocated the time and have a proper structure and set of questions ready. Consider using an external expert or a senior manger to do this. For really important cases get the CEO, MD, FD or other relevant director to do this. And yes, do ask why you won as well as why you lost – you may get some surprises but you will be better armed to deliver the work for this customer as well as better equipped to win the next one.

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