To grow profitable revenue, I recommend that you do more of what’s working and less of what’s not. A key to achieving this state is knowing the characteristics of your ideal client. Actually, not just the characteristics, but also their demographics, psychographics, and purchasing patterns. In other words – their persona.
Strategy is not a top priority for startups, entrepreneurs, and freelancers. The leaders are hunters in unfamiliar territory. To consider a strategy in the early stages seems a bit like making a plan to survive on Jupiter. Relying on theory, science and data works until it becomes apparent that it doesn’t.
Think of a strategy is a directed plan to which you commit your time and action in a single direction. A strategy aligns how you spend your time, money, resources, and your communication. This increases your chance for success.
Aka: Revenue Strategies - the Foundation for CRO Success
In a recent confidential interview, a CEO shared his thoughts about the next 12 months: "We believe we will achieve our revenue and profit goals over the next 12 months with our current resources. We have the right team, the latest software and tools, effective processes, remarkable products & services, strong branding and a unique value proposition." He went on to admit “… but we are not achieving our revenue and profit goals and we are still unsure why.”
The proper revenue strategy aligns marketing, sales, and customer experience teams around a singular goal: drive profitability. Without a strategic roadmap, healthy and sustained growth simply cannot flourish, which is why organizations put so much emphasis on the planning process. In fact, studies reveal that tightly-aligned sales and marketing functions result in an average of 36% higher customer retention rates and 38% higher sales closing rates, than their more loosely aligned counterparts.
Unraveling such a puzzle to understand what is ‘broken’ has us first visiting the revenue strategy. Choosing a revenue strategy impacts all other aspects of planning and whether goals are achieved.
Sustainable long-term growth in any organization requires meticulous planning and execution. However, many organizations fail to plan appropriately at the inception, resulting in haphazard roadmaps, mismanagement of resources, and stymied growth.
But planning is not overlooked because management thinks it is inconsequential – it is most often subverted because it is simply difficult to do correctly.
Savvy business executives understand that sales aren’t just about selling – it is about positioning and planning to ensure long-term success. An effective sales model has always laid the framework for a go-to-market strategy across all areas of the business. However, sales models today vary substantially from their historical counterparts.
Modern businesses face more rapid change and more complex logistics than ever before, which means their sales models have to follow in stride. Traditional sales models are failing to keep pace with the number of potential buyer touchpoints that B2C and B2B businesses manage.
Today’s sales model must be strategic in nature – integrating sales, marketing, distribution, and promotional considerations.
This checklist will help you align business functions with the end goal of a strategic sales model in mind:
It appears the top 20% of your sales team are closing 80% of the deals. This reality of 80-20 performance, where approximately 20 percent of salespeople produce approximately 80 percent of sales, can be disappointing. (Though it validates Pareto’s Principle).
Pareto’s Principle was named after Vilfredo Pareto (1848-1923), an Italian economist who observed that for certain economic conditions, roughly 80% of the effects come from 20% of the causes.
Instead of accepting Pareto’s Principle as a standard, I would prefer to see your team perform with excellence. Inspiring and leading a team to break away from average can be difficult if they are following the crowd and paying attention to what ‘everyone’ follows. I learned firsthand the importance of a network, excellent habits and a mindset of high standards when I grew a business from $4 million to $16 million over the course of four years.
Today I want to share thoughts, habits, and mindsets that help many to be a top 5% sales professional and potentially break Pareto’s Principle.
Sales forecasting is not simply a necessary evil mandated by finance. The best sales leaders use revenue forecasting as a tool to manage the business, support strategic decisions, and allocate resources. Estimating sales accurately for the upcoming 12 months gives your organization foresight into where your income is really coming from and when. Sales forecasts drive decisions related to:
Even with great leadership, as your business grows you may notice the increasing tension between working “in the business” – your day-to-day operations – and working “on the business” – developing future revenue strategy, creating policies to support business performance and dealing with compliance issues.
Eventually, your company will benefit from ‘outside’ executives and/or ‘independent’ directors whose experience will help you work “on the business”. They can bring valuable experience to guide your organization through different revenue growth stages.