Growth is hard to achieve. McKinsey’s analysis of more than 5,000 public companies shows that growth champions—companies that profitably outgrow their peers—create 80% more shareholder value than their peers over a ten-year period. But only one out of eight companies grew their revenues by more than 10% per year over the span they studied (2010-2019).
Done alongside revenue forecasting, revenue planning is a powerful way to align and channel sales revenue into revenue growth (whatever that looks like for you).
We realize it’s hard to carve out time to emerge from working IN the business to work ON the business. But if you skip the all-important step of forecasting which revenue investments are going to bear the most fruit, you could be squandering thousands, if not millions, of dollars in hard-earned revenue. Without revenue planning, you’re just guessing as to the best investments to make to grow your business.
Intentional Planning and Forecasting Drive Revenue Growth
So, where should you start? On what should you focus? What’s the best way to evaluate your current performance and surface greater opportunities in the coming year?
Tip 1: Figure out your goals for the coming year.
For instance, if you want to do $20 million in business, where do you go and what do you have to do to get that business? You need to address it with a go-to-market strategy, which should start with identifying your ideal customer profile and the five or six people in the buying group who decide on the services and products you sell.
Tip 2: Define your go-to-market architecture.
Identify your target audience and map out the products you will sell to particular segments of the potential buyer landscape. You’ll need to build out a buyer’s journey map, including the length of time it takes to close, and identify the people in your company who will help you execute strategic tactics along that journey. What are the key influencers along the journey, and what are buyers paying attention to along the way? Whitepapers? Associations? Marketing materials? Or are they relying on a subject matter expert (SME) or salesperson to guide them through to the sale?
Tip 3: Coordinate responsibilities.
Once you’ve agreed on what you want to achieve to thrive, you will need buy-in from all departments, with a breakdown of who in your organization will execute on elements of your plan. Distinguish between the volume of marketing-based leads vs. sales-generated leads that will fill your sales funnel; and then attach the right people and departments, from marketing to sales to product, to perform particular selling motions, where and how they will generate demand.
Tip 4: Devise a sales structure.
Your revenue plan should outline both your go-to- and route-to-market strategies. Analyze sales channels to decide where and how your prospects will buy from you in a cost-effective manner, whether through a direct or indirect channel. Then, make sure you have a sales structure in place to execute on your go-to- and route-to-market strategies. Your structure should have sufficient coverage by either inside or outside salespeople (or both) to meet your sales goals.
You want to get the right sales talent with the right acumen. That could mean training your current team differently or hiring net new people, and it points to the necessity of being able to pivot. It also means you will have to plan for appropriate workspace, compensation, incentives, and benefits.
Tip 5: Know your ideal customer.
Understanding your ideal customer profile is key, as it ties many elements of your revenue plan together. For instance, once you know your ideal customer, you will have a better view of how many sales roles you need to fill, and where, to cover the greatest number of accounts that fit your ICP.
It also determines your engagement process and the technology you will need to support that process in a cost-effective and efficient manner. It may help you sketch out how your customer prefers to buy, how and when they want to engage with you, the processes enabling engagements, and the technology needed to produce the results you want.
Tip 6: Align and execute.
You’ll need to put a sales readiness plan in place that you can execute efficiently. Your sales and marketing teams must be thoroughly aligned on strategic and tactical initiatives. Research from Revenue Marketing Report 2022 found that companies struggling with sales and marketing alignment are twice as likely to miss revenue goals. The report also found that while many companies surveyed are exceeding their revenue goals, alignment between sales and marketing has declined. The best forms of alignment include executive buy-in, regular joint meetings, and shared KPIs. And your sales training program must align with the customers your reps are calling on—current customers vs. new customers—and with the products or services you are selling.
To Grow Revenue, You Have to Be Prepared to Pivot
B2B sales is a moving target, but you can review the trends over the last four to six quarters to gain some insight into what is likely to change and what will remain the same. Some studies indicate that by 2025, 80% of B2B sales will be digital. Whether this comes to pass, agile sales teams who are poised to adapt to changing B2B buyer behaviors have a much stronger chance of driving revenue growth and reaching their goals.
It’s also critical to have flexibility embedded in your plan. In an environment of global uncertainty, sales leaders must be prepared to pivot based upon the changing dynamics of selling. Recognize that many things are out of your control. Manage uncertainty by having a plan B (even a plan C) ready to roll when unforeseen circumstances require you to take a detour. Counteract potential planning constraints by investing in things that will make your business grow. Otherwise, your competitors can outrun you. And be hyper-diligent for trends that could derail what you are doing and be ready with the foresight to expedite a response.
Remember that acquiring a new customer is 4x more expensive than getting net new revenue out of a current customer; about 75% of your revenue growth should come from current customers.
Avoid These Common Revenue Planning Pitfalls
Probably the single biggest mistake made in revenue planning is doing it too late. It takes a while to get it all done, from your first round of strategic conceptualizing and number-crunching to getting a seal of approval from your executive team. Related to timing is collaboration. You need input and buy-in on goals and objectives from multiple departments and perhaps from external partners, and this takes time. If there is a lack of clarity and goal misalignment your plan may not be fully optimizable.
Another obstacle to adequate revenue planning revolves around your data quality. Having a view into recent, relevant customer data lays the foundation for an effective sales revenue plan. Most companies struggle to collect, retrieve, and analyze data in a way that will bring expected results and they settle for doing the best they can with the data they have.
In a recent survey by AppDynamics, 75% of global IT professionals across major industries said their organization needs to connect full-stack observability to business outcomes within 12 months in order to remain competitive.
Strong sales organizations need horsepower behind their data collection capabilities and sometimes that calls for investment in external technological tools to avoid making a big mistake.
Invest for Better Revenue Growth
If your revenue plan consists of testing new markets or channels, opening underserved markets, or increasing market share in existing markets and with current customers, MarketSource offers viable solutions worth exploring. Maybe you have gaps in last year’s revenue plan, or new channels have emerged since last year; this is where we can provide you with the skilled talent and the proven processes driven by a purpose-built tech stack to get results in the next fiscal period.
And we can stand up a sales team with supportive technology and sales processes that match your mission and strategy in a matter of weeks. There is no huge capital outlay, and our solutions are a variable cost to your sales organization. Many large B2B sales organizations have found this to be the smartest investment they have ever made to fuel revenue generation and drive sales results.
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