Revenue Growth Keys

Here you will find a summary of the trends driving revenue growth, and it starts with planning.

The top three planning missteps to avoid

1. Budget is Determined by Affordability – The budget planning approach is based on historic budget and what fits within the financial plan. There is a lack of objective-based budgeting where the objectives of the corporate strategy produces the necessary strategy and cost to accomplish the revenue goals expected.

2. Misalignment of Resources – Where to target is not defined sufficiently and therefore individual contributors operate off intuition and what has worked in past roles. This ad hoc approach produces mediocre results. Territories, sales headcount, and marketing dollars are not allocated against the right markets and sub-markets to drive the greatest return.

3. Last-minute Planning – the planning that is done is largely financial budget planning with little effort to document a formal strategy and plan. Average and poor performing companies tend to put off planning in Q3, and then find themselves operating without a formal plan when time runs out. World-class companies identify their initiatives and gaps to close, and begin delegating sub-plans of action in early Q3 that form in a comprehensive implementation plan by the beginning of Q4.

Market Strategy - Understand the playing field completely. Why is this important? Growing revenues faster than the industry and your competitors is hard. Market intuition is not enough. Science needs to be applied to find hidden revenue growth opportunities. Deciding whether to add head count or get more out of the existing sales team requires a deep understanding as to where the growth is going to come from.

1. What is your revenue goal for this fiscal year?

2. How much did your revenue goal increase over the last fiscal year?

3. What is your growth rate as compared to the growth rate of your addressable market?

4. Are you planning on hitting your growth objective by adding sales head count? If so, by how much per market segment?

5. Are you planning on hitting this year’s growth objective by improving the productivity of the existing sales force? If so, by how much by market segment? • Who are your competitors in this addressable market?

6. What is the current growth rate of each competitor in this addressable market?

7. What is your market share as compared to your competitors for each market segment?

8. Will you make your revenue growth target by focusing on opening new accounts or growing revenue from your existing accounts?

9. What are the current and projected demand drivers of this addressable market?

10. What are the traditional routes to market in this addressable market?

11. Are there any innovative routes to market disrupting the addressable market today?

12. How many segments are there in this addressable market? What are they?

13. Which segments are growing faster than the market growth rate? In line with the market growth rate? And slower than the market growth rate?

14. What is your customer acquisition cost by market segment?

15. What is your customer LTV by market segment?

Accounts - Go after accounts with the highest potential. Why is this important? Not all accounts are created equal. Some will spend a little, and others will spend a lot. Some will spend this year, and others will spend next year. Some will respond well to your value proposition and others will respond well to your competitor’s value proposition. If you cannot rank accounts best to worst on revenue potential and propensity to buy, you will miss the number.

1. What is your ideal customer profile (i.e., what defines your ideal prospect/customer)?

2. What is the propensity to buy for each prospect/customer (i.e., how likely is each prospect/ customer to buy from you)?

3. How does each prospect/customer score relative to your ideal customer profile? • What is the potential spend for each prospect/customer?

4. Do you know your share of wallet inside each account? • What is the intensity of your revenue concentration (i.e., does 80% of your revenue come from 20% of your accounts)?

5. Do you have your best sales channels covering the accounts with the most potential?

6. Do you have your best sales talent assigned to the accounts with the most potential?

7. Does each of your high potential accounts understand your full product portfolio and associated value propositions?

.Prospecting - Fill the funnel with real sales opportunities. Why is this important? Marketing is going to contribute ~30% of the pipeline, which means sales needs to generate ~70% of the sales opportunities. Pipeline per rep varies too much without a standard prospecting process used by all. Lead quality and lead-to-opportunity conversion rates suffer when prospecting is left up to each individual sales rep.

1. Do you have a standardized prospecting methodology for your sales team?

2. Is the standardized prospecting methodology based on how your buyers investigate their problems early in their purchasing process?

3. Is your lead cycle length the same, shorter or longer than your competitors?

4. Is your lead to opportunity conversion rate the same, lower or higher than competitors?

5. Is your average pipeline per rep the same, lower or higher than your competitors?

6. What resources does the sales team need when executing the prospecting process?

7. How are you going to get the sales team to adopt the prospecting process?

8. How are you going to make the prospecting process easy to execute with technology?

9. How are you going to track metrics that indicate success?

Leapfrog your competitors by operating your business on emerging best practices instead of tired best practices. This approach results in you growing your revenues faster than your competitors and your industry.

Look to emerging trends. If you have gaps in your sales strategy when compared to best practices, don’t bother fixing them. Instead, look to emerging best practices, and “leap frog” over your competitors. It takes just as much effort to implement today’s best practices as it does tomorrow’s emerging best practices.

As Wayne Gretzky once said, “Don’t skate to where the puck is now; skate to where the puck is going to be.” What’s the advantage? Leapfrog-style leaders achieve the multiplier effect of the first mover advantage while the competition is stuck in the “me too” game. Emerging best practices help you win more often with higher prices.

Leaders deploying today’s best practices, which are similar to the market standards, are caught in a competitive blood bath with lower win rates, prices, and margins. How do you know which camp you fit into? Leaders attempting to catch up are doing things such as installing out-of-the-box sales processes.

They take the easy path. Those deploying emerging best practices are designing customized processes for tomorrow’s buyer. They were capitalizing on mobile and social three years ago. These leaders listen to the market and get ahead of the next growth trend.