Media Case Study

Legacy Print-to-Digital Leader Requires New Sales Focus

Introduction

Shifting Focus to Drive Growth

A leading magazine publisher recently acquired a streaming video and video licensing company, sparking the need to align and improve seller productivity across legacy print and newly acquired digital business units. Revenue declined by 10% annually from 2017-2019, but it experienced a robust 9% growth trend from 2020-2021. The company attributed this growth to its shift in property mix from primarily print media to more digital media representation.

Although the firm was at the beginning stages of a profitable turnaround, the company was experiencing historically low seller productivity at $1.35M per rep. As they shifted from legacy print to video, the organization incurred 50% churn across all revenue segments, except for the top 10% of accounts.

To continue to accelerate overall growth and leverage the acquired company’s revenue potential required:

Developing a future state sales strategy that shifted focus from print media to digital media

Developing an integrated sales strategy for the legacy and newly acquired business that included:

Customer segmentation based on opportunity
Redefined sales roles and rules of engagement
Headcount resizing and deployment needs assessment

Designing sales compensation plans to align with the new sales strategy and motivate all sales reps

This publishing company chose the Alexander Group because of our expertise in the media industry and driving revenue growth. The client had engaged other consultancies but saw value in partnering with an industry expert that had experience transforming legacy print organizations into premier digital-first organizations.

Approach

Customer Segmentation is the Foundation of Sales Redesign

ASSESS
The project required multiple phases. In phase 1, Alexander Group assessed the current product offerings, sales strategy, customer types, sales jobs, account performance and growth expectations. In addition, we conducted a survey to determine how various sales roles allocated their time. The study also assisted in understanding how the two commercial organizations differ in their sales execution.

SEGMENT
Phase 2 focused on developing an effective account segmentation model to unlock account potential. This effort was initiated by developing an opportunity model to determine each account’s potential for print and digital spending. The top segment included accounts with current high print spending and with high digital spending potential. The remaining segments were differentiated based on the estimated total client or prospect opportunity.

ALIGN
After segmenting accounts, the Alexander Group created a coverage model by aligning jobs to the newly developed segments and the defined sales process steps. Next, we developed detailed rules of engagement for all sales jobs, including supporting roles for each step of the sales process. By defining a new account management process with specific engagement steps, the company could ensure an optimal customer experience.

DEVELOP
The Alexander Group developed new sales regions and determined the appropriate sales headcount necessary to support these geographies over the next four years, along with a corresponding organizational chart.

REFINE
Finally, refined sales compensation plans were developed to reinforce the new sales strategy and structure.

Key Findings

Focusing on the Right Accounts

Alexander Group’s analysis revealed that the client assigned sellers large account lists, averaging 142 accounts, yet only 15 accounts typically generated revenue.

Additionally, the company’s significant shift in property offering from print to digital resulted in 36% of print revenue churn. Of the print churn, only 2% of it was converted into digital spend.

These insights revealed that the firm needed to prioritize the right accounts when deploying its new digital-first commercial strategy.

Recommendations & Outcomes

Comprehensive Sales Redesign Required to Spur Growth

Alexander Group’s segmentation approach recommendations offered new opportunities for our client.

Four customer segments within the top segment reflected current print customers with significant digital opportunities.

We developed three core commercial jobs aligned to different customer segments. Each core commercial job was a hybrid role responsible for identifying new digital opportunities within their assigned accounts and maintaining existing client revenue. Additionally, a programmatic overlay specialist was developed, and a campaign account manager was created to ensure the proper execution of client campaigns.

We created three sales territories – West, Midwest and East – and assigned accounts within the regions to reps based on their industry expertise, print expertise, past relationships and the sales rep’s workload balance objectives.

The client was using a bonus flip-to-commission compensation structure that unfairly rewarded incumbents based on their quota size. Alexander Group developed full quota-based bonus structures that allowed for standardized compensation across the sales organization, removed subjective measures, transitioned hard threshold mechanics to soft thresholds and defined pay mixes for all sales roles.

Alexander Group predicts that the new structure will generate revenue growth of 19% CAGR over the next five years. In addition, we anticipate that the compensation cost of sales (CCOS) will decrease from 18.9% to 15.6%.

Finally, the client planned to implement our recommendations including:

Implementing the new sales strategy
Adjusting account assignments and deployment
Communicating the new sales strategy
Developing new, more aggressive sales quotas and goals
Driving higher productivity through more effective account targeting, informed by a quantitative opportunity model

The client was pleased with the new strategic approach that would leverage the strengths of both organizations while setting the stage for continued growth.

Engaging an Expert

Challenge brings opportunity. Alexander Group helps media clients assess current revenue challenges, offer solutions that drive revenue and align their sales investment with business objectives. Alexander Group has the media industry expertise to help your organization.

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.