Get SMART About Revenue Generation

Building SMART Revenue – Generally speaking

Intelligent revenue generation is vital to any organization, whether it needs revenue to stay in business, wants to grow, or is positioning itself for sale. This is a small sample from our Building SMART Revenue Workshops. As we review SMART revenue generation, you might find ah-ha moments about missing elements in your revenue plan.

SMART revenue defined

SMART Revenues are those that align with a company’s mission, goals and generate a profit for the company.

A business that generates SMART Revenue is one where people want to work, offering products and services that people want to buy.

For business owners & executives SMART Revenue results in increased profits and additional time to focus on their business instead of being caught up in it.

Importance of Measuring SMART revenue

Why is measuring SMART Revenue important?

SMART revenue metrics helps business owners and executives run their businesses, understand at a glance whether they are on-track, and what’s working. It also helps them reach their goals – to grow and add to the value of their business.

Non-Smart Revenue

What types of revenue generation aren’t “smart”?

Non-Smart revenue – Examples

Expecting to generate ongoing revenues from products or services outside of a company’s areas of core capability.

Making sales in a new market segment without understanding and providing for the needs of that segment.

Relying on Bluebird Sales to meet day-to-day revenue goals.

Measurements of SMART Revenue

What are good categories to measure for SMART Revenue?

Financial

Measure overall revenues with the key question of “Is there enough”?

Lines of Business

The products or services a company sells – identify opportunities and pitfalls by knowing what is popular and profitable.

Vertical Market Segments

Based on the company, segments may include: industry niches, distribution channels, and geographic areas. Know which are successful, which need attention and which to abandon.

Business Development

Includes the pipeline of sales from both existing & new clients. Companies need to be assured there are sufficient future sales to meet their needs.

SMART Revenue generation

Who is responsible for SMART Revenue generation? Where does information about a company’s SMART Revenue exist? The following table offers an example:

Group or Individual Responsible	Location of Information
Sales Team	Financial Statements, Sales Reports, Sales Funnel/Forecast
Marketing Team	Financial Statements, Sales Reports, Sales Funnel/Forecast
Customer Service Team + Receptionist	Sales Reports, Call Logs, Client Surveys
Delivery or Service Team	Sales Reports, Call Logs, Client Surveys

SMART Revenue generation – Key Characteristics

Those responsible for generation:

Are market facing

Have client interaction

Everyone within an organization is responsible for generating SMART Revenue.

CATEGORY	WHY IT’S IMPORTANT	RESPONSIBLE?	RECORDED WHERE?
Financial	Measurements to assure there are enough overall revenues.	Accounting Sales Team	Financial Statements Sales Forecast
Lines of Business	Are all of their LOB’s worth keeping? Are some better than others?	Customer Service Accounting	Call Logs Financial Statements
Vertical Market Segments	Which industries/customers should they focus on?	Accounting Sales Team	Financial Statements Sales Forecast
Business Development	Can they create future demand for their product?	Sales Team Marketing Team	Sales Pipeline/forecast Number of Leads Generated

Quantifying SMART Revenue - Critical Factors by Category

How is SMART Revenue quantified? What are the specific, critical factors within each category we want to assess? The table below offers insights about quantifying SMART revenue and critical factors to consider.

Category	Critical Factors
Financial	Overall revenues – compared to plan
Lines of Business	Number of: Returns, Complaints, Complements; Volume of sales within core business areas – all compared to plan
Vertical Market Segments	Current revenue by niche; Number of repeat clients & volume; Number of new clients & volume – all compared to plan
Business Development	Number of bids generated & won; Number of new clients; Amount of sales in funnel; Number of add-on orders – all compared to plan

Quantifying SMART Revenue – Key considerations

To be sure the information is useful, it should make a comparison between the actual performance and projected results in a business’s strategic revenue plan.
All measurements of SMART Revenue should be based on individual company goals.
Additional analysis may be necessary to determine more unique critical factors.

Below is an example of what a SMART revenue analysis might look like.

CATEGORY	CRITICAL FACTORS	IMPORTANT WHY?
Financial	Overall Revenue	Is the increased revenue a spike or a sustainable trend?
Lines of Business	Revenue from each LOB	Are there enough LOBs? Should she diversify?
Vertical Market Segments	Revenue + number of repeat & new clients in each segment	Which segments are performing? Which ones aren’t?
Business Development	Number of new contracts won; Number of new clients	Do they have enough upcoming sales to sustain the company?

SMART Revenue reporting

What are the characteristics of a SMART Revenue report?

SMART Revenue reports may contain informational notations as well and include details about economic and regional data, etc.
Information needs to be reported in the language and terminology of the business or industry.
Information measured must be tied to the company’s mission & goals.

The table below summarizes SMART revenue reporting characteristics:

CHARACTERISTICS	SPECIFICS
Timely	Report should be issued once per month
Simple	Report should contain just a few critical factors, making it easy to understand
Easy to Obtain	The majority of information already exists it just needs to be complied
Meaningful	Performance information should be compared against plan goals, show a Y-T-D summary against plan & should indicate any required action

Summary

SMART Revenues align with a company’s mission & goals AND it generates profit. It is key for the success of a business.

Good categories to measure include:

Financial

Vertical Market Segments

Lines of Business

Business Development

SMART Revenue Generation

Everyone is responsible, not just a few people on a team

There are many places to find existing information – it just needs to be compiled

Quantifying SMART Revenue

Identify goals to determine which critical factors should be measured

To ensure information is useful, it should be compared to planned projections

SMART Revenue Reporting

Reports should be timely, simple, easy to obtain and meaningful

Information compared should also include any action that is required

SMART revenue generation is key to financial health and sustainability in the larger context of overall organizational performance. This perspective combined with practical tools and processes will ensure your organization develops and sustains the revenue sources needed to deliver results and have a long-term impact.

Please reach out to me here if you are interested in a Building SMART Revenue Workshop.

Be sure to check out the free resources in our B2B Sales Growth library here.