Go-to-Market Planning for 2024: Laying the Groundwork for Growth
By Matt Sommi, Bespoke Partners, and Rahul Puri, SBI
The slowdown in corporate spending due to economic and geopolitical uncertainties has prompted many companies to rethink their growth strategies for the near and distant future.
When asked during a recent SBI Growth Forum hosted for sales leaders of companies with $250M in revenue or higher, those responding unanimously said that they wished they had taken action sooner relative to talent and productivity improvement initiatives.
The team at Bespoke Partners brings a unique process and data-driven insights to recruiting Go-to-Market leaders and executive teams for the software and SaaS industry.
SBI brings expertise to help companies achieve growth with superior GTM / sales processes and marketing strategies.
Given the uncertainty gripping markets and the prospect of continued market headwinds, the chief question for strategic planning is how to maximize the potential to grow when the market recovery occurs. Early indicators suggest the recovery might have started with inflation down and GDP higher than forecasted. The time to take action on talent and productivity improvement initiatives that will drive growth in 2024 is now – whether that be capital efficient growth or a more aggressive growth strategy.
GTM Leadership Trends and Insights
GTM leaders such as sales, marketing, and revenue executives naturally play a pivotal role in market expansion and customer acquisition.
Bespoke Partners places high-impact leaders in software and SaaS companies with a specialization in private equity backed companies. For our executive search initiatives, the firm analyzes data on thousands of executives at hundreds of portfolio companies to identify trends and insights for staying ahead in the talent market.
Trend 1: GTM Turnover is consistently among highest of the C-Suite
One trend is that GTM functions are the C-suite roles that are turning over the most in today’s private equity portfolio companies. For example, GTM turnover spiked at one point in mid 2023, doubling the rate of other functions.
The primary reason for the high rate of GTM turnover is the push by many firms to recruit leaders who could drive capital-efficient growth, or grow revenues without significantly increasing expenses.
A common approach in some sectors in years past was to pursue a “growth at all costs” strategy. This was based on the notion that high customer acquisition costs are acceptable because winning market share matters most when you can land recurring revenue engagements with customers. The strategy assumes that once customers are secured, subscriptions are in place, and churn is controlled, profitability will follow.
The issue with this strategy is that when market growth slows and competition intensifies, controlling customer churn becomes challenging.
The alternative is to focus the GTM operation for your company around profitable growth and recruit the GTM leaders who know how use capital more efficiently. The strategy calls for orchestrating growth that achieves higher margins earlier in the customer lifecycle, then using the additional profit to invest in more growth initiatives.
The key management objective in creating profitable growth is to identify customers for whom the value proposition of your offering is compelling enough to generate the highest margin engagements with the lowest cost of sales. You then identify and optimize the most efficient sales and marketing activities for engaging these customers. Today’s talent market is especially tight for GTM leaders who have exceptional track records in planning and executing this type of profitable growth.
Trend 2: Rise of the CRO
Another trend in the GTM function is that the Chief Revenue Officer (CRO) has become more prevalent in the C-suites of many companies.
The CRO can be generally described as leading both the sales and marketing functions, and in many cases these roles are also responsible for customer success and generation of recurring revenue. An ideal CRO candidate has the strategic outlook and analytical abilities that enable them to discover new avenues for sales and untapped markets.
By the time companies reach the 500-employee mark, the majority will have a CRO in place, approximately the same rate at which Chief Marketing Officers appear in the C-suite.
In today’s climate, many CROs are considering how to generate the most revenue from the current customer base, looking for ways to generate revenue with a lower cost of sales and achieve more profitable growth. These CROs are especially mindful of the need to maintain customer relationships after the initial sale, to look for expansion opportunities.
Another GTM leader — the Chief Customer Success Officer (CCSO) — has also become increasingly important for cultivating enduring customer relationships especially in a recurring revenue context. Read more about GTM leadership trends as well as other C-suite trends in Bespoke’s Private Equity Talent Report.
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Sales Program Planning: Forward-Looking Strategies for Growth
SBI is committed to ensuring successful GTM strategies and driving growth. After evaluating empirical and anecdotal research from the previous 18 months, SBI believes it’s time to shift from a mindset of doing “more with less” and into a mindset of reinvesting in overall company growth.
Companies spent most of 2023 evaluating cost and processes and protecting company profitability by pulling back. But there are massive commercial productivity gains to be captured through reinvesting in growth.
SBI’s most recent CEO Value Creation Pulse report found an even split between CEOs who are looking at 2024 as a year to drive growth without increasing expenses and those who are considering increasing expenses to drive growth.
As market uncertainties continue, many companies are turning to driving seller productivity and customer marketing strategies to maximize profitable growth. This strategy calls for a focus to market to existing customers in an effort to increase wallet share and generate cross-sell and up-sell revenue. In addition, it also first tries to better understand how sellers (SDR, BDR, Sales reps, CSM, Solution consultants, etc.) sell (fact based) and then tailor programs to drive productivity.
To be successful, it is important to understand the customer journey and to use customer data to understand friction areas. Are customers churning away at a certain point? Is there evidence of dissatisfaction with some aspect of the experience of consuming your offering? Are NPS scores low for a particular segment of your customer base?
Gathering such customer feedback enhances their experience, fostering loyalty and reducing churn. Such insight reveals opportunities to offer new solutions for unmet needs, deepening customer relationships. A contented customer base transcends mere satisfaction: it evolves into a powerful catalyst for business growth. Satisfied customers become enthusiastic advocates, creating a robust referral base and advocacy network. This not only bolsters your company’s reputation but also opens avenues for organic, word-of-mouth growth. This better positions the company to tap the full potential of an existing customer base and create sustainable growth.
Laying the Growth Groundwork with SBI and Bespoke Partners
While market headwinds continue to dampen growth prospects, companies are laying the groundwork in GTM talent and strategies to capitalize on the return to growth.
To effectively anticipate GTM leadership trends and set the stage for growth in 2024, we believe companies should operate proactively and prepare now. This includes identifying and investing in high-impact GTM leaders, refining customer relationship strategies, and redefining their value creation thesis for the upcoming year. By strategically addressing these aspects, businesses can position themselves to leverage the changing market conditions to their benefit and realize their growth potential.
About SBI
SBI builds multi-year value creation plans anchored to strategic bets and ongoing execution for GTM leaders to make the right decisions and get results quickly.
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About Bespoke Partners
Bespoke Partners can help companies seize emerging opportunities by staying ahead in the software and SaaS leadership market.
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Bespoke Partners Named in Top 10 of the “Top 49 Retained Executive Search” 2-Years Running by C-Suite CV Secure.
Author:
Matt Sommi
Senior Vice President
Based in Philadelphia, Matt helps lead Bespoke’s client engagement efforts across the firm’s suite of services.
Prior to joining Bespoke, Matt spent 8 years in research and business development at GLG, supporting private equity due diligence efforts and building relationships with GLG’s middle market private equity firms.
Author:
Rahul Puri
Partner – Growth & Private Equity Practice Co-Head
SBI, The Growth Advisory
Strategic leader responsible for driving initiatives from ideation to execution across all functions driving revenue at SBI Growth Advisory. Consistent performer and over achiever in driving sales, client relationship, operational and productivity improvements and building teams.