With Only 13 Shopping Days Until Christmas, Your Planning Time Is Expiring Quickly
Every client and prospect is in planning mode right now. The problem is your time to do planning is quickly coming to an end.
On January 2, you’ll be in 2019, and if you’re still planning or just getting your execution locked down, you’ll be eating into any hope you have of hitting your 2019 goals. Miss your January numbers, and you’re likely to miss the entire year.
Let’s work to make sure that doesn’t happen. One of the best ways to do that is to know where your numbers and revenue are coming from.
For example, let’s say you’ll finish the year at $25 million in revenue, and you’ll start next year with $15 million in booked business. If you want to grow to $35 million in revenue, you’ll need an incremental $20 million in new revenue. Where is that coming from?
No, I’m really asking — that was not a rhetorical question. You need to know exactly where every penny of that $20 million is coming from to consider that a legitimate and attainable goal. Stretch or not, if you can’t point to the place where that money is coming from, you need to reset your goals.
Here’s how to look across your organization to find the revenue growth opportunities in marketing, sales and customer service. Yes, in customer service, too.
The days of pulling numbers out of the air are over (or at least they should be). You have data on the performance of your marketing last year. You know how many visitors came to your site, how many converted into MQLs, how many of those were SQLs and then how many of those were actually sales opportunities for the sales team.
Start there. If you improved those numbers from top to bottom, what would the year look like? This is the start of building a revenue cycle. Marketing generally covers the first half of the revenue cycle, with sales covering the back half. We’ll do the rest of it when we touch on sales, but a revenue cycle model is something you should be building for 2019.
How much improvement can you expect? That depends on what you’re planning to invest in both time and money to drive an improvement.
If you’re not planning much differently than last year, don’t expect much improvement. Are you adding new people? Are you planning new tactics, campaigns or programs? Are you adding an agency to help you drive the results?
Do you know that a compounding factor is associated with improving each stage of your revenue cycle? More visitors and increased conversion rates all through the cycle help to produce massive improvements.
In case you forgot about the revenue cycle, here is an example for you to use at your company.
Each of your new tactics should be aligned with improving one of the numbers we discussed above.
Once you go through this exercise, you should have a very clear idea about what level of lead generation increases to expect. Break those down monthly, and set these as your monthly goals for 2019.
Marketing is just a third of the puzzle here. Increasing visitors and leads is not going to get you to your goals.
You should have a year’s worth of performance metrics on your sales team, too. You should know how good the sales team is at converting sales opportunities into actual proposals or recommendations.
You should know your close rate on those proposals submitted. You definitely should know how many new customers and how much revenue each rep closed last year, so you know the average revenue for new clients from 2018. And you should know the number of days it takes to turn a new lead into a new customer.
Now we’ll go through the same exercise. What are you planning to do differently next year compared to this year? Because if you have nothing planned to upgrade your sales execution, you can expect the same numbers next year.
If your close rate is 20% on proposals submitted, what can you do to make that 40%? That move alone could double the revenue production from your existing sales team. No need for more leads, no need for a bigger marketing investment and no need for more salespeople.
The more improvements or upgrades you have planned, the better you can expect the back half of your revenue cycle to improve.
Now take the improved performance from the marketing and the sales, and see how close you are to getting to that $20 million goal. You’re probably going to be short, because you’re still missing a third of the opportunity.
Yes, your customers have unlocked revenue potential. We ask all of our prospects to share with us the percentage of current customers who buy everything they offer, and the answer is almost always below 20%.
That is just a shame. These people already love you. They already use you. You’re not competing against anyone. Marketing and sales energy focused on your current customers produces revenue faster and at a much lower cost.
This has to be part of your 2019 plan.
Again, you should have data on which customers buy what products and services. From this data, you should also be able to see which customers could be buying other products and services.
Create segmented lists of customers, and then create ongoing, rhythmic communication to share stories about how other customers are benefiting from using additional products or services.
These communications could be email campaigns, outreach from sales or customer service, invitations to a customer-only webinar, invitations to live events or special customer appreciation offers.
Make sure to limit the selling, discounting and promotions. This is not about promoting — it is about stories. Help people realize they might be missing what other customers are getting. This is a powerful technique.
Set some very specific goals for the customer service team, such as the number of customers who buy new services, revenue generated from current customers and average revenue per customer growth targets.
Next, start looking at to activate your customers as advocates. This is a growing marketing trend that helps you market better and sell more to new and existing customers. You want to make it clear to your customers that their voice matters, and if they’re happy, you’re willing to reward them for telling their story.
Online reviews on sites like Google and Facebook (as well as third-party industry directories) are becoming increasingly popular. Here’s one for agencies to give you an example. We’ve earned 149 reviews (averaging five stars), and we’re working hard to get more.
Videos, testimonials and success stories require participation from your customers, and if they are willing to participate, you should be willing to reward them in some way.
References are key to closing new business and closing it quickly. Customers who serve as references or actively provide you with referrals should also be rewarded. They’re taking their valuable time to help you, and you’re saying thank you in the form of a token of your appreciation.
Working on advocacy now is going to help you all through 2019, and it’s going to allow you to allocate more new revenue from current customers.
Now that you’ve clearly set goals for revenue from marketing, sales and current customers, add up all of those numbers and you should have a good forecast for net new revenue for 2019. In addition, you’ll have an idea of what strategies, tactics and programs you need in 2019 to deliver these numbers and the budget you’ll require to produce that effort.
Believe it or not, this can be done in an afternoon (this shouldn’t take weeks), and it also gives finance something to work with. When you let finance set the marketing budget, they’re going to give you want you had last year (if you’re lucky) while still expecting revenue to grow.
This legacy approach to financing marketing, sales and customer service is another good reason why companies miss their revenue goals month over month. You should break the cycle and try this method this year.