Higher investment in the sales and marketing team
To expand its market share and establish a strong foothold in the markets in which it operates, FireEye (FEYE) has invested heavily in its sales and marketing department.
In 2016, the company spent nearly 60% of its revenue on sales and marketing—one of the highest expenses incurred by a company according to the industry standard. However, its sales and marketing costs over the last five quarters seem to have stayed quite stable. During the period, its sales and marketing expenses grew at a CAGR (compound annual growth rate) of 0.5%.
In the graph above, we can see the company’s sales and marketing expense growth over the last five quarters. In the second quarter, the company’s sales and marketing expenses climbed 1.9% YoY (year-over-year) to $94 million.
Steps implemented to drive its sales force
FireEye has already laid the foundation for improvement by aggressively implementing its go-to-market strategies and targeting its addressable markets. Its management has also completely changed the mindset of its sales team by encouraging a winning attitude.
The company has also streamlined its work structure to encourage two-way communication. It’s also selected the right people for the right tasks and then trained them for the job. Finally, it has strengthened its leadership in each of its five regions to motivate its sales force.
The company is reaping the rewards of the investments it’s made in its sales and marketing team. In the fiscal second quarter, it generated an operating profit, and its bottom line broke even. Moreover, its new customer additions improved for the first time after a gap of two years, and it looks to achieve its target of adding 1,000 customers in 2018. Even telecommunications operators Vodafone (VOD) and Globe Telecom are using its security products as a second line of defense.