After 20-plus years working with small to medium-sized business owners and CEOs on revenue generation, I’ve put in my 10,000 hours and I’ve learned a lot along the way. Most of it, I’m happy to share with my clients.
However, I still find a lot of CEOs in denial when it comes to what’s keeping them from growing their businesses. Here’s a hint – it’s not your marketing agency or your internal marketing team.
I can tell in 10 minutes after talking with a CEO if they’re going to hit their revenue goals.
Here’s what I look for and how the answers to my questions inform my opinion:
That’s it – six questions that people can generally answer in 10 minutes. However, most company leaders can’t answer these questions or their answers are insufficient. That usually means they have no chance of hitting their revenue goals.
Let’s take a closer look at what I’m trying to learn by asking each of these questions.
It’s incredibly hard to generate leads, sales opportunities and new customer revenue when your business is ordinary or at best similar to your major competitors. Why would anyone choose you over your competitors if you don’t have anything remarkable going on?
Unfortunately, this is 95% of businesses They are, to use Seth Godin’s language, brown cows when they should be purple cows. A brown cow is invisible whereas a purple cow attracts a crowd.
If your business isn’t a purple cow in some way, it’s going to be difficult to grow revenue. When I ask this question, I get a lot of answers that while interesting don’t make for remarkable, including:
By definition, remarkable is something NO OTHER company can say. This might be a challenging exercise, but your company has to be remarkable if you want to hit your revenue goals every month.
Again, this might sound familiar. Most companies simply add some percentage to what they did last year and expect to do that this year. If they did $5 million last year, this year they expect to do $6 million. They then divide that number by 12 and, voila, they have monthly revenue goals.
Unfortunately, that’s not the best way to go about setting revenue goals.
First, figure out how much new revenue you need and how much recurring revenue you’ll get from current customers. This is an important distinction. It may look like you need $1 million in incremental revenue, but upon further review, you discover that only $4 million of last year’s $5 million is booked for next year.
Now you need $2 million in new revenue to hit the stated goals. How many leads do you need to get to that revenue? How many of those leads will turn into sales opportunities? How many of those will get proposals, and what percentage of those will close? That math is critical to setting your goals.
For example, you might need 2,000 leads to get an extra $2 million in revenue. Is this something you’re capable of delivering on? Have you done it before?
This is a common scenario, and this question should be answered honestly. What are you planning on doing this year that you didn’t do last year? How are you going to guarantee you get 2,000 leads?
This question builds on question two. Do you have the budget to support the team, the programs and the technology to generate 2,000 leads in 2024? If not, you’re never going to see $6 million in revenue.
It’s widespread for me to find misaligned goals and investment criteria. I also find CEOs who believe their move is to spend as little as possible on marketing. If you want to hit your revenue goals, you have to align your investment to the expected results.
It’s possible that you have to double or even triple your marketing budget next year to generate 2,000 leads. You should know that going into the year, understand exactly where that money is going to be spent and know how it’s going to help you get to 2,000 leads.
This is the deeper review of what leads up to the effort to generate the 2,000 leads you think are needed to hit your revenue goals.
To know for sure if you have the program and budget to generate 2,000 leads, you first have to know how you’re currently doing.
How many people come to your website every month? How many of those turn into leads? How many of those leads are sales-qualified? How many of those sales-qualified leads are actual sales opportunities for the sales team? How good is your sales team at turning those into new customer revenue?
Each of these steps is a stage in your revenue cycle, and you need to know the numbers and conversion rates at each stage of your revenue cycle.
Knowing this is the first step, you should model a desired state revenue cycle that shows you how you’ll turn 2,000 leads into $2 million in incremental revenue before the end of 2024.
This metrics-driving exercise is mandatory if you want to hit your goals. Without it, you have no way to measure the effectiveness of your revenue generation system and to optimize it throughout the year.
This is another component that is often missing in most companies. First, most companies don’t have a documented formal sales process, which means they have no process at all. Salespeople are doing whatever they want.
The only way to ensure you hit your revenue numbers is to design a sales process that everyone follows and is so detailed that anyone can pick it up.
The sales process should be designed to give each prospect a highly educational, advisory and guided experience that wows them. Even if they don’t hire you, they should be recommending you to others because your sales process is remarkable.
If your sales process is firing on all cylinders, you’ll need your sales technology and CRM to support it. You’ll see in the data how well it’s helping you turn sales leads into new customers, and you’ll be using content to help create an educational experience your prospects love.
Without a sales process, you can never optimize the experience you need to help your prospects feel safe enough to choose your company over the competition.
A lot of people think the technology they use is a checkbox item, meaning as long as they have something, they’re good. Again, this is incorrect.
Your tech stack is a critical and integral component of whether you’ll hit your goals. If you’re on disparate systems (more than one technology that may or may not talk to each other), it’s going to be harder.
If you’re on a bunch of point solutions (a handful of tools that do single things), it will be harder. If you’re not using something for marketing, a CRM for sales and a customer service system, it’s going to be nearly impossible to grow even a little bit.
Perhaps even more important to your growth goals is your database, the data you’ve collected on your prospects and customers. Is that data clean? Is it accurate? Is it complete? Is it easy to access? Is it properly segmented? If your answer to any of these questions is no or I don’t know, you’re likely to struggle to grow.
Your technology and your data need to be one. You need to be working from a single customer data platform that allows you to easily track, automate, analyze and make data-driven decisions about how you go to market and how you generate revenue.
Without it, you’re driving blind in a storm.
When I talk with CEOs, I need solid, well-thought-out, informed and educated answers to all six of these questions to be certain their company has a chance to hit its stated revenue goals. If even one of the answers to these questions is hazy, the chance of hitting goals is small.
What’s good about this situation is now CEOs know what they need to do to get ready for 2024. They should know what areas need their attention, what areas need action to tighten down the plan and what areas might still be unclear.
In just a few weeks, answers can be found and plans locked down. Focus on these six areas and make 2024 your best year yet.