Four Keys to Build an Unstoppable B2B Revenue Machine in 2020
My job, and core mission, is to help B2B companies accelerate their revenue growth. While every company has a different set of challenges and objectives, there are some common dynamics at play that can be used to boost revenue without busting the marketing and sales budget.
Dynamic 1: Revenue assessment. Effective growth planning always starts with an assessment of the past, plus your current challenges and opportunities. One of the
tools we use to accomplish this is the Sigmoid Curve, which is used to chart where you are in the lifecycle of both your company and specific products/services. Are you in startup phase, growth, maturity, or possibly in decline? Are you growing while the rest of the industry is in decline, or vice versa? Chances are that you are on a similar trajectory but you need to know this to progress. For more information on the Sigmoid Curve, see my November column at CustomerThink.
As part of the assessment, you should look for revenue leakage and revenue time bombs. Revenue leakage refers to “preventable” reasons for sales declines such as:
- Failure to capture/count inquiries.
- Rep-generated inquiries handled outside the system.
- Failure to follow-up (FTFU) quickly.
- Ineffective nurture program.
- Poor conversion rates.
- Complex selling/buying process.
Revenue time bombs are issues that if not addressed, will “explode” on you in the future (which could be next month or years from now). I see five of these issues on a regular basis:
- Channel partners that are underperforming or leaving you for the competition.
- Technology that can’t support your growth.
- Prohibitive cost of sales and marketing (as a percentage of sales).
- Weak product strategy.
- Team performance issues.
Dynamic 2: Right Revenue Model (L2R).
A revenue model is a framework for generating revenue. It identifies which revenue source to pursue, what value to offer, how to price the value, and who pays for the value. It is a key component of a company’s business model. Your revenue model should be fine-tuned to:
- Sell your stuff to more customers.
- Sell more stuff to each customer.
- Sell the same stuff for more money.
- Sell stuff more often to each customer.
There are four revenue model levers at your disposal: How you sell, price, package and deliver your products and/or services. You can manipulate each of these levers to boost revenue and profits. And to accelerate revenue even farther, consider adding one or more new revenue streams. Do you have a product that can be supplemented with a service, or a service that can be productized (as has happened with many successful software companies) to create a full solution offering. Perhaps you can expand to new geographic or vertical markets. How about adding an e-commerce component? Finally, do you have the optimal blend of direct vs. channel sales?
Dynamic 3: Effective nurture program.
Some companies are great at selling to highly qualified prospects who are currently in the market. But the outstanding companies are equally good at selling to those who are not in the market today, but will be so in the future. Our experience shows that if you effectively nurture everyone who responds to an initial offer, you can sell as many so-called unqualified “suspects” in the future as you sell to qualified prospects in the near-term. Remember that if you have their opt-in permission to contact them via email, the incremental cost of bringing in these new deals is extremely low.
Separate nurture programs should be created for:
- Inquiries that didn’t pass initial sales qualification.
- Those who abandon a shopping cart.
- Existing customers for re-sell and up-sell.
- Industry influencers, analysts, press, etc.
While there is a lot that goes into a successful nurture program, I’ll share two critical strategies. The first is to include some non-sales content (e.g. articles, papers, video) in your communications so that you don’t appear to be too hard-sell. And second, be pleasantly persistent. Converting a soft lead into a customer make take one try or 100 tries. Let time and the law of averages take its course and you will be rewarded with more profitable revenue.
Dynamic 4: Marketing and sales alignment.
It’s possible to hit your B2B revenue targets with misaligned marketing and sales departments, but it’s not likely. Many marketing and sales managers know they suffer from this malady but ignore the issue because of the potential for conflict. However, like a lot of worthwhile objectives, the reward is well worth the effort. There are three alignment imperatives to focus on:
- Congruent Messaging. Marketing can help the sales team message correctly by:
- Focusing on internal training.
- Creating customer-facing messaging templates (e.g. email/ presentations).
- Constantly monitoring for consistency – no optional behavior is acceptable.
- Aligning your brand message with your customers’ experience – from initial contact through delivery and usage.
- Effective Processes. You need to agree on the lead-to-revenue model with your counterparts in the other department. As one example, you can choose the Wide Funnel model where you separate the wheat from the chaff after the opt-in. Or you can choose a Narrow Funnel model where you separate the wheat from the chaff before the opt-in. Each approach requires different methods, procedures, offers, etc. and requires both groups to be fully aligned.
- Shared Metrics. It has almost become a cliché but the truth is – you really can’t improve what you don’t measure. To be fully aligned, you need to have a set of key performance indicators (KPIs) that show how both departments are doing independently, but also how to show overall performance and track improvement. Although there are dozens of data points you and track, too much measurement can be counterproductive. After all, you don’t want to spend so much time measuring that it detracts from the doing. Here are a few KPIs I usually recommend to my clients.
- Cost per new inquiry.
- Conversion of inquiries to qualified leads.
- Cost to acquire a new customer.
- Cost per new dollar of revenue.
- Sales and marketing cost as percentage of revenue.
- Conversion of qualified leads to opportunities.
- Opportunity close rate.
- Average deal size.
- Sales cycle length.
I hope these revenue dynamics are useful in helping you achieve a more prosperous 2020.
- 6 Lessons B2B Companies Can Learn from Amazon - July 6, 2020
- It’s All About Revenue: Six Ideas to Power Your B2B Sales Engine - June 10, 2020
- Nine Requirements of Powerful Thought Leadership - May 20, 2020