Every company should have a High Performance Revenue Machine. You put leads in one side and consistent forecastable revenue comes out the other. A High Performance Revenue Machine maximizes a company’s application of both the art and the science of sales and creates a consistent end to end process that spans the entire Revenue Chain. I think it looks something like this:
As you can see there are four distant components. Lets look at them.
Drive Demand
It all starts here. Our first machine component is build around three processes.
First we have to develop the Go-To-Market Strategy. In this process we need to accomplish such tasks as pick and segment the target markets, build our messaging, rationalize our pricing, understand the competition and decide what the distribution organization looks like.
Next we need to Build the Demand Model. Here we undertake such tasks as identify the demand channels, validate the technology infrastructure, create common definitions (i.e. what’s a lead), develop the hand-off mechanisms and other similar tasks.
Finally we start to Generate Leads. To accomplish this we need to build and execute marketing campaigns, track our ROI, nurture relationships and forward appropriate leads to sales people for follow-up.
Manage the Buy Cycle
This step is also known as the Sales Cycle. I like Buy Cycle because the real job here is to facilitate the customer’s buying process. Many companies have developed custom cycle steps and that’s ok but in general I think each of those steps falls into one of these general categories.
Qualify-no matter how good a lead is when you get it you have to make sure that the company is qualified. Ideally that means they have a need, a budget and some desire to use that budget to meet the need. However, there are occasions when the company has a need they don’t understand yet and then the task is to guide them to an understanding of that need and instill the desire to address the situation.
Discovery-once a lead is qualified you need to go through the process of truly understanding the company. The most effective sales people will use this time to learn how the company makes money, the current challenges that exist and spot opportunities. At the same time one must learn to operate within the political environment that exists in the prospect. All companies have one and they way opportunities are pursued can vary widely depending on the company.
Opportunity Identification-the idea at this stage is to create a spreadsheet that looks something like this.
Some important points on creating your sheet. First it is required that your prospect buy in on each line item. The more concurrence you can create the easier the rest of the process will be. It will take time to do it this way…it is worth it. Next you will notice that I used an easily quantifiable point in the example. There may be Value Opportunities that are not quantifiable, put them in a different sheet. When you are done you will have two sheets that will form the basis of your business case for proceeding with the purchase.
Build the Business Case-here we will use the information we have collected to build both the business case and the presentation that will be given in support. We will talk a lot more about the format of this case in subsequent posts but always remember that it must stand on it’s own. When you leave it behind it will take on a life of it’s own. People you may never meet will read and comment on it so make it as clear and unambiguous as possible.
Gain Concurrence-once your case has been built you still have to make the rounds of those that are involved in the decision to make sure that you have their concurrence and overcome any unforeseen objections. The end of this step is when the prospect is ready to negotiate.
Negotiate-now it is time to agree on the details of the transaction. There is a whole body of work that surrounds this particular stage and this stage has been impacted from the very beginning of the process. Always remember as you set expectations at any place in the Buy Cycle they come back to you here.
Close-now it’s time for the ultimate buyer to sign the deal. Always remember it’s never done until it’s done.
Before we move on remember there is a art to all this. We could easily spend a week on any one of these stages and true sales professionals spend a lifetime on improving them.
Implement and/or Deliver
It doesn’t matter what you sell at some point its time to deliver the goods. In the case of some products there may be an implementation process and for others just a product delivery process. In all cases the execution of this component of the revenue cycle will have a direct bearing on future revenue from this client and others.
While the steps may vary wildly from company to company those steps generally fall into one of three processes.
Plan-no matter what your product after the sale you have to plan the specifics of delivery.
Execute-once the plan is in place it must be executed.
Validate-there needs to be a feedback loop established to ensure that the execution of the plan has been properly done and no adjustments must be made.
Grow and Extend
Every business knows it is far easier to sell to the customers you have than to acquire new ones. This final piece of a High Performance Revenue Machine deals with how those relationships are managed.
This component is built around four processes.
Account Strategy-every account should have be a part of an account strategy process. For larger key accounts that may mean the development of an individual account strategy. Smaller or more regional accounts may be part of an account class that would then have a defined strategy. This Account Strategy process is where you will make the decisions concerning resource deployment and account focus.
Account Planning-here you need to execute the Account Strategy. Again for larger accounts this is an individualized activity and smaller ones may be combined into an account class. In either case there must be defined objectives that support the overall strategy, a way to measure the attainment of those objectives and a regular review of the progress.
Relationship Management-there must be some framework associated with how each account relationship is managed. Larger accounts will have teams of staff assigned and many contact relationships to manage. Smaller accounts may have just a single contact and be assigned a representative that manages multiple such accounts. In both cases there needs to be a systematic methodology that ensures proper attention is paid to each and every customer.
Customer Satisfaction-every High Performance Revenue Machine must have a customer satisfaction component. There are several defined methodologies that exist ranging from Net Promoter Scores to Differential Value Propositions. It is important that one be chosen that best supports a particular business and that it be consistent over a period of time. This is the only way you will be able to get a view of how your customers perceive your company and this is vital to the ongoing production of revenue.
Those four components combine to build a High Performance Revenue Machine. To be really effective your machine must be consistent across all departments that are involved. Terminology, definitions, KPI’s and other details must be common. When they are you have enabled three cross functional activities.
Analyze and Improve-just as TQM, Six Sigma and Lean Manufacturing have impacted manufacturing and other process over the years now the revenue cycle must be impacted. If your High Performance Revenue Machine is integrated across your enterprise then you can analyze its performance and make adjustments to improve results on a regular basis.
Reporting and Analytics-commonality across your enterprise will enable a range of insights and status reports across your Revenue Machine. For example if incoming leads drop by 15% what is the impact on revenue next quarter, the quarter after that or two years down the road. If we spend dollars to increase the percentage of prospects that move from Discovery to Opportunity Identification what is the impact on revenue. With common data across your enterprise analytics can now be performed to help assess the ROI of individual actions, spot trends in data and pinpoint key spots in your process where improvement is possible.
Forecasting-revenue forecasting is always a bit of a guess. But when you have a High Performance Revenue Machine you can measure each point in the process and understand the impact on revenue. If you see your leads increasing you know how long you have to bring the resources to bear that will deliver on those sales. If customer satisfaction starts trending down you can react to the problem and minimize the revenue impact. The ability to review and include data from the entire revenue cycle in your forecast methodology will enable more consistent forecasts in the short, mid and long term.
Building a High Performance Revenue Machine will let your business focus driving growth and reap the rewards that come along with that growth.
