The COVID-19 pandemic and its implications on forcing remote interactions between sellers and customers have been widely discussed. As a result, most B2B companies understand what changes are needed to their coverage model, investing, for instance, in remote and inside sales capabilities. However, many of these companies struggle with how to implement an effective and sustainable coverage model to capture post-pandemic opportunities.
Leading-edge companies are embracing the opportunity to redesign their coverage models. They are moving past historical models based on current relationships and financial potential to also include the customer’s interaction preferences and propensity to purchase. As a result, go-to-market teams are seeing higher specialization, greater use of remote/low-cost channels, and higher returns on sales investment.
As Chief Revenue Officers (CROs) embark on embracing the post-pandemic coverage opportunity, we believe that the following three principles will become more critical than ever in successfully designing customer-centric, dynamic, and sustainable coverage models.
Think beyond the “size vs. growth” customer segmentation approach to incorporate buying behavior: Historically, companies have segmented customers based on their revenues and growth potential, with large, growing customers considered prime candidates for high-touch coverage. Any nuanced differences in buying preferences – based on region, industry, procurement strategy, or technology maturity – were not considered in setting outreach strategy. Companies can address these differences by investing in Voice of Customer efforts to ensure customer interaction needs are at the center of their future segmentation.
Design coverage rules principally based on forward-looking data and not historically based beliefs: Most companies’ coverage models are rooted in historical experience. For existing accounts, a past competitive threat or service problem often creates an everlasting concern of “losing the account”; for new accounts, a past lack of interest often de-prioritizes the prospect forever.
There’s no question that historical experience is an important input into go-forward coverage models, but most companies do not challenge or augment that experience with real-time, predictive analytics to see where new opportunities are emerging.
These analytics can take various forms, from building Excel-based revenue estimation models derived from current pipeline, win rates, and historical deal slippage trends to more sophisticated machine-learning models that leverage dozens of customer attributes from internal systems and external data providers. Companies should overlay these models with ‘coverage rules’ that set productivity expectations by region, business unit, product, or seller and allow organizations to dynamically adjust their coverage in line with changing customer potential.
Focus on change management to make the coverage redesign sustainable: Many companies avoid coverage transformations because of challenges with implementation. Often, sales organizations will gradually lean back to the old model – sellers want to make an exception for “key” clients, and managers tend to adapt coverage models to fit existing talent rather than seek new talent aligned with the go-forward model. Therefore, change management becomes critical to the success of such transformations, with a particular focus on the following strategies:
- Adjust coverage rules for certain client realities (e.g., strategic relations, high-severity service delivery issues), only on an exception basis
- Make hard decisions to replace sellers who don’t perform in the new coverage model
- Incorporate insights from predictive models into monthly pipeline reviews and dashboards
- Ensure that the compensation approach reinforces the revised coverage model
For instance, a global technology company undertook a holistic coverage redesign with the goal to drive 5% revenue growth and a 20% increase in dollar margins within 12 months (Figure 2). Key actions that drove these results included improved account segmentation, a predictive revenue model coupled with data-backed coverage rules, and resource investments and allocation to support closing more deals with both new logos and existing accounts.
The decision to invest further in digitally-enabled remote selling has been widely discussed and accepted - over 66% of B2B companies surveyed by AlixPartners this year1 selected remote selling and rebalancing channel mix among their top priorities for the next 12 months. But this is only a “ticket to play.” The “ticket to win” involves embracing the need to redesign individual account coverage in ways that challenge long-held truisms about priorities; and with an eye toward the talent of the future, not the past.
1 Ross Coates, Louis De Olden, Yale Kwon, and Yvette Zhang. “Accelerating Sales in a Post-Pandemic World.” AlixPartners, 2021. [https://www.alixpartners.com/media/17652/p_0333-42010956-dig-rg-survey-us-letter_v19.pdf]