The world of commerce is changing exponentially, driven in part by the almost dizzying pace of innovation in technology and financial instruments which underpin modern businesses. Despite the concerns over Brexit, the UK held 13 of Europe’s 34 unicorns (private companies with a value of $1bn or more), according to Tech Nation. To put this in context, with a combined value of £23bn, unicorns based in the UK are worth over £17bn more than those in Germany and France added together.
VC’s play a vital role in enabling organisations to achieve their growth potential. However, despite VC investment providing money, knowledge, experience, and contacts, some organisations who succeed in acquiring investment fail to meet revenue and profit targets. When it comes to flaws in the sales and marketing strategy, there are three common reasons a product or service fails to deliver on forecasted numbers.
- The product is ready for market, but the business is not
For businesses seeking to launch new and innovative products, preparation is essential. Many firms make the mistake of applying old, established operational processes when launching new products. In practice this means while the new product is ready to launch, the business’s sales, marketing, and back office functions need more time to prepare. This is highlighted by the CB Insights report, entitled “State of Innovation”, a Survey of 677 Corporate Strategy Executives, which states companies invest on average 78% of their innovation budget on improving existing processes and products. In other words, when companies wish to enter the market with new products, the supporting business functions often don’t have the investment needed to underpin a successful launch.
To counter this, it is important to create a culture of innovation and collaboration across all business functions during the product development cycle, to focus on effective marketing, sales, delivery, and support of the new product. Too often these vital functions are treated as an afterthought, as all the focus and capital has been directed towards the product itself. This risks leading to consumers cancelling/returning goods, poor reviews, and collapsing sales.
- The product is ready but adequate market testing has not been carried out
While the business may be ready to push the button on a new product launch, the question must be asked, has the right consumer been identified and if so, does the business know how to reach them? Have the sales and marketing team taken the time to understand the prospective customers in terms of how they will use and buy the product in question? Disruptive products often need radically new approaches to tempt and engage with the intended audience.
If the organisation you have invested in has failed to properly test the market, they will not understand who the target audience is and how to reach them. This approach makes any sales and marketing efforts as effective as ‘spitting into the ocean’.
If this situation is identified, developers and marketing departments need to return to the drawing board and ensure the right people are receiving the correct message.
- The sales and marketing strategy is not mature
When a third-party is called in to examine why a business is not delivering on its targets, serious gaps in the sales and marketing strategy are often discovered. For example, a director may believe they have a sales pipeline, when in reality, they simply have a list of names. Little or no content marketing or social media marketing strategies have been used to build authority in the market and connect with potential consumers. And frequently, it is unearthed that although a potential market for the product or service has been identified, the organisation has no clue how to engage them.
Once these weaknesses have been identified, a third-party can provide advice, or in extreme circumstances, take over the sales and marketing leadership. Fantasy pipelines can be addressed, and serious prospects targeted, and a social media and a content marketing strategy put in place, complete with measurable KPIs.
Outside of common issues such as cash-flow problems, it can be hard to identify the cause of why a company is not reaching revenue and profit targets. An independent third party can swiftly zone in on weaknesses within the sales and marketing team and provide concrete solutions to turn the situation around.
Reach Revenue works with business owners, leaders and investors to develop high performing sales and marketing teams aligned to the strategic objectives of their business. To find out how we can help you, please call 0203 858 8030 or email firstname.lastname@example.org