In the last three newsletters, we’ve shown you how to help boost the value of your company simply by using the Enterprise Value Map™ (EVM). We’ve highlighted the EVM in three key areas: information technology, workforce strategy, and finance. You’ve seen it work. You’re beginning to use the EVM on your own. When confronted with a new issue, you instinctively now go through the EVM drill. It’s become second nature to you. One question: Have you used the EVM to help address issues of sales or marketing? Maybe not. After all, there’s no mystery about what you need those folks to do: increase revenues. That’s all they can do, right? Wrong. The Value of Sales and Marketing
Your sales and marketing people can help drive profitable growth, by increasing effectiveness, efficiency and enhancing the value of your assets. Sales and marketing can even help you improve expectations. But first, you have to get them on the right track. That’s where the EVM comes in. For a larger view, select the image Enterprise Value Map. 
Getting Started
You know the drill from past newsletters: work your way across the EVM from left to right, look at each box, and ask yourself: “How could sales and marketing help improve this?” The first set of boxes, for revenue, seems like a no-brainer. Hopefully, you already have your sales and marketing people trying to retain and drive growth in revenues consistent with your strategy. If your strategy depends on customer loyalty, for example, you’ve designed compensation programs to motivate your people to handle customers in such a way as to keep them coming back. But, does that strategy also help support the way you recruit, train, and evaluate your marketing and sales people? And what mechanisms, if any, do you have in place to help keep them on the lookout for promising sources of new business, possibly in new markets or from innovation? Next, look at operating margins. What could sales and marketing do to help improve them? According to a 2005 survey by the Marketing Leadership Council, only 28 percent of marketers effectively measure marketing ROI. But that doesn’t mean it can’t be done. The science of marketing continues to advance and applying analytic methods to customer, sales, and marketing data has yielded predictive insights that allow leading marketers to shape their marketing investments in alignment with objectives and ROI drivers. Beyond measuring ROI, there are several ways to improve sales and marketing efficiency, including, eliminating redundant efforts, carefully sourcing marketing suppliers, and better linking sales and marketing activities. More important, sales and marketing can help by focusing on your highest margin goods and services. What levers and mechanisms do you have in place to achieve that? Do you train them to focus on high-margin sales? Reward that focus? Align commissions and bonuses on margin and not just revenue? How about pricing based on value and putting pricing controls in place to minimize any sources of leakage from uncoordinated discounts, rebates, and/or promotions? That can be really important as improvements go straight to the bottom line. Let’s stay on the theme of coordination between marketing and sales for a moment, as it often proves elusive. A Cautionary Tale
In this hypothetical case, assume you have more laptops on hand than you can sell at full price. So the marketing department decides to post a $50 rebate on your Web site. Unfortunately, no one thinks to tell the representatives in your call center. So when customers start phoning about the promotion, they will likely wind up on hold and give up. Not only do you lose all those potential sales, but you inadvertently push them towards your competitors. Sound familiar? In our experience, don’t assume those cross functional linkages take care of themselves. You need to have the right levers in place, so that every significant development triggers an alert to each call center representative. We believe that setting up such levers and mechanisms can be the most effective way to get the biggest possible bang for your marketing buck. It’s called alignment. One Example
Just look at Apple, a company that stands for innovation and simplicity. That message comes through in everything Apple does. The clean, open design of Apple’s retail stores, for example, screams user-friendly technology, especially the interactive features like the Genius Bars and Creative Bars. Yes, those bars can help move product. They also can help engage customers, giving Apple an opportunity to learn about their needs and wants. What About Expectations?
Seeing an Apple store filled with children and young adults eagerly using iPods and iMacs reinforces the bright potential for Apple’s future, one of the keys to market value, as we learned in The Value Habit newsletter, Vol. 7: Great Expectations (If you don't give investors a reason to believe, they won't.) But that’s not all. Sales and marketing people can also help enhance expectations with careful communication of the information you need to tell your future story on Wall Street. Stepping back
The specifics will vary depending on the problem, the industry, the company and its strategy. But the principle is the same. Related Content: Order your copy of the Enterprise Value Map™. Subscribe to The Value Habit
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