The first component of the commercial playbook is organic revenue growth because the commercial playbook focuses on revenue. The next two components—customers and marketing and sales—go into more depth. Costs get picked up in the operational playbook, and inorganic growth through further mergers and acquisitions (M&A) gets picked up in the financial playbook.

Growing organic revenue requires marketing and sales efforts. Let's use Philip Kotler's definition of marketing: “the science and art of exploring, creating, and delivering value to satisfy the needs of a target market at a profit.”¹ Sales then converts that value into transactions.

Every sales funnel that ever was is a variation of awareness–interest–desire–action.

Awareness

• ⇨ Interest
  • ⇨ Desire
    • ⇨ Action

The pivot is desire. If you don't have a product or service that others are going to value, nothing else matters.

Generally, marketing owns the top of the funnel, generating awareness, and fueling interest. Again, generally, sales turns that desire into action. With that in mind, growing the top-line has to involve new customers or current customers buying more or paying more.

Mergers enable this with cross-selling, new ways, new products, new geographies, end markets and new technologies.

Cross-selling is the art and science of getting the customers of one of the formerly separate entities to buy the products or services of the other entity or entities either in existing or new markets (geographies or end markets).

Awareness: Making them aware of the other products or services

• ⇨ Interest: Making it easier for them to learn about or access the other products or services
  • ⇨ Desire: Focusing on the products or services that best meet unmet needs
    • ⇨ Action: Sales shepherding conversion, perhaps with bundled sales

Getting existing customers to use current products or services in new ways is the art and science of moving those new ways through the funnel.

Awareness: Making them aware of the other uses

• ⇨ Interest: Helping them understand and enabling the new uses
  • ⇨ Desire: Focusing on the new uses that meet unmet needs
    • ⇨ Action: Sales shepherding conversion, leading with information

New products in this case means the new products or services enabled by the merger or acquisition. These could come from:

• New innovation, technologies, and design capabilities enabling the invention of products and services that the separate entities could not have invented themselves
• New production capabilities enabling the actual production of new products and services that could not have been produced before
• New distribution capabilities enabling the distribution of new products and services that could not have been distributed before
• New service capabilities enabling the service of new products and services that could not have been serviced before

The common thread is the elimination of constraints.

Each approach will require its own go-to-market and end customer market pursuit strategies driving trial, repeat, continuity, or stocking as appropriate.

Marketing, Communications, and Customer Interface

Some basics almost always apply around mission, marketing objectives, and overarching marketing approach:

• Discuss the current mission and go-forward strategy.
• Agree on internal and external communication preferences and strategy.
• Enhance website for use as both a marketing tool and current customer tool.
• Assess and build out digital marketing presence.
• Consider establishing marketing point people based on the organization's core focus:
  • Someone to obtain, assess, and channel consumer and customer insights in a design-focused organization
  • A business-to-business marketing expert in a production-focused organization
  • A partnership or alliance lead in a distribution-focused organization
  • A marketing experience lead in a service-focused organization

Sales Model and Organization

Similarly, the sales organization will be different in different organizations, targeting primarily new users (design,) other businesses (production), a broad ecosystem (delivery), or customer experience (service). In almost all cases, you'll need to:

• Build out customer relationship management (CRM) focused on pipeline, forecast, customer profitability, and estimates.
• Assess existing sales models and determine if a strategy focused on specific industry verticals or a regional or geographically focused model would be more appropriate.
• Determine the go-forward customer growth strategy and balance of focus between new customer pursuits and upselling existing customers.
• Determine incremental sales resources required to pursue new customers, expand point of sale and point of purchase service offering, and execute the go-to-market strategy.
• Assess current sales commission and incentive plan and align with sales targets, organizational strategy, and industry standards.

On this last, understand that sales people are different animals from others in the organization. In general, long-term incentives help align leadership and owners around value-creation goals. Sales people work line of sight. The more you can make their incentive plan look like a commission on sales they make, the better. This will be discussed more in the later playbooks since incentives are critical to the success of the merger or private equity (PE) deal.

Customer Profitability

Dissect customer profitability with a profitability cube. Then link to renewals and develop a tracking and reporting system:

• Prepare a customer profitability cube that quantifies historical contribution margin by customer, product, and end market. Establish the customer profitability cube as a new embedded process within the company to help make marketing and pricing decisions, translating this into the most motivating terms you can for sales people.
• Link current customer profitability realization to impending customer renewals to ensure pricing is appropriate.
• Develop a long-term solution for tracking and reporting customer profitability and accurate job costing with a link back to the pricing and estimating process.
• Develop a cash flow view for each customer, end market, and geography as many costs and investments are not covered in the profit and loss (P&L), such as capital and working capital.

End Market Analysis and Go-to-Market Strategy

Think through markets and customer needs to focus your solutions:

• Further analyze existing customer end markets to understand projected growth rates, anticipated demand by product or service offering, market share opportunities for both existing and prospective customers, and profitability and cash flow profiles and investment required to execute future growth strategies. This helps target your marketing and sales efforts.
• Strategically identify and select new customers targets and end markets to pursue. The flip side of this is being clear which customers and markets you choose not to serve.
• Determine future offering strategy and investment required.
• Identify and implement solution for improved front-end customer-facing technology.
• Acquisitions or mergers with other companies, brands, technologies, and systems.

Here, we're referencing the impact of these on organic growth. We'll deal with the inorganic growth in Chapter 6.

• Build business development office or increase your business development capabilities to plan, develop, and implement an M&A strategy to build the capabilities you need to drive organic growth.
• Create that M&A strategic plan and then outreach to selected targets identified through lender groups or others.
• Identify investment banks and others specializing in industry for potential transactions—especially if not private equity owned.
• Build out state-of-company capabilities and verticals to analyze key areas to target M&A.
• Build out competitive positioning for the company in terms of M&A.