Commercial & Industrial Case Study

Reviving Revenue by Transforming Truck Rental Go-to-Market Strategies

Introduction

Post-pandemic Revenue Slump

A truck rental client enjoyed a high-growth, high-demand environment during the pandemic era. However, as the market normalized, the company experienced a significant decline in demand and growth. As a result, core sellers practiced opportunistic selling behaviors instead of proactive selling motions, limiting the division’s results.

Though the client increased in rental revenue in the last two years, their goal was to increase by another billion dollars in the next five years. However, as of 2023, they are projected to reach below their historical earnings and expected growth targets.

They reached out to the Alexander Group because we had previously completed successful projects with the client’s leasing division, earning a positive reputation with their leadership. Alexander Group was asked to participate in the truck rental division because of our deep experience in sales design and compensation programs.

Approach

Create a Prioritized Roadmap and Disrupt the Rental Market

Alexander Group’s first goal was to ensure that the commercial rental division’s current go-to-market (GTM) strategy aligned with future growth objectives. After assessing the current state, we designed a prioritized roadmap, accentuating the client’s strengths and narrowing performance gaps. Additionally, Alexander Group identified a way for our client to disrupt the rental market by designing a subscription-based offering (Rental-as-a-Service) that would reduce future churn and create predictable revenue streams.

Key Findings

Engage the Right Customers

This project revealed two key insights:

Prospecting vs. engaged selling time.

Alexander Group’s Sales Time Survey revealed that rental sales reps spent three times (3X) the industry benchmark on prospecting activities but only achieved 80% of the benchmark on engaged selling time. Despite the additional prospecting time, sellers did not generate any incremental revenue. On average, sellers who spent more time on engaged selling (at or above the industry benchmark) generated more revenue per seller than those below the engaged selling time benchmark.

Focus on the right customer.

Customer calls and meeting data revealed that sellers spent approximately 90% of their time with low- and medium-tier prospects and only 10% with top-tier prospects. However, high-tier prospects generated 12 times as much revenue as low- and medium-tier prospects revealing the misaligned time to revenue ratio.

Recommendations & Outcomes

Realign Seller Behavior Across All Workstreams

Alexander Group recommended deploying four seller motions to align seller behavior with growth targets.

Focus sellers on the right accounts

Align top resources to top accounts

Balance account loads

Redesign sales compensation and quotas

We recommended that the client deploy these growth plays across nine workstreams to maximize their revenue opportunity:

Opportunity, segmentation and account prioritization models
Coverage, job design and rules of engagement
Organizational structure
Sizing and slotting
Territory realignment
Compensation, cost modeling and quota setting
Sales governance models
Rental-as-a-Services (RaaS) offering
Sales tools, training and talent

As a result of this tailored approach, Alexander Group estimated the client would achieve several hundred million in revenue and over $55M in net operating results by Year 3. These revenue projections represent 7.5% revenue growth and 7.4% growth in operating results above current projections.

By deploying growth plays across these nine workstreams, this truck rental company can expect increased customer retention, share-of-wallet growth within existing accounts, capture of net new accounts, and maximized fleet utilization.

Engaging an Expert

Need new sales compensation plans?

In a market of change, sales compensation of the past doesn’t escape unscathed. Experts at the Alexander Group look to top organizations within their industry to see how they are maintaining a motivated salesforce in today’s market.

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.