Situation: A small company uses a sales plan, but not a marketing plan. The CEO wants to know about marketing plans, and how they are different from sales plans. Most importantly, if a company has both, how do you coordinate sales and marketing plans?
Advice from the CEOs:
Sales and Marketing Plans are two aspects of the annual planning and revenue forecasting process. The difference between the two is focus – strategy versus implementation.
The Marketing Plan is strategic. It defines and quantifies the market that the company addresses, and also what markets the company does not address. It identifies the key attributes of the company’s market and products or services, and sets the broad direction as well as the high level objectives for the planning period – usually one year. It also covers both current products and product additions or extensions. The focus of the Marketing Plan is one-to-many.
In contrast, the Sales Plan is focuses on execution of the Marketing Plan. Ideally, the sales team takes the Marketing Plan and sets individual and team sales objectives that will meet the revenue objectives set in the Marketing Plan. The focus of the Sales Plan one-to-one – what each sales representative, and each division of the sales team (unit, district, region, country, and so forth) commits to sell during the coming year.
To coordinate the Marketing and Sales Plans, it is best to draft the Marketing Plan before asking the sales team to draft their Sales Plan. It helps the two teams to coordinate their projections for the coming year and allows the sales team to project sales based on changes to the product mix included in the Marketing Plan.
Situation: A company has a network of regional offices, operating under loose oversight from the home office. Increasingly, large customers are asking for national service agreements, but the company struggles to coordinate uniform national service delivery. How do you shift from independent regional to coordinated national operations?
Advice from the CEOs:
If you want to act like a national company, then organize like a national company. Create a national account office which will take the lead in negotiating national contracts. That office will then coordinate with the regional offices to assure that service delivery occurs according to contract.
As the national office is built, it will be important for them to understand how service delivery may vary between states because of differences in state regulations. This will require a manager who is experienced and knowledgeable in your field. This may be a promising current regional manager or an outside individual from your industry.
You will also want to define customer categories which will enable you to classify current and prospective customers as regional or national accounts. You may want to consider three customer categories, for example Regional, Emerging National and National Accounts.
The key to success will lie in your incentive and professional development structures.
If region managers receive their incentives and promotions primarily for developing regional business, then this is where they will focus.
If you want the region managers to shift their activity and priorities to creating and servicing national contracts, then bias both your incentives and professional development programs accordingly.
For region managers, continuity of business will be a top priority, as this enables them to maintain region performance. To come on-board with the new program, they must perceive a value for both themselves and their customers.
Once you have determined your structure, look for high profile wins that drive the structure. Reward and promote those who produce these wins.
These producers will become your champions for change.
The message will spread quickly across the organization.
Situation: A family-owned business received an unsolicited letter of intent to purchase the company. The Board is split on sale of the company, but has agreed to allow due diligence. Only a few key employees are aware of the LOI. What are best practices for managing a due diligence process?
Advice from the CEOs:
A due diligence process can be a major distraction. Put as short a fuse as you can on the due diligence process; insist that the information requested be limited in scope to essential materials to minimize distraction; and that the process not interfere with scheduled company commitments.
It is exceedingly difficult to hide reality from the troops. Good due diligence is incompatible with secrecy. Absent communication about the situation, if rumors develop at least a segment of employees will assume the worst leading to possible employee loss and erosion of leadership credibility.
It is better to explain the situation and put it in the best light. Here’s an example:
The company is not for sale but has received an unsolicited inquiry.
This is happening because the company is successful, is producing consistent value, and others appreciate our success.
Whatever happens, the company will continue as a going concern and if the company is sold, all efforts will be made to assure the retention and security of the employees.
Ideally, communicate this through a company-wide announcement, with video link to remote sites, and with the opportunity for employees to ask questions.
Brief all key managers in advance, with Q&A scripts to deliver a consistent message and address individual questions.
Strictly control the due diligence process.
Restrict direct contact with employees and, to the extent possible, with key customers.
Maintain your focus on the business – there is no guarantee of a sale.
Put retention packages in place for all key employees.
If the deal does not go through, assume that it will negatively impact company results for at least one quarter. Adjust your forecasts and incentive programs accordingly.
Key Words: Due Diligence, Purchase, Time Line, Distraction, Communication, Message, Coordinate, Q&A, Limit, Incentive, Retention Package