Practical Tips for CEOs to Make the Most of Q4
September is the new January
Most people think of January as the time of change and the time of new beginnings, but for B2B organizations, the New Year begins much earlier. Why? Because Q3 and Q4 opportunities not only make the numbers for that year but by landing them, companies avoid having to cut cost or headcount, painful changes that would impact growth in the following year.
Many B2B companies are getting into the thick of planning for the next year in Q4 and are also still closing the current year. The dreaded fourth quarter is the time when it all has to come together so companies can deliver the results they promised to the board. This is when most firms try to pull out all stops and execute their way to success for this year and lay the groundwork for continued growth next year.
Here are three initiatives for CEOs to launch and complete in Q3 already to ensure a successful fourth quarter that helps both, this year and next:
Analyze marketing and sales pipeline
Many organizations simply use their sales automation software to track deals, and their marketing automation software to send out email blasts. Best practice, however, is to set aside time now to extract the treasure troves of data hidden in those tools. Use that data to objectively diagnose the sales and marketing processes and get meaningful insights into why opportunity pipelines are growing in some places and not growing fast enough in others.
The third quarter usually already contains the signs of things to come, and now is the time to interpret those signs. For example, the sales pipeline might not be growing fast enough or the close rates not arcing up as business model projections demand. Or it’s important to understand which marketing campaigns and events worked, which sales pitches and sales reps performed better than others, and why. Where are the segments where prospects have a higher likelihood of buying, and why?
Typically, there will be board meetings in September and in January where the above questions about this year’s performance and what’s needed to continue or recover growth next year will be discussed. Pulling together a data-driven strategy of where the company did well and where it needs to do better, and what the root causes were for both require time and keen analyses.
The strategic CEOs start now to diagnose what worked and what didn’t and develop the plans for Q4 and the new year that can be credibly presented at the next board meetings. For that, crawling through both the marketing funnels as well as the sales opportunity pipelines and extracting meaningful insights are key to having a success-prone growth strategy.
Reach out to customers
The fourth quarter often is the time for some last-minute changes in prospects’ or customers’ environments as residual budgets for the fiscal year must be spent. Especially if their current year is leaving certain tasks undone or issues need to be corrected, they are often willing to try a few different things to make their fourth-quarter a success or have their ducks in a row for hitting the ground running on January 2.
Striking those irons while hot can help close last-minute deals or launch new relationships that can be harnessed later. Active CEOs willing to pick up the phone or even travel during these last weeks of the year can help open or land those types of deals. And staying in close touch with both, the sales force but also their own newsfeeds of what’s going on in their marketplaces is crucial to have a sense of the market.
Prospective customers love that kind of attention, and especially if they’re uncertain about the viability or reliability of a new vendor, seeing that type of initiative and interest can often sway the votes in favor of a deal. And, of course, the fourth quarter is also the time of last-minute deals, and having the CEO in the room to approve price concessions or special contractual terms on the spot is a sales rep’s dream.
Roll out needed process or organizational changes
When CEOs take the time to do both, deeply analyze the data underlying their marketing and sales pipelines, as well as go into the field to meet with prospects and customers, they will get a very detailed view of what’s working and what not in their sales and marketing organizations. Nothing beats collecting your own data and impressions and hearing from the market firsthand how your company and your team stack up.
Sometimes this leads to painful realizations. From a top-down perspective, there is the need to make sure sales and marketing cost structures are matched to the incoming revenues, and if those are soft, the inevitable cuts need to occur. Unfortunately, most organizations in that situation decide to cut marketing first, and sales later under that theory that if I’m on a deserted island, I’ll cut out the food first, then water, and last the oxygen.
The problem with that approach is that it simply borrows from the future, and when the lead generation activities stop because those teams are gone, then sales might still close some opportunities in the upcoming quarter, but the following quarter is now lead starved, and in a few months those chickens will come home to roost in terms of more missed revenue targets.
Conversely, we have also seen when marketing leads started growing, but sales hiring did not keep pace. When marketing started overproducing leads relative to the sales organization’s capacity to absorb and land those deals, there was an opportunity cost of revenue that could have been generated had the staff been available to close available opportunities.
So, smart CEOs don’t do department-wide, blanket cuts, or grow sales over marketing or vice versa, producing capacity imbalances that hamper growth (the organization will only grow at the rate of the smaller of those two departments). Instead, they add or delete headcount and programs as their proven results and impact warrant it.
Knowing your market and your pipelines intimately will make decisions much clearer, and the likelihood of your team producing positive results become much higher when compared to blanket hiring or layoff decisions.
These are all tough things to do, especially when just closing the fourth quarter absorbs everyone’s full-time attention. If that’s the case, then that’s when external help can work to produce faster, unbiased insights or provide data-driven insights into where customers are buying and why and where not.
Whether external help is involved or it’s all done in-house, pulling together well-thought-out analyses of what’s working this year and what needs to improve next year requires the willingness to have honest and productive conversations between sales and marketing, so everyone can work together to get to the bottom of issues that might be plaguing your go-to-market machinery.
Both, revenue performance this and next year will benefit when that happens, and the inevitable board meetings in Q4 and Q1 will go much more smoothly.