In the Nov/Dec 2013 edition of the Journal of Corporate Renewal (JCR), the editor sought to cover some of the “Hot Topics in Turnarounds and Corporate Renewal”. Of course, the over-arching “Hot” issue discussed was the weakness in the TM industry. However, rather than just dwell on the negative, the articles in the magazine sought to point out ways that turnaround firms could still grow despite the weak conditions.
Missed however, within at least 3 of the articles was a central growth opportunity this blog has been discussing for some time – the opportunity for TM firms to generate revenue and client value through the deployment of specialized sales and marketing advisory.
The first of the three articles was titled “Firing Customers Can Boost [the] Bottom Line”. The article deftly covered the analyses and some considerations for firing customers and concluded that “Determining which customers to rationalize [required] detailed analysis…..coordination between IT….and a dynamic model to test customer rationalization strategies.”
What the article inexplicably forgot to mention was the need to work with sales management to understand the implications of customer firings on the industry, competitors, the marketplace and on the moral and longevity of the sales force. What the article also missed was the need to understand the nuanced marketing and sales issues of the revenue loss and how and if the revenue of some of these customers could be made more profitable before the customers were fired.
Understanding these nuanced sales and marketing issues is something that a trained TM professional in sales and marketing should be leading for a firm in conjunction with the client.
In the second article, two authors make a persuasive case for how TM professionals should try and expand their revenues by working in non-distressed situations; specifically by helping PE firms and other companies to effectively “carve out” subsidiaries for sale. The article demonstrates many ways that TM firms can and should add value for the divesting company yet, it misses how much value effective sales and marketing advisory can add to the process for the divesting Company. That value generation, potentially in the millions of dollars in additional sales revenue, was showcased in a recent case study on this blog http://michaelrothadvisors.com/turnaround-case-study-363-sale-went-better-expected/ .
The third related article spoke of the many ways that TM firms should be working with lenders to do due diligence. Unfortunately, consistent with the other articles in this issue, while a strong case was made for TM firm involvement, no mention was made of how much more revenue and value could be generated if TM firms brought sales and marketing advisory to the engagement. In the case of sales and marketing due diligence, lenders could be made more confident in the quality of the borrowers sales, any potential risks in the sales forecast and in the quality of the day-one marketing and sales action plans post transaction.
Most TM professionals know how weak the industry is and how much longer that weakness will last. The Nov/Dec 2013 issue of JCR meant to communicate that there were nevertheless many potential ways for TM firms to grow their businesses. While the articles did a good job at mentioning some of the growth opportunities, they universally missed the growth opportunities related to sales and marketing advisory for TM firms. I hope this blog post rectified that and that you will reach out to us for more information.