Technology Case Study

Annual Planning Enhances Strategic Focus for Sales Growth


Focusing on the Road Ahead

Cloud-based cybersecurity firms must react instantly to potential threats — or lose their revenue and reputation. But these same companies must also address an internal threat: the lack of execution due to insufficient planning.

A detailed annual plan creates a roadmap for the coming year, aligning sales and support resources with company goals. Staying focused on revenue growth and achieving strategic targets will be easier with a robust plan that is informed by data, rigorously tested and calibrated to the operational capabilities of the organization.

Our technology client, a firm specializing in threat detection and response solutions for enterprise-level businesses, required detection of sales inefficiencies that drained sales productivity and performance. They called on Alexander Group because of our technology sector credibility, reputation with investors and relevant work with industry peers.

This client faced a variety of challenges. First, their legacy segmentation criteria were deemed too complex and subjective. Poor governance allowed for the trading of accounts between segments creating mismatches between seller capability and account opportunity. Lenient breakpoints between their Enterprise and SMB segments also created unreasonably high account loads per rep.

Second, the company experienced high cost of sales due to a heavy overlay model, with some functions contributing to substandard performance. Unclear rules of engagement exacerbated the problem and resulted in inefficient expansion and renewal motions.

The company also consistently missed growth targets. Insufficient account executive headcount, exacerbated by delayed hiring and ramp-up challenges, contributed to lower aggregated productivity. Finally, lean operational investments restricted the company’s ability to optimize comp plans, territory designs and quotas.

The client needed an annual plan that created a new foundation on which sales and support resources would be structured and deployed with maximum efficiency. The new model would also require revised incentive and enablement systems to improve the company’s competitive positioning for top-tier sales talent.


Clear Metrics, Benchmarking and Design

The construction of a robust, yet practical, annual plan is driven by a three-step process:

Diagnostics and Blueprint

First, we benchmarked the client’s resourcing, performance and productivity against relevant XaaS peers. This analysis also included sales compensation benchmarking, pay-for-performance and pipeline analyses, lead mix reviews, and interview insights.

Next, we assessed their go-to-market strategy, structure and management using Alexander Group’s Revenue Growth Management System. Finally, we developed initial recommendations for more efficient coverage and a greater focus on deal execution.

Detailed Design

Alexander Group co-developed a detailed, bottoms-up GTM plan across critical workstreams including segmentation, coverage, organizational design, sizing, territories, quotas and compensation design. At the request of the CEO, Alexander Group presented the FY23 GTM plan to the Board of Directors during the Annual Operating Plan meeting to ensure top-down buy-in and support.

Specific modeling included a segmentation model, headcount capacity model, bookings pro-forma model, commissions cost model, territory design in AlignMix mapping software and a quota model.


Alexander Group delivered territory and account assignments for each rep, created incentive plan documents by role, refined existing plan terms and conditions, and supported roll-out communications in preparation for the company’s Sales Kickoff.
Successful execution across all three phases required regular cross-functional collaboration between Sales, Sales Ops, Customer Success, Enablement, HR and Finance with overarching PMO oversight by Alexander Group.

Key Findings

Missing a "Productive Middle" Inhibits Growth

Without a strategic focus, it was clear that sales rep efforts created wildly fluctuating results.

For instance, our assessment revealed two prevalent gaps.

In North America, where most of the business exists, the average growth ACV per rep was $1.4M, but the median growth ACV per rep was $760k. The data showed that seemingly strong productivity was masked by uneven performance. For instance, only some sales reps achieved 90-110% of the goal. Therefore, the company lacked a “productive middle” cohort that could drive meaningful revenue.

Second, a lack of discipline around closing opportunities and poor CRM hygiene created an inflated pipeline. There were thousands of phantom accounts, and the average duration of an open opportunity was 352 days that ultimately created ~$110M of unreal pipeline.

Only some sales reps achieved 90 – 110% of the goal and the average duration of an open opportunity was 352 days.

Recommendations & Outcomes

Detailed Planning Sets the Stage for Growth

A focused annual plan required clear objectives, obtainable goals and practical solutions. Based on these planning guidelines, our project recommendations included five key improvements.

Segmentation model

Crafting an updated segmentation model focused on new, objective criteria, including customer spend, fortune rank and employee count. These criteria aimed to increase focus on enterprise accounts and reduce account loads to minimize coverage white space. This new focus would result in Tier 1, Tier 2 and Tier 3 segments with separate vertical carve-outs for Public Sector and Financial Services.

Coverage model

Redefining the coverage model to reduce direct rep involvement on transactional renewals and increase CSM involvement in expansion motions. This solution freed up time for expensive field resources to focus on complex sales motions that would underpin the management’s team growth plan.

Rep headcount alignment

Increasing the number of organic carrying reps in North America, primarily in Tier 2, while keeping overlay headcount stable. More reps translates into more customer-facing time which translates into more deals.

Account model

Creating a named account model in Tier 1, a geography-based territory model in Tier 2 and a channel-led model in Tier 3 that aligned sales investments with areas of the market with the most spend potential.

Sales compensation model

Refining sales compensation plans for each role to simplify and better align measures, weights and add-ons to leading market practices and business objectives. The plan included transitioning CSMs to an at-risk plan to ensure their incentives were aligned to other customer-facing roles.

As a result of these five recommendations, the company created an Annual Plan with strong endorsement by the Board creating momentum ahead of Sales Kickoff. The anticipated result would be an 18% average productivity increase per rep, while keeping sales costs relatively constant.

Expected benefits include:

Increased rep productivity due to lower account loads, narrowed focus, and improved enablement and management.

Higher participation rates among reps, achieving a "productive middle" with balanced territories and quotas.

More new logo deals that result in a larger share of ACV growth.

Upgraded sales talent driven by market competitive incentive plans with rich accelerators.

Transparent and effective role expectations to minimize duplicative efforts and drive more successful renewal and expansion sale motions.

Despite a softening macroeconomic climate, this technology company is well positioned for profitable growth. The need for top-line growth is balanced with cost efficiency expectations that are an increasing focus on investors and management teams. Q1 is set to exceed last year’s Q1 by a considerable margin and those results should carry into future quarters.

Planning for Success

While go-to-market planning can be an intimidating and overwhelming task, when completed in an orderly, comprehensive fashion, it’s a powerful tool to orient the organization around a set of growth, profitability and other business objectives.

For more information or for help with your go-to-market planning initiatives, contact Alexander Group’s technology practice.

About Alexander Group

Alexander Group understands your revenue growth challenges. Since 1985, we’ve served more than 3,000 companies across the globe. This experience gives us not only a highly sophisticated set of best practices to grow revenue—we also have a rich repository of unique industry data that informs all our recommendations. Aligning product, marketing, operations and finance efforts behind a successful sales organization takes insight and hard work. We help the world’s leading organizations build the right revenue vision, transform their organizations and deliver results.

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