Sales & Marketing Strategy
9 Questions Executives Should be Asking During Sales Reviews
by William Aimone
The QBR (quarterly business review) is the bane of every salesperson’s and finance executive’s existence. Salespeople are pushed by their managers to meet or exceed mostly unrealistic expectations for the upcoming quarter in terms of expected deals to close in the sales pipeline. The process is riddled with a combination of sandbagging, happy ears, holdovers, and misunderstood opportunities.
It seems there are few ways to tell whether a multi-million-dollar deal will close in the upcoming quarter, slide into the following quarter, or fall into a competitor’s hands. There is rarely a way to know if the multi-million-dollar deal is real. All a finance executive can do is trust the sales managers’ pipeline and mark the deal in the forecast.
However, behind every sales pipeline is the real story. Here are some tips to help finance executives to engage in the QBR, reveal a more realistic sales forecast, and improve the sales process.
Most high dollar sales involve multiple decision makers inside the customer organization. Understanding with whom the sales team has engaged within the organization will provide greater insight into how realistic the forecast is.
- Question 1: Who is the economic buyer (the individual with the budget and authority to purchase)? It’s a red flag if the sales team says the champion and economic buyer are one and the same. Every customer’s economic buyer has someone influencing their buying decisions.
- Question 2: What is the relationship between your customer champion and the economic buyer? A sales representative may have a well-intentioned champion inside the customer organization providing assurance of the sale. But is the sales team’s customer contact an influencer, or are they just a coach? A customer coach is different than a customer champion. A coach can feed valuable information to the sales team, but lack the ability to influence the buying decision.
- Question 3: Who is your closest competitor’s champion? Too often, sales teams have blinders on when it comes to the relationship between influencers and the competition. It’s a red flag if the sales team cannot clearly identify the competitor’s champion. Another influencer inside the customer organization must be championing the competition, or else the competition would not be engaged.
Every large purchase has a tangible business case, whether documented or not. Now is the time to put yourself in the customer CFO’s position to determine the business case (why a customer would spend the money).
- Question 1: What are you presenting to the customer as the business case for buying from us vs. the competition? This is where the sales team should be able to summarize a few metrics that reflect a positive ROI for the customer. A clearly defined set of customer return metrics are a strong indication of momentum for the sale.
- Question 2: How does our business case align with the customer’s pain points? Identifying customer pain points is the typical first step in any sales process. Great salespeople love to instill the FUD factor (fear, uncertainty, and doubt) in the customer’s mind. To move a sale forward in the pipeline, the customer business case must align with the initial pain points identified early on.
- Question 3: Have you presented our business case to the economic buyer? This question is a double whammy. Not only are you asking if the sales team has met the economic buyer, but also if the buyer has bought into the business case. If neither have happened, the sale is not worth forecasting.
Deals slipping into later quarters is a significant factor in missing sales forecasts. “Your customer’s timing isn’t always the same as your timing” is an old sales adage. Just asking when the deal will close is not enough. There are some probing questions to ask to understand the probability of delay.
- Question 1: What are the steps in your customer’s buying process? The sales team should be able to clearly articulate who needs to sign off and what steps are necessary. This includes legal, procurement, IT, and possibly finance departments. If the sales team does not understand the customer buying process, expect delays to a future quarter or a loss.
- Question 2: Does the customer have all our paperwork, and do we have theirs? Paperwork is the primary reason for most delayed deals the final days of a quarter. Surprises from the customer legal or procurement department asking for signature of regulatory or industry documents can get caught up in your legal department for review and vice versa. Shuffling paperwork for large deals wastes months in closing a sale.
- Question 3: Has our economic buyer have the sale budgeted or forecasted for the next quarter? In other words, does the customer CFO know they will be writing a big check next quarter? This is often difficult for a sales team to know, but a good salesperson will ask that question sooner than later.
If the sales team cannot clearly answer these questions, the deal is likely at risk. Not only are these questions valuable for developing a more reliable sales forecast, but they are also learning opportunities for your sales team. These questions should motivate your sales team to engage customers in more robust conversations and improve the probably of closing deals.
The Power of Storytelling for Business Development Teams
by Alan Quintero
Helping a prospect understand how your product or service will change their life is one of a salesperson’s most difficult tasks. Fortunately, there’s a powerful tool leaders can use: storytelling. Appropriately, well begin with a story…
The Power of Stories
Jesus lived on this earth until approximately AD 30. Most scholars believe the books of the New Testament were not put into writing until AD 50 or 100. However, the challenge of remembering the events of Jesus’ life did not end. The stories of the New Testament were primarily passed down orally for 300 years, because copying the gospels by hand was banned until the emperor Constantine allowed it in AD 325. Until the invention of the western printing press in 1439, the Bible was copied primarily by hand, and few people owned a copy. For almost 1,400 years, the stories in the New Testament were mostly learned through storytelling. Today, I would venture to say that most people in western civilizations can recite one or more stories from the Bible. That, dear reader, is some powerful storytelling.
Here’s a more recent example. Steve Epstein was a lawyer for the U.S. Department of Defense and in charge of the Standards of Conduct Office. When he conducted training, he found that reciting the rules alone wasn’t working. The message didn’t seem to stick. He created the “Encyclopedia of Ethical Failures” in which he collected stories of compliance failures in chapters titled “Bribery,” “Abuse of Power,” and the like. Here’s a real gem from the encyclopedia:
“A military officer was reprimanded for faking his own death to end an affair. Worthy of a plot in a daytime soap-opera, a Navy Commander began seeing a woman that he had met on a dating website. The Commander neglected to tell the woman that he was married with kids. After six months, the Commander grew tired of the relationship and attempted to end it by sending a fictitious e-mail to his lover informing her that he had been killed. The Commander then relocated to Connecticut to start a new assignment. Upon receipt of the letter, his mistress showed up at the Commander’s house to pay her respects only to be informed by the new owners of the Commander’s reassignment and new location. The Commander received a punitive letter of reprimand and lost his submarine command.”
This story, although better than just reciting policy statements, can still be improved. We’ll look more into that later.
Why Stories Work
In 1944, Heider and Simmel conducted a study that showed that our brains are wired for stories. They showed a movie to groups of students (you can see the movie here) where silent geometric shapes moved around the screen. One group was given directions to describe the story they saw. The other group was given little direction prior to seeing the movie, then was asked to describe what they saw. Not surprisingly, there was little difference between the two groups. They both saw the story of an angry triangle’s confrontation with a friendly triangle and circle.
This experiment shows how important placing data into the context of a story is to our brain. In fact, 65% of our conversations are stories, primarily in the form of gossip. Why?
When processing facts, only two areas of our brains are engaged. These areas do nothing more than decode the words we hear into their dictionary meaning. But when we listen to an effective story, many other parts of the brain are activated. This results in interesting brain activity:
- Neural coupling: Neural coupling allows the listener to turn words into virtual experiences. For example, smell words such as lavender and cinnamon activate the smell centers of the brain as if the listener had actually smelled them. Similarly, using active sentences such as, “Bob kicked the ball,” activate the portion of the listener’s motor area associated with leg motion.
- Mirroring: The power of neural coupling lets an effect called mirroring take place. Mirroring allows a storyteller to relate personal experiences directly with the listener. Since the motion and sensory areas of the brain are activated by action and sensory descriptive words, a storyteller can almost recreate their reality in a listener’s brain by using those words. When a storyteller relates an effective story, listeners’ brains are literally living those events.
- Dopamine: Finally, the brain releases dopamine when it experiences an emotional event—even through storytelling. Dopamine imprints a memory and makes the event easier to remember with more clarity. This is why saying, “Don’t go near that dog,” is not as effective as saying, “My friend was mauled by that slobbery, mean dog, so stay away.”
The combination of neural coupling, mirroring, and dopamine makes storytelling 22x more effective in helping the listener retain information than data alone.
Fast & Slow Thinking
Humans aren’t rational beings by default. Our brain operates from two systems: Fast thinking (system 1) and slow thinking (system 2). Fast thinking is intuitive and requires less energy, so it’s our brain’s default. This system allows you to talk while driving your car, play the guitar without looking at the strings, or know that 2+2=4.
Slow thinking is the rational and deliberate system. This system uses significantly more energy, and it’s not our default. Slow thinking makes you think through a process or figure out a problem. It’s how the brain operates when you try to calculate 17 x 54 (which is 918) or learn a new skill, like driving a car. You have to think through every step and may feel drained when it’s all said and done. But during this learning, the brain is rewiring itself. New connections are made until the new skill can be performed without thought.
In this age, fast thinking is the default. If our caveman ancestors used slow thinking for everything, we wouldn’t be here today. They would have been eaten by saber-toothed tigers while they thought about how to react when they saw one.
These peculiarities in brain function are why flight simulators work for training an aircraft pilot. Without first practicing in a flight simulator, a mistake by a first-time pilot while landing in an unfamiliar airport could result in death, fire, and mayhem. But with a flight simulator, the same pilot can try and fail many times without anyone getting hurt. All the while, the pilot’s brain is rewiring to be able to perform the real landing.
Stories work like flight simulators on our brains. Because a well-crafted story causes our brains to activate through mirroring, stories take us into intense simulations of situations that we experience in parallel to reality. Often, we can react using our fast-thinking brain when exposed to similar real-life situations.
Connecting Through Stories
In his book “I and Thou,” the German philosopher Martin Buber states that humans are defined by two pairs: I-Thou and I-It.
Our relationship with things (I-It) separates us from objects. Our relationship with others (I-Thou) eliminates boundaries between us. That’s why, even if someone is an extreme naturalist, they’ll have no qualms about cutting down a tree for firewood to warm their cold family. The I-Thou connection they have with their family bonds them together, while the I-It relationship with the tree separates them from the tree.
Storytelling allows us to see the subject of the story in an I-Thou relationship instead of an I-It relationship. When implementing change in an organization, simply putting lessons learned into policies and procedures keeps us separated from the results and doesn’t create a sustainable culture. Understanding the “thou” behind a story builds a lasting connection.
In the medical field, many hospitals are now using this concept to avoid medical mistakes. Instead of referring to patients solely by their medical condition (i.e., “the broken leg in room 2”), staff is encouraged to build the story behind the patient in their charts and conversations. This staff-patient connection has been shown to reduce the number of medical errors.
Elements of a Great Story
The steps to building a great story can by remembered through the acronym CAR, which stands for context, action, and results.
Context sets the background for the story. When and where did it happen? Who’s the main character? What does your character want to accomplish? Who’s the villain, or what stands in your character’s way? The main character in your story needs to be someone the audience can connect with, and the villain, whether a person or situation, needs to present a real challenge.
Action is the substance of your story. What does your character do? Action must include an obstacle, setback, or failure.
Result is where you reveal your character’s fate. To be effective, you must subtly give the moral of the story.
To be fully effective, you must remember why stories work. Create an experience that induces mirroring through action and sensory words and avoid clichés. Engage the audience by illustrating a real struggle. Pin your character against real villains. Admit flaws. Rosy pictures are boring.
Next time you’re in a movie theater, look around you and watch the people. If the movie is effectively telling a story, you will see everyone reacting as a single organism. They will all laugh at the same time, flinch together, or gasp simultaneously. A great story builds a common thread. The story doesn’t even have to be told to a group all together. Think about the connection you feel with others who also saw the latest blockbuster movie. You don’t have to be in the same theater to share the experience.
The power of storytelling is timeless. Stories continue to build compelling reasons to change, especially when engaging sales prospects and retaining current customers. An effective sales strategy and a strong sales pipeline are only possible with the transformative power of story.
3 Considerations When Selecting the Right B2B Sales Methodology
by Allie Aimone
Dozens of sales models and selling frameworks claim to be the ultimate approach for guiding your sales team to success. These include MEDDIC, NEAT, SNAP, Consultative Selling, SPIN Selling, and Sandler, among others. Each sales methodology has its merits, and none are considered better than the rest. So how do you pick or modify the right one?
Finding the right sales methodology requires the following steps:
- Defining a sales philosophy
- Identifying and defining existing sales pain points
- Revisiting the sales organization structure
Create a Clear Philosophy
Many executives waffle on their sales philosophy, which causes sales reps to feel like chickens with their heads cut off. When times are tough, executives expect their sales team to quickly adapt and find deals they otherwise wouldn’t touch. This is usually a recipe for disaster. The right sales philosophy clearly defines the combined attributes of the right products to sell, the right opportunities to pursue, and the right targets to engage.
Your sales team shouldn’t waste time on an opportunity if it doesn’t support the philosophy. Does your company respond to blind RFPs? What deal size is too small? Are there industries where your product should not be introduced? The philosophy also includes how you engage with your prospects. What should your prospects share (or not share) about current customers? How should your reps engage with a customer? Make sure your sales team clearly understands the sales philosophy and their values align accordingly.
Ultimately, the sales philosophy will drive you to the right methodology. For example, if you’re more willing to walk away from small deals and want your sales team to focus on high impact deals, the MEDDIC or Miller Heiman approach might be a better fit than others.
Identify and Define Pain Points
Where are your sales teams struggling? Map out the current sales process and do a root cause analysis on losses or where prospects are not advancing. Is your team struggling to get buyers to share pain points? Are they unable to get in front of the economic buyer?
One of our service clients implemented the BANT framework for their team (I will call them Proserve to protect their name). Although Proserve followed the BANT framework as prescribed, sales reps missed opportunities because they were the last competitor to the table.
Proserve’s competitors were in early working with prospects to shape the deal and establish the budget and value proposition. At that point, Proserve’s competitors were already trusted advisors. Once the opportunity showed up on Proserve’s radar, the budget was already established and Proserve’s bid became column fodder for their prospects. Proserve was able establish a budget, but they passed on deals where a budget had not been established by the prospect.
Proserv began to examine other methodologies and incorporate techniques from the Challenger Sale Model. The Challenger Model was used to engage customers early and challenge them to think of new ways of improving efficiency. This allowed Proserve sales reps to begin discussions early, become trusted advisors, and turn the tables on competitors.
Define Organization Roles
Your sales philosophy and methodology directly impact how you structure your sales organization. There are endless options, but sales organizations are primarily organized (at the top) by product line, geography, customer type, or internal sales process. Matrix sales organizations are messy—we don’t recommend them. You may find that certain geographies, industry sectors, or product lines require a slightly different sales qualification process. The underlying differences will drive how you organize sales teams.
It’s most important to clearly define sales organization roles in terms of the sales process. For example, what triggers handoffs from inside to outside sales teams? What is marketing’s role in lead qualification? When does a sales opportunity require sales VP engagement? Who approves discounts or price increases? Sending a sales rep with a clearly defined role to engage prospects will keep them focused on the right opportunities. Once roles are defined, the right sales methodology can be applied to allow the sales teams to succeed.
Most successful sales organizations merge the best of a few methodologies since one size rarely fits all. Consolidating steps in a methodology will often give a sales team more flexibility in the sales process. At the same time, fewer steps require less administrative time, which allows the sales team to focus on what it does best. Lastly, don’t forget about talent. Getting the right talent and matching them to the sales methodology is the linchpin for success.
You Never Bring Me Donuts Anymore: Changing the Sales Model in Oilfield Services
by Peter Purcell
How do oilfield services (OFS) companies change the habits of a stagnant sales force that follows the timeworn model of delivering donuts and running up big expense tabs as their primary sales technique? It may be easier than the pundits would believe. The sales force should think less about selling individual products and transaction services and more about how to work with their customers to design and support critical exploration and production projects.
Several years ago, I had the privilege of meeting with a seasoned OFS executive from Baton Rouge who had successfully started, grown, and sold three services companies over a 40-year period. The conversation quickly focused on what he did to beat the competition in the oil patch. “In the early days, it was easy,” he said. His sales teams found out which bars company men frequented after a hard day at the rig. They would run up a large bar tab, buying round after round for their thirsty companions. By the end of the night, sales team members were best friends with the company men and left with a contract for services (aka a hand shake).
I asked the executive how he felt things have changed over the years. He lamented that centralized purchasing and the use of supplier analysis for selecting services has trumped watering hole relationships. As a result, the old ways of selling OFS no longer apply. His sales force needs to spend less time on the golf course and more time understanding prospects’ procurement processes and determining creative ways to win work. If he were starting a company today, he would have his sales force do things differently. He would have his sales force prioritize customers, provide a little lagniappe along with the sale, and understand their real problems a little better.
He reiterated that service companies who cannot figure out how to partner with customers will never be market leaders and grow.
Since then, we have watched numerous OFS companies over the years successfully adapt to their customers and partner with them to solve their most difficult challenges. These service companies followed my old friend’s suggestions of prioritizing customers, differentiating services (lagniappe), and earning the right to partner with their customers.
First, focusing on the right customers is all about setting the right strategy. There is a general feeling that all good OFS sales people are self-motivated, aggressive, freelance mavericks who chase and close every opportunity. Any imposition of structure around the sales process will result in a mass exodus of these valuable and irreplaceable individuals. Most OFS companies would consider the scenario of losing key sales people frightening and paralyzing. The fears may be unfounded.
One of our clients was losing market share and could not understand why. They had a very aggressive sales force that delivered a lot of donuts and seemed to close a lot of deals. However, margins were not meeting forecast, cash collection was low and major customers were moving to the competition. We performed a quick analysis and determined that the sales people were pursuing small companies that were eager to sign contracts for services. Larger prospects were ignored. Meanwhile, the competition had stopped doing business with these smaller companies because they were cash-strapped and not paying bills. Larger prospects required hard work to close the business.
We worked with the SVP of Marketing and Sales to develop an account management strategy for the company. The team visited with the top customers to understand why our client was losing business. We quickly found that the sales force was focused on selling to project managers and not spending time with people managing the sourcing selection process.
The sourcing programs were doing business with OFS companies that:
- bundled services across geographies and service offerings
- scored well within the customer evaluation process
- had sales teams who were willing provide the focus and resources to determine how to leverage new technologies and services to solve critical problems
Our client quickly created ten account teams that consisted of sales people, engineers, and operations personnel. These teams were assigned to the top ten customers and given a clear mandate. The sales people would spend their days at assigned accounts and not call on anyone else. The sales people would work hard to understand the procurement process and be ready to respond quickly to requests for services. The team would work together to identify cost effective solutions for customers. Senior management was nervous because the account focus was a different model and there was concern the sales people would leave because they were no longer involved in maverick sales activities. The selected sales reps were now responsible for a more thorough approach as part of a team.
Within six months, it became clear that the account team approach was working. Sales within the top ten customer base rose more than the decline in the transaction sales loss. Margins on services were high and post-project audits revealed excellent customer satisfaction. Over the next year, billing disputes and contract leakage dropped dramatically. Our client decided to revisit the rest of the customer base to determine which should be treated with the same level of focus and which should be treated as transactions. Although there was some voluntary turnover, our client found this to be a blessing in disguise.
Differentiate Services (Lagniappe)
Providing a little more service with the sale can make the products OFS companies offer less of a commodity. Drilling mud is drilling mud, right? Not always. Mud mixes change based on the porosity, salinity, bottom-hole pressure, and a variety of other formation characteristics. Branded additives are often included in the mud mix to address drilling lubrication needs. However, these branded additives are not what drives the customer’s decision—price and availability usually do.
A drilling fluids company developed a laptop-based application to help their mud engineers more quickly determine the appropriate mud mix. The application was integrated with the order entry system to ensure availability of the appropriate components when a mix was approved by their customer. Substitutions would be suggested when certain components were out of stock. Used correctly, the system would help prevent rig downtime if the mud components were missing or the mix was wrong.
The drilling fluids deployed the system along with new laptops to all mud engineers. During the deployment process, a number of customers heard about the system and their company men requested the software and training. The initial group of trained customer company men used the software to double check the competition’s mud mixes. When errors were found, the company men told their peers and recommended using the application to other customers. The drilling fluids company’s customers started sole-sourcing to them. We asked the company men why.
The answer was simple. There is a high level of value in the tool, which translates to a high level of confidence in our client’s ability to deliver. Heavy discounting is no longer necessary and margins are well above prior years’ margins. In the future, there are plans to allow the company man to order mud directly through the application.
The drilling fluids company would not have achieved the sole-source status by pursuing a traditional sales strategy. Other OFS companies can use a comparable differentiation approach to get similar benefits.
Finally, fully understanding the customer’s real problems can only be achieved by partnering with them. Most of our OFS clients never question the content of the requests for proposal (RFP). At times, cost is the primary focus and responses are developed without questioning critical technical components.
A cost-focus approach can lead to a variety of challenges at the drill site if well construction design is not adequate or specified equipment was undersized. Improper scoping inevitably adds unnecessary costs and may create other safety and environmental issues. In some cases, RFPs are drafted by new engineers and procurement personnel who have never been in the field. The more seasoned personnel with field experience reviewing the RFPs are often overworked and may miss critical items.
We were engaged by a mid-sized drilling company to review their bid-to-bill process because they had recently lost several significant opportunities. Their equipment was relatively new and their day rates were reasonably competitive. We analyzed the RFP responses and interviewed project managers and engineers from the prospects. The responses were eye opening. The competition had reviewed the RFPs and had suggested ideas for the well construction design and other equipment. This was provided in addition to the RFP response. Our client typically provided a few recommended changes to the project, but not at the level provided by the competition.
We led a series of workshops with a number of account teams to identify ways to combat the competition. The teams suggested assigning engineers to each project, from RFP response through well completion. The engineers took ownership for the entire project and were available for the customer during the sales, deployment, and drilling processes. There was initial pushback from customer prospects but now the engineers are welcomed as partners in the process.
Two years later, these engineers are in high demand by repeat customers. Marketing and sales costs have dropped and margins are increasing. These engineers are considered as partners by customers and are often invited to review well construction designs before RFPs are issued.
Selling services to oil and gas companies is no longer a simple task, and the methods of the past are no longer effective. Success in the market is based on the ability to understand who should be customers, providing more service with the sale, and becoming a partner.
4 Keys to Automating the S&OP Processes
by Julie Baird
A manufacturing company’s ability to compete often hinges on meeting customers’ delivery expectations. Customers want a product when they want it, and delivery failures result in customer attrition. With the introduction of platforms connecting producers to consumers, moving from one supplier to another can happen overnight. Unfortunately, customer product demands are difficult to predict. Customer unpredictability requires manufacturing companies to closely manage the balancing act between material requirements, production capacity, and inventory levels.
To address the predictability challenges, manufacturing companies must have a robust integrated business planning process aligning sales, operations, and finance. In many organizations, the Sales and Operations Planning (S&OP) process is disjointed and cobbled together with various spreadsheets and emails. Companies can leverage technology to innovate and streamline the S&OP process. An S&OP platform can automate processes across sales forecasts, demand planning, materials planning, network optimization, and financial planning.
Keep in mind, processes must first be standardized and organizations aligned before investing in a technology solution in order to realize any real benefits. Before starting an implementation, consider the following:
Know where you stand today. Business functions operate in silos and have unique processes, systems, success metrics, and terminologies. Understanding the current state and identifying pain points within the process is key. For example, the sales organization speaks in “dollars” and the plants speak in “units.” This means the pricing process must be well-defined to interpret what sales is saying versus what the plant must produce. Assess current processes across the supply chain, then determine actionable steps for improvement. Automating an ineffective process will not yield greater effectiveness. Be realistic about the current state and develop a plan to implement the desired future state.
Roles within the organization will change. To effectively implement and utilize a S&OP tool, everyone involved in the S&OP process should understand their individual role and accountability. Undefined roles and responsibilities lead to duplication of effort and multiple versions of the truth. The plant receiving one forecast from sales and yet another version from the demand planners will experience confusion and second guessing. Developing a RACI (Responsible, Accountable, Consulted, Informed) model for each step in the S&OP process is a great tool to align roles. Clarifying how each individual contributes to the S&OP process and fostering collaboration across teams is essential to success.
Data is everywhere. Identify authoritative data sources and clearly define data inputs, calculations, and outputs. Most companies with a manual S&OP process have data stored in multiple systems, spreadsheets, servers, and hard drives. With data coming from multiple sources, companies spend the majority of the time validating the data, leaving little time for analysis. Demand Planners plan production at a product SKU level, and finance forecasts production at a product line level. The two versions are rarely reconciled or shared between operations and finance. This creates a tedious and time consuming task, leaving little time for analysis. Before implementing an S&OP tool, the team should design a data model that aligns the company’s sales, financial, supply, and operations planning process and requirements.
Build consensus among key stakeholders. It is difficult to argue the benefits for implementing a platform for S&OP process automation. Sales, finance, operations, supply, pricing, marketing, and product management teams must be aligned, given the cross-functional nature of S&OP. Establishing who will be accountable for the S&OP implementation isn’t always easy. Organizations need top management from commercial, finance, and operations commitment to be aligned. This includes aligning project objectives. A good exercise to start the S&OP implementation, includes developing S&OP guiding principles. The guiding principles set the tone for the implementation and give all functions a clear understanding of the path forward. Any disagreements will be resolved by the guiding principles for the project. With executive leadership and buy-in from key stakeholders and the rest of the team in place, the S&OP process can succeed.
While technology can automate and simplify the S&OP process, the processes, data, organization roles, and expectations must be aligned across the business.
3 Reasons Why Brand Cohesion Matters After an Acquisition
by Connor Mason
Amidst all the madness of an acquisition, there’s one thing that can be easily overlooked and mishandled: branding. What should be done with the newly absorbed company’s brand? It is frequently assumed that the acquired company should keep its original branding, but this is typically not the best option. The most efficient way to handle newly obtained logos, product names, and entity branding? A carefully considered remodel to become more consistent with the parent company’s existing identity.
Brand cohesion doesn’t necessarily have to be a replica of the parent brand. Rather, cohesion entails making sure newly acquired companies echo similar messages, operate in a similar wheelhouse, and have some aesthetic connections.
Prioritizing brand cohesion post-acquisition yields several important benefits:
1. Streamlined marketing across the company
The most effective way to streamline marketing across a large company is to utilize a branded house strategy. This means the flagship firm is the brand for all sub-brands, products, and subsidiaries. This builds a strong, recognizable, and unified identity. Apple, Google, and General Electric (GE) all use this approach.
Many people are unaware that GE is not a singular company but an accumulation of companies such as GE Aviation, GE Healthcare, and GE Capital. GE has created an identity so strongly integrated that nearly a dozen businesses are viewed as one. All businesses share the same basic logo, color scheme, and messaging. As a result, they can all be encoded with the same marketing messages. This ability to streamline marketing cuts costs by reducing redundancies. What would have otherwise been several advertisements or marketing campaigns can now be condensed into one. This simplified process leaves more time, energy, and money for the marketing message.
Hosting a mix of different brand identities under a corporate umbrella ensures there will always be a certain degree of internal incompatibility. Cohesion opens the door for an enduring and profitable brand due to streamlined marketing efforts.
2. Improved cross-selling
A key way to expand revenue streams is through cross-selling, or marketing additional products to existing buyers. Clients who are pleased with a particular company’s products may not try out others if it’s unclear that the new products are associated with the original company. Positive feelings toward the parent brand are trivialized if the new products have a separate identity and set of values.
A purchaser who buys machinery marketed as top of the line is unlikely to get corresponding maintenance supplies from a subsidiary advertised as cost-effective. High quality and cost-effective can often be conflicting attributes and may confuse prospects. This second set of values may even leave the purchaser questioning the validity of the initial “high-quality” claim.
Many organizations utilize a single salesperson to represent products from multiple umbrella companies. The more united related companies seem, the easier prospective buyers can back products of newly acquired enterprises. By aligning branding, companies can strengthen claims and illustrate that all products and services are complementary and well thought out.
A FedEx salesperson likely has minimal trouble convincing a previous client with good relations to try FedEx Freight or FedEx Express in addition to the standard service. All FedEx products operate under the same branded house. Homogenous branding makes it easier for prospective buyers to draw connections between companies in the branded house. Simply put, it’s an easier sell due to the familiarity and security brought on by the FedEx name alone.
3. Elimination of cultural barriers
One of the most difficult parts of an acquisition relates to the most important asset to every company: the people. Blending cultures and processes can be a difficult task. After an acquisition, culture change can be expedited through brand cohesion to break down cultural barriers.
The financial benefits of brand cohesion are joined by the symbolic gesture of turning a “you and I” into an “us.” Letting an acquired company keep a separate identity may at first seem a kind nod to its background, but it can become an unintentional source of division and inefficiency. Brand alignment provides employees an opportunity to rally around a common set of values, goals, and culture. This cultural integration lets new employees truly feel a part of the larger firm and aids in adopting the parent company’s messaging. This is positively contagious and infiltrates how the new acquisition does everything else from the ground up.
A brand is more than just a clever logo or an assortment of catchy slogans. A good brand is an identity, a selling point, and a message. Brand cohesion after an acquisition leverages these strengths for the advancement of the newly united company.
Connect with Trenegy for more non-traditional insights.