What DOES THE COMMERCIAL RATIO DO?
The Commercial Ratio Measures Value Communication
The purpose of the Commercial Ratio is to focus on how well your commercial system is communicating value for customers by realizing both Sales and Marketing activities must be aligned and measurable to drive revenue growth.
Your commercial process is an ecosystem with many moving parts. Without an effective procedure to coordinate all of these moving parts and perspectives, you create too much noise for your audience to understand and appreciate the economic value that you can provide.
"The Commercial Ratio measures the health of the commercial system, not the performance of individuals."
Your Company Exists to Produce Value for for Your Investors
Your company is a value engine.
Your investors see your whole company as an asset. Its value is measured by its stock price.
Your CEO is responsible for building your engine and driving it in such a way that drives shareholder value.
Investors want to see how well your company converts capital into value for customers, who give you more sales.
There are three subsystems of your engine:
Strategy system - focused on value creation
Portfolio system - focused on value delivery
Commercial system - focused on value communication
Value Communications Is a Simple Process
Communicating value to customers has four (4) basic parts:
The specific people with whom you are trying to communicate the value your company provides in exchange for their money.
The combination of: value propositions, branding, experience, references, products, services, insights, and knowledge your company has that can add value to your audience.
The person (or entity) who is connecting the dots between the needs and perceptions of the audience with the various messages in your company is a messenger.
Messengers will interact with the audience over some time, hopefully building an economically valuable business relationship that results in a signed contract.
The Value Communication System Is Inefficient
Too Many Cooks in the Kitchen
The buying process within customers is increasingly complex and involves many different stakeholders.
Companies have so many different products and services and a cacophony of documents describing them that the economic value gets diluted.
Demand generation, BDRs, website agents, sales executives, overlays, sales engineers... you get the point.
THE SOLUTION: ORCHESTRATE TO ACHIEVE EFFICIENCY
What’s happened over the years as we’ve moved from an analog economy to a digital economy, the operating models and the ways that we work haven’t kept up.
The Commercial Ratio helps companies understand the commercial waste created by poorly managed organizational silos and an incessant focus on activity. It opens up a dialog to discover new strategies to fix sales and marketing (at the highest level). This includes improving the health of commercial system, and eliminating random acts of sales enablement that produce Productitis (commercial waste).
Today, executive management has only two strategies to fix sales and marketing: reorg or do more.
We are offering a new strategy to reduce the friction of a business called Orchestration. In order to orchestrate, we have to recognize that in an interconnected world, we need to have a new design point to think about all the different parts along the way.