Blind spot for business leaders risks 40 per cent revenue loss
6 min read
02 November 2016
In the time I’ve been with LinkedIn, I’ve come to realise that there’s a significant risk of revenue loss from a blind spot that all business leaders appear to possess.
Since joining LinkedIn back in July this year, I’ve had the opportunity to meet a large number of our clients – ranging from multinationals employing thousands of customer-facing staff to SMEs using social media to effectively grow business. Yet, they’re all at risk of revenue loss.
Throughout all these conversations one worrying theme has emerged; it turns out that most business leaders vastly overestimate how well connected their teams are with their client organisations. Not just by a little, but by a lot.
At LinkedIn we have access to unique data on the relationships between professionals and organisations. One of the areas we’re increasingly supporting clients in is helping them identify the most relevant companies for them to do business with, and map out the appropriate decision makers within those organisations.
It turns out business leaders have an incredibly optimistic view of the world, and their teams are far less connected than they think. This perception gap should worry CEOs and sales leaders.
How well connected you are with your clients will have a direct impact on your ability to hit your targets, which may result in revenue loss. This is particularly important in a small, growing business.
More complexity, more churn
A frequently-cited stat from the CEB is that there is an average of 6.8 people involved in today’s B2B purchase decisions. Driven by a decentralisation of organisational structures, these people are likely to be distributed across different divisions, functional areas and even geographies.
They will have different agendas, motivations, and preconceptions. Failing to build strong ties to one of these people could see important deals collapse, meaning revenue loss.
What’s more, it’s now well understood that the job for life has gone. Our data shows that the typical CMO or CTO is likely to be in their role for 29 months, and one in five decision-makers is likely to leave their position every 12 months.
Companies who might have once relied on the relationship between their salesperson and their client have quickly found that strategy is no longer viable. If your main contact is one of those on their way out of the door, you could find yourself rapidly writing down your next forecast amidst risk of revenue loss.
And that’s just the churn on the client side.
Even considering the fact that smaller businesses are considered attractive places to work, sales professionals are more likely to change jobs compared to the average professional, with one in four likely to move onto new pastures within a year. For a small company, with a small or even one-person sales team, this could mean that your full sales function could change over the course of 12 months.
Added together, these factors could be risking a revenue loss of up to 40 per cent for a company. With more churn than ever among sales and client teams, it’s time for SMEs to adopt a new way of thinking about their client relationships.
Despite the name, multi-threading has nothing to do with needlework. Instead, it’s a simple principle based on establishing multiple touch points between your organisation and that of your client.
So how can sales professionals go from point-to-point to more matrixed relationships?
The cause that I’m most passionate about in my role at LinkedIn is the modernisation of selling. At its heart is using social media to take the heavy-lifting out of managing complex relationships to increase productivity, whichever social platform your clients happen to be engaged in professionally.
Social media is the best way to quickly and easily see clues that provide opportunities to engage and foster relationships, from a profile update indicating a promotion, to someone sharing an industry news story that you have a useful perspective on.
It also makes it far easier to spot mutual connections and leverage your network for relevant introductions. For smaller businesses it is a cost-effective, resource-lite approach to boosting sales.
Offensive, not defensive
Multithreaded relationships built on social media aren’t just a way to defend against risk of revenue loss. They can also be a hugely powerful tool for business growth: every time a contact moves to a new role within a new company, you gain a potential new client.
For a company with 50 clients and five key relationships within each of those organisations, this could result in up to another 50 new prospect targets each year, just by mapping and establishing the right relationships.
I’m not advocating that business leaders become any less optimistic – the world has never been more in need of optimism – but I do encourage you to think about what would happen if your most successful salesperson left your organisation, or your most vocal sponsor at your biggest client moved roles.
If either – or both – of these prospects fills you with unease, then it’s time to get serious about multi-threading.
Liam Halpin is senior director of LinkedIn Sales Solutions EMEA