Many companies face this same question today. Their customers don’t spend much, on average, and they tend to come and go. So the scramble to find new customers never ends.
Setting the right performance conditions requires you to adopt emerging best practices. Review the How to Make Your Number in 2018 to access emerging best practices outlined in phases within the Sales Strategy section on pages 342 – 422.
It’s a costly cycle to keep adding new customers for the majority of your revenue. Our hunter-gatherer ancestors knew this. That’s why they adapted. Farming promised a better, more reliable yield that was easier to attain.
Farming existing customers offers similar benefits. Up-selling and cross-selling bring more revenue, longer term, at lower cost.
Is high customer churn threatening your sales revenue goal?
Today, we’ll discuss high customer churn and why it’s a red flag you can’t ignore. Then we’ll introduce a proven methodology that can help combat it.
High Customer Churn – What It Looks Like:
It’s not a pretty picture. But it’s woefully common. According to our latest research, 51% of B2B companies suffer from high customer churn. And the corporate chaos that fuels it.
Here’s how chaos manifests in most organizations. All of these are problems are revenue killers.
The buying process isn’t mapped, so buyers aren’t engaged appropriately. Touch-points are sending mixed or wrong messages.
Rogue Sales Tactics:
The sales team is promising more than it can deliver.
Frequent Cost Overruns:
Campaigns or initiatives that go nowhere. Rampant discounting to close deals. Costly compensation plan. The list of possibilities is endless.
Bad Sales Forecasts:
The pipeline looks promising. In reality, it’s full of bad leads that get stuck or disappear.
High Turnover Among A-Players:
Dissatisfaction sinks morale. Your top talent won’t tolerate dysfunction for long.
What It Signals:
The above issues are symptoms of serious internal problems.
- Corporate strategy isn’t well defined or understood. Product, marketing, and sales strategies are all over the map.
- Functions are poorly managed. A-player talent and/or coaching and development are lacking.
- Functions are at cross purposes. For example, sales and marketing define their terms differently. If your functional teams are undermining each other, no one is performing well. Many failures and fingers pointed, but few lessons learned.
What You Need – Revenue Growth Methodology:
It’s difficult to grow revenue faster than your industry’s growth rate and faster than your competitors. SBI’s Revenue Growth Methodology allows you to accelerate your rate of revenue growth. It does this by getting the functional strategies of sales, pricing, marketing, product management, and human resources into alignment with the CEO’s strategy and the external marketplace.
SBI has discovered that organizations that exceed their revenue targets follow a 5 step process:
Step 1: Corporate Strategy
Determine how you will serve customers, the objectives you must achieve, the markets you will compete in, the competition you will face, and how you will win.
Step 2: Product Strategy
Make investments in products and services that result in solutions that are in high demand that buyers are eager to purchase.
Step 3: Pricing Strategy
Create price positioning, structures, and levels to execute a value-based pricing strategy that will maximize your revenues.
Step 4: Marketing Strategy
Drive demand in the marketplace for your company’s products and services.
Step 5: Sales Strategy
Turn market demand into revenue by allocating sales resources effectively to drive revenues up and selling costs down.
Have expectations gone up and left you wondering if you have the right strategies to support your revenue growth goals? Here is an interactive tool that will help you understand if you have a chance at success. Take the Revenue Growth Diagnostic test and rate your Sales Strategy against SBI’s emerging best practices to find out if:
- Your revenue goal is realistic
- You will earn your bonus
- You will keep your job