Value Impact from Marketing and Sales Excellence

Companies with better marketing and sales capabilities grow faster than their peers. Revenue growth at companies with more advanced marketing and sales capabilities tends to be 30 percent greater than the average company within their sector. That means in an industry growing at 4.0 percent annually, a company in the top quartile of marketing and sales capabilities typically grows by around 5.2 percent.

Sustainable competitive advantage flows to companies with the best marketing and sales capabilities. Investing to build a carefully chosen group of marketing and sales capabilities can yield a massive return—as much as five or ten times that of an investment in hard assets such as factory equipment. As outlined in Quist Insight’s Whitepaper, “Innovation, Marketing, Sales and Company Valuation”, several practices can give a company a sustainable competitive advantage:

  1. Regard marketing as a strategic partner for growth;
  2. Know your Company’s’ strengths and weaknesses;
  3. Don’t bite off more than you can chew;
  4. Sequence the development of marketing capabilities with the Company’s stage of development;
  5. Think institutional, not individual skills;
  6. Build a culture and operating model to keep it humming; and
  7. Set high impact priorities. Target the sales and marketing capabilities that matter the most.

Strong marketing and sales capabilities impact a Company’s Strategic Value and Organizational Value. Here at Quist Valuation, we look at five main drivers to business value: 1) Financial Value; 2) Strategic Value; 3) Organizational Value; 4) Customer Value; and 5) Employee Value.

Strategic Value considers industry dynamics such as barriers to entry, capital intensity, industry concentration, regulatory environment, and industry lifecycle. It takes into account an entity’s competitive position and brand recognition, and it measures an entity’s growth opportunities and how it responds to external factors. A strong marketing and sales program emphasizes a Company’s value proposition and communicates a Company’s vision and cause. With these strong messages, stronger pricing power, brand loyalty, and higher switching costs can drive revenue growth, profit margins and reduce risk.

Organizational Value considers an entity’s internal operational procedures, processes, and operating assets. It considers a Company’s ability to transfer knowledge and know-how across its employee base, and its’ ability to maintain a consistent and repeatable process throughout the organization; whether that be an operational process or a sales and marketing process.

Best Practices:

  • 1. Think institutional, not individual skills

  • 2. Build a culture and operating model to keep it humming

Businesses in early stages of development often rely on key rainmakers and rock stars to drive sales and marketing initiatives. These individuals often have their own way of doing things. In order to achieve sustainable scale, companies need to codify best practices and build capabilities over time.

Building marketing and sales capabilities alone isn’t enough. Without the right operating model to support change, even the most advanced capabilities will wither. A well-thought out and written sales and marketing plan will add to a Company’s Strategic Value and Organizational Value.


Quist Valuation

Quist Valuation was founded in 1984 and is a leading independent business valuation and securities analysis firm.


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