If you work in sales, marketing, and finance, you are in full 2021 planning mode. That includes preparing the sales and cost budget as well as defining your 2021 marketing plan. This is a busy time for everyone. This year has a special flavor though: uncertainty! It is hard to project where the health crisis is heading and how it is going to impact the 2021 business cycle.
One thing that is sure is that manufacturing companies are looking for pockets of growth and innovation to fill the sales pipelines and to match the promises included in the long-range plan.
Since over 90% of companies are busy conducting digital transformations, they are for sure considering launching new business and revenue models in the form of subscriptions or usage-based offers. This is inevitable. Hundreds of industrial companies have done so and the urgency for revenue model diversification forces many more to prepare and launch innovative solutions.
But designing these offers is one thing. Planning and budgeting for them is another. If you have never launched such an offer and are including one in your 2021 marketing plan, how do you budget for it?
Everyone should be aware of — and onboard with — your recurring revenue innovation plans. That includes sales, marketing, finance, IT, legal, and accounting.
Part of the process will be to have your total addressable market (TAM) calculated and have your sales plan contextualized for 2021 within the TAM.
If you are working with trade channels today, then your sales plan needs to account for them.
Schedule meetings with your development, engineering, and finance teams to go through all costs. You must get this done to enter the innovation into your ERP.
The next tough discussion to have is with IT and finance to make sure your ERP system is ready to sell, invoice, and collect on your new offering.
The billing and collecting side of a recurring business is a serious matter for discussion. Not invoicing is not an option. My recommendation is to delay the launch in 2021 if necessary to make sure you can invoice from day one.
Prepare a sales playbook with value proposition, marketing brochures, value and customer case studies, data sheets, price lists, etc.
Finally, allocate some budget in 2021 for salesforce special incentives, awards, and promotions. Remember that your goal is to show success in your first year and to bring the “late majority” on board the digital and recurring business journey.
2020 is almost over and you have probably already spent a fair amount of time on your 2021 budget. But it’s not too late to take specific steps to make sure your 2021 digital and recurring business innovation is properly planned and budgeted for. For that, it is essential to have all the parties on board, to have your systems in place, and to have your decisions properly supported by funds and resources in 2021.