Have you thought about what might be missing from your organization that is keeping you from resolving revenue shortfalls, stagnant growth, or churn? I believe the answer is right in front of you – untangle the issues and you’ll be on your way to the next revenue level in no time.
For those in leadership positions who are facing revenue target misses, you have likely doubted whether you can fix or improve revenue, with your existing team. I believe you can, if the is unified on matters and held accountable for KPIs, processes, workflows, and goals.
We’ve all done it at some point in time -- wonder what it’s going to take to break a revenue barrier with your existing team. No one wants to accept it is not possible, after all, breaking up is hard to do. The old saying, “It costs less to keep a customer happy than to find a new customer,” is true with leadership team members as well. It will cost less if you can get the leadership team firing on all pistons, versus ripping and replacing them for new talent.
The six obstacles to revenue optimization can be overcome by building a process for leadership alignment, knowledge-share, and keeping your team focused on elements that matter most. Most importantly, I will add, you need to understand revenue enablement and how to uncork revenue. Learn about revenue enablement in a future marketing post.
THE 1st OBSTACLE: Leadership misalignment.
Misalignment is most commonly the result of decisions impacting the company being made in a vacuum, with a failure to collaborate. It can also be a symptom of leaders losing sight of the importance of collaboration on elements necessary for revenue enablement.
Think about the alignment of the wheels on your car, and now imagine that car is your company. Imagine your company, rolling down the road at 30 MPH. If the wheels are not in alignment, things might not be that bad. Now driving at 100 MPH, sustaining that speed, for an extended period of time. After you recover from kidney surgery you might realize how important alignment is. This first obstacle, although on the surface, and at 30 MPH, seems ‘good enough’, it needs to be great. Revenue optimization is about getting your company running at 100 MPH, and having it run smoothly.
Leadership misalignment manifests as leaders lack a shared understanding of company values, goals, strategic objectives, customer needs, and it bleeds into all areas of a company. Its safe to say this is not the bleeding edge any leader wants to operate on. Let’s say, for example, the CEO crafts company goals without the consultation of company leaders. Getting buy-in from all leaders is not likely to happen. This would be misalignment that affects everyone. Or, consider the very common problem of inaccurate sales forecasts. If your sales forecasts are off by more than 15 percent, this can be traced back to one of many reasons. The sales leader might believe marketing is doing as good of a job as they can, while the marketing leader might feel sales is not doing as good of a job as they can. What if the leads are plentiful but the sales team is not skilled at accurately gauging how likely a lead is going to turn into real money? What if the leads are plentiful but they are garbage leads? What if the leads are great, but a delay, or lack of marketing automation, in handoff of leads to the sales organization is turning hot leads cold? You get the idea, there are a lot of potential ‘what if’s’ in your way of revenue optimization.
Leadership misalignment is akin to blindfolding every leader, placing them into a giant round raft, and expecting them to efficiently paddle and navigate to a known destination (revenue target) across a body of water (the market). You would never do this and expect the team to get to skillfully navigate to the destination (strategic objective, or goal), yet we have discovered leadership misalignment is one of the most common problems to overcome. Overcoming this obstacle can be difficult if resistance to alignment is anchored or devalued at the top.
If you are looking for a place to start with a leadership alignment exercise, start with goals, strategic objectives, and make sure marketing and sales leaders share unified KPIs. When your leaders have their eyes open to how every area of the company impacts these key matters, you will find greater success in your operation.
This manifests in the workplace as more frequent collaborative meetings among leaders, and regular recurring discussions around areas of the business impacting revenue optimization. If you can envision every area of the company as a gear in structure of connected gears that drive revenue, you can envision the impact of one gear turning to impact the next.
THE 2nd OBSTACLE: Sub-optimal communication.
Communication breakdowns occur for many reasons. Setting the expectation and plan for regular recurring meetings between leaders in the company, to keep everyone on the same page separates those who have the opportunity to optimize revenue, from those who will not. I see breakdowns in communication, as described by the companies we consult with, expressed in this way:
Decisions are made in a silo,
There are real or perceived variances in how leaders and/or employees are treated (i.e., selective accountability, behind the back conversations, tone-deaf, customers, systems, processes, etc.), and
Information is not broadly or directly communicated.
With leaders in the company, the pain of sub-optimal communication is felt when decisions are made impacting their area of responsibility, without including them in a discussion about the matter being considered.
For example, if the decision is made to grow the company by 30 percent, this decision should involve leadership team members mapping to their metrics as contributing to this growth. When decisions of this magnitude are made in a vacuum, without consulting the leadership team involved in revenue enablement (i.e., marketing, sales, account management, services, etc.), you are risking buy-in. In this example, buy-in might be very strong if the leadership team, from every area of the business, was involved in the discussion and plan that resolves this question, “How do we grow by 30 percent in the next 12 months?” Having the leaders responsible for this growth, involved in the planning to achieve this growth, will gain buy-in, guaranteed.
THE 3rd OBSTACLE: Bad data.
We are drowning in data. Leveraging data to support data-driven decision-making is the balancing act of distilling good, or verified and actionable data, from bad or irrelevant data. I emphasize the importance of distilling data in your CRM, the market, and macro environment that has the propensity to change your business. Gaining outside insight – consulting data that lives outside of your CRM, is a safety measure to ensure your goals remain viable, achievable, and serves as an indicator change may be needed.
For example, if you look at your CRM and think about how many contacts you are keeping, ask yourself what constitutes the reasoning for keeping those contacts in your database. Is there a process your marketing, sales, account management, or services team follows to keep your database and contacts current? If no, why you are holding on to contact data if there is no process to verify contact information is current? How do the marketing and sales leaders feel about data in the CRM? Do they believe it is accurate? What criteria are you using to validate contacts in your CRM are real leads with an expressed interest in your offering? If data in your CRM is accurate, your sales forecasts would be accurate. If marketing is buying lists and stuffing your database, they are clogging the system with garbage leads, with little to no chance of becoming real money. If marketing is doing this, your sales funnel is not likely to be healthy. In this case, you might not need more leads, you might need fewer leads that are of better quality. Massive amounts of leads jammed into the top of the funnel are watering down your sales efforts and making it difficult for marketing and sales to dial into the best leads and work them intelligently, skillfully. Perhaps worse is the idea that your sales organization might be wasting hours in the day working garbage leads.
Bad data in your CRM is not the only data concern. Market and macroeconomic or macroenvironmental data have the power to break you.
A prime example of this can be quickly researched online concerning the fall of Blackbaud and their Blackberry device. In 2007, RIM ignored the market's interest in the new sleek design of the first Apple iPhone device. They dismissed the iPhone as a threat due to complaints about its poor battery life, and because they believed their loyal customer base - who loved their QWERTY keyboard - would never give up this feature for the iPhone design. While they ignored this product (and what was going on in the market), the market was flooded by similarly designed android devices. Apple resolved the battery life issues, and, well, the rest is history. Blackbaud market share and valuation plummeted.
Read another perspective of Blackbaud's downfall, where their demise is being attributed to their failure to innovate, "...the iPhone didn't kill RIM immediately. It just signed its death warrant."
THE 4th OBSTACLE: Lack of mandatory standardized processes.
What can be measured can be managed. Undisciplined processes are either undocumented processes or processes that are documented but not followed.
The quickest path to optimization is one where you document and standardize processes, then test and measure results. The next step in this initiative is to modify elements of the process, to then again measure results, in the quest to continuously refine and improve processes that get you closer to optimization.
One of the relatable processes to use as an example is the sales cycle. A lead will come into your company by some means and is handed to the sales team as qualified. The process of lead processing and how leads are qualified and handled requires thoughtful discussion. Further to this point, if marketing is measured (KPIs) against the number of leads they are delivering, does the sales leader agree to the metrics being used to qualify leads?
If you are not documenting a regimented sales process with defined specific milestones for prospects, and then mapping these steps to a buyer’s journey, you will not be able to accurately project revenue because your funnel will be a guessing game. If marketing is delivering leads but sales do not agree the leads are properly qualified or there are no documented requirements for leads to be handled over as qualified, you’re losing.
No company should be guessing at revenue projections today. If your revenue projections are off by more than 15 percent, your sales process needs to be adjusted, or discipline needs to be added to marketing and sales.
THE 5th OBSTACLE: Lack of commitment.
While the desire to optimize revenue sounds good if you say it fast, every leader in the company must carry the revenue optimization torch daily. For example, leading the Customer Service area isn’t only about resolving customer issues, or upselling, it is about preserving customers for as long as you can – keeping the revenue stream from them. When a leader in Customer Service understands how they fit into the mix of revenue optimization, although it sounds not traditional as people tend to think of revenue as the marketing and sales part of the organization, they are a big part of revenue.
When the leadership team understands how all areas contribute to revenue optimization, the dissemination of information becomes more natural and is seen as a means necessary for the greater good.
THE 6TH OBSTACLE: Culture.
Your company will never reach its’ optimal level of revenue enablement if the CEO, or any C-level executive, is not 100% on board with making and working to sustain these changes. This obstacle, if the employees feel this is the root of many problems in the company, will undoubtedly be the most difficult to overcome.
The health of the culture of the company can be measured by issuing an anonymous survey of the employees, giving them a chance to weigh in with their opinion of the culture of the business. This would reveal whether culture is an issue at your company. The difficulty in overcoming this obstacle is due to the behavior change required to overcome it, which is at the highest level of the company.