“How do we start growth again in a worldwide COVID phenomena and economic effect? How do media companies re-energise their growth?”
Metzner and Principal Quang Do took a deep dive into how media sales organisations are resetting their market strategy to prepare for the second half of 2020 and how they’re planning to execute this shift. Alexander Group has benchmark data research with more than 10 million data points of more than 1,200 sales forces. The company’s Revenue Growth Model shows the pillars of growth that must be aligned with each other toward achieving the goals of a sales force.
Key AGI roundtable takeaways
AGI hosts roundtable sessions with sales executives and shared what they have learned with INMA mebers. The roundtables started with navigating through crisis — how to protect your sales organisation and key customers. This messaging needs to be consultative, proactive, and sensitive.
“How do we start to think about how we can add value to the advertiser communities, maybe with public service type of information? Then we move into another theme of how do you actually start thinking about growth? How do you start to engage with new customers and re-engage with old customers?”
Lastly, the roundtables looked at sales compensation, metrics, and motivation.
At the beginning of the COVID pandemic, companies were initially focused on protecting their employees and having a dialogue with advertisers to foster that relationship through the crisis.
“Then it started to shift,” Metzner said. “Let’s get proactive. Let’s get out there and talk to our buyers. Let’s tell them about the solutions that we have, and let’s innovate with them.”
Media executives were asking AGI how they could make that kind of shift happen. Metzner said there were a few areas news companies could focus on:
- Shift activities to more efficient resources to create more sales capacity.
- Use market data to redeploy sales resources.
- Package data across platforms to help advertisers optimise their spend.
- Invest more in lead-generation strategies and resources.
Don’t have your best sales people investing their time in activities of low value, but rather use them to their best purposes, he said. When it comes to advertising, although it has taken a big hit — particularly in certain sectors such as travel and entertainment — there are still areas of growth for advertisers, such as in food, in-home entertainment, and home shopping.
Make your data part of the solution, Metzner continued, and look at above-the-funnel potential advertisers for the future.
“I think when people started to realise there is actually more work to do, not less, they saw that they shouldn’t let their most expensive resources sit around.”
Highlights of AGI’s COVID-19 surveys March-May
Next, Quang Do presented findings from five flash and competition surveys AGI undertook over the last three months.
“What has been really interesting for us is that as each month and each survey has gone by is that it’s not stable,” Do said. “Things are constantly shifting.”
The No. 1 finding from a survey of about 100 executives done on Wednesday revealed 63% had little to no confidence in their sales model agility. They were not confident in their sales strategy’s ability to move swiftly, change categories, and reallocate resources.
“What was surprising to us was that most companies don’t have confidence in their ability to do that,” Do said.
AGI also asked how long the respondents thought these new customer engagement tactics would continue: 30% said they believed the new practices would last through the third quarter of 2020. “Every time we’ve asked this question, the duration continues to span out further and further,” Do said.
Though people might have initially thought this would all be more temporary, they think that less and less as the crisis evolves. Do also pointed out that while there has been a lot of talk about a “new normal,” their research has shown people are starting to think that there isn’t just one new normal that we will arrive at. Rather, they think that this is one of many phases that is constantly going to change.
“Virtually everyone we talked to is expecting a sustained level of virtual engagement,” Do said. This is important to think about on two levels, he added: engaging with your customers virtually, as well as your internal teams. This may require a re-evaluation of core sales organisation practices. It also may represent a fundamental shift in how organisations are fun in the future.
When it comes to hiring, Do said it’s no surprise the vast majority reported they have suspended new hiring plans. This number has also increased, from 12% of companies in March, to 48% in April, to 56% in May. Correlating with this is a focus on hyper-efficiency among the team.
“They’re really questioning what the future will look like,” Do said. “Do we really need to go back to the way things were?” For most, the answer seems to be no.
The next survey area was about pay: 83% of organisations expect a large decline in sales people’s incentive pay, with most saying that decline would be in the 15%-25%, or above, range.
Every company surveyed is doing something in terms of assessing compensation plans. Those range from adjusting compensation (70%) all the way down to temporarily suspending the plan (5%).
“No one is sitting still,” Do said. “Everyone is making changes, recognising that sales people being critically important to keeping things going ... but they need to be adjusting to the current situation.”
Nearly eight out of 10 media companies are providing significant variable pay guarantees, with most of these in the 70%-80% range. Do noted that a guarantee is a really short-term fix, not a long-term solution.
Sales compensation best practices
There are various sales compensation considerations for navigating the COVID disruption and preparing for the future.
Right now, companies can:
- Define and institute short-term incentive strategies.
- Review plan terms and conditions for exposure.
- Convene sales comp governance committees.
- Define motivational philosophy for the down market.
- Evaluate cash flow impact for sellers.
- Dynamically model organisational cost exposure.
For the second half of 2020, companies can:
- Review second half goals.
- Adjust measures to align with new sales priorities.
- Review job responsibility changes that warrant compensation plan revisions.
In 2021 and beyond, companies can review the entire compensation programme for alignment with new go-to-market realities:
- Industry changes.
- Buyer changes.
- Sales strategy changes.
- Management philosophy changes.
- Job responsibility changes.
“We cannot make decisions about people’s pay and livelihood in isolation,” Do said. “As things shift, how do we think about our goals? The takeaway here is you can’t just think about compensation in any one of these vectors. You have to really think about all three to have a plan that’s going to stick and work.”
Revenue growth levers for rapid recovery
Metzner took over again to discuss the phases for managing out of the crisis. Degrees of upheaval will vary, and revenue leaders must be prepared for the speed of decline and re-opening.
He identified three different stages and what companies could focus on during each:
- Dip and duration: Protect the health of employees and customers, customers may attempt to evaluate the impact, new orders and deals may pause, and existing orders be cancelled.
- Capitalise on ramp-up demand: Employees and customers return to work, customers expand capacity to recuperate downturn volume, the pent-up demand is released, and competitors accelerate their efforts.
- Recalibrate for long-term growth: Employees and customers establish post-upheaval working environments, customers normalise capacity, and the demand stabilises to pre-crisis levels.
“We’re in a decline of revenue phase, obviously,” he said of the current moment. “The question is, how long is going to go on? And how can we get back on the growth pattern?”
Some media companies are already on the upswing and preparing for the ramp-up. They moved quickly to focus on growth segments and re-allocated resources, as well as employed more innovation.
“If we get that right, we can start to transition” into long-term growth, Metzner said. “The ones that get it right will take share from the ones that don’t get it right. And what’s likely is, they will keep that market share forever. Some of the players will do quite well because they’ll have not only agility in the second phase, but agility on an ongoing basis.”
Metzner shared the best practices for rapid recovery, both now and later, in various sectors from value innovation and customer engagement/development, to data, cost optimisation, operations, and compensation.
“Advertisers are confused themselves about what they need right now,” Metzner said. “You need to innovate with them. You as a media company own this platform. You own this data. Make sure your sales folks are engaging and bringing the right experts, and innovate about how you can help those advertisers. Because they’re going through a very difficult time themselves and they need to get their message out.”
He added that these are largely trends that were already happening and the current crisis just accelerated them.
“When we say agility, we’re talking about a leadership perspective and a culture of communication of metrics. You can’t be agile if you don’t know what’s happening with your army.”
INMA: What is the No. 1 thing inhibiting sales organisations from reaching their full potential?
Metzner: In this particular context, a lot of it is transitioning from the way they did things before to a new way and being slow to change. People assume that sales people like change and taking risk because their pay is so much at risk. But it’s actually the opposite — because so much of their pay is at risk, they’re experts at avoiding risk. Otherwise they wouldn’t make as much money. Sales people might be afraid to go and try new things, but I need them to do new things because they old ones are running out of gas.
INMA: Are there any tactical examples of steps leadership can take to improve morale during the crisis?
Do: What I’ve seen is sort of a two-phased mindset. Phase one was holy smokes, let’s make sure everyone is doing activity. How do we make sure they’re actually conducting activity at home? It’s also about checking on them as friends, their overall health and mental health. How are they doing? One organisation gave everyone across the board a day off, to re-energise. Another started a weekly positivity newsletter to key advertisers that’s just good news to bring some light to the situation and also keeps them relevant. You need to have the agility to do that. People have these ideas, but how are those bubbled up to the folks making those decisions at a strategic level?
INMA: What are some lasting virtual practices you think media sales organisations will continue post COVID-19?
Metzner: Going forward, there will be much less business travel, much less face-to-face, more virtual meetings. In the virtual world, this whole topic of buyer development, everyone probably has new solutions they would like to get out there to offset the loss of revenue. How do you have those long discussion cycles when you’re introducing them to new things and getting them excited? Well, that’s a lot easier to do virtually than going out to these places. I think we’ll see a lot of Web sites become more customer development tools. And not to displace sales people, but to create buyers that they can then engage with.
Metzner offered INMA members the use of crisis response resources that Alexander Group, Inc. (AGI) offers on its Web site to help revenue and sales leaders navigate these unprecedented times.