You have a lot on the line and no time to waste. How are you going to make your revenue growth goal for 2017? You don’t know, do you? The new year has yet to begin but you’re already worried about it.
Take a deep breath. My firm, SBI, has your back. We spend every minute of every day thinking about one thing: helping you make your number. To answer a single question, we conducted months of painstaking research. It’s difficult to grow revenue faster than your industry’s growth rate and faster than your competitors. The Revenue Growth Diagnostic interactive tool will help you determine if you are likely or unlikely to make your number.
For the past decade, executive leadership teams with aggressive revenue growth goals have counted on this flagship publication to create the annual operating plan for their sales and marketing teams. This year’s edition explores emerging best practices from the world’s best performers. These are the leaders in the top 22 percent, who consistently grow their revenue faster than their competitors and faster than their industries. What can you learn from them? To net it out, they do one thing that the others don’t: They hit their revenue growth number every year. Average executives, the remaining 78 percent, are inconsistent. They make their number one year, miss it the next; make it one quarter, miss it the next.
Lots of executives find themselves in the right place at the right time and temporarily boost the top line. But truly great growth executives don’t rely on luck and timing. They exceed their revenue targets regardless of circumstances. This article gives you an overview of how they go about doing that. To discover their secret sauce, you need to read the entire workbook and go through the exercises.
Top Performers Blend Strategy and Execution Masterfully
It is easy to be good. It is difficult to be great. Growth executives in the top 22 percent work on strategy and execution in unison, always making their revenue number in a predictable, hassle-free way. They understand that this quarter’s results reflect actions they took a year ago. And next year’s results will be determined by the actions they take today.
Some executives focus only on strategy—doing the right things. These executives suffer from periodic short-term revenue misses. They sound good but don’t produce. I call them empty suits. Other executives focus only on execution—doing things right. These executives experience periodic long-term revenue misses. They work hard but are unreliable, going from hero to goat quickly and expectantly. I call them flashes in the pan.
Our annual workbook codifies emerging best practices from these top performers into a methodology you can implement at your own company. All together, these emerging best practices constitute the Revenue Growth Methodology. If you want to grow revenues faster than your competitors and your industry, download the workbook to learn more.
Emerging Best Practices Create Powerful Differentiators
How to Make Your Number in 2017 is SBI’s flagship publication. Our annual workbook codifies emerging best practices from executives who have achieved successful outcomes. An emerging best practice is a process or a methodology that is used by the top 22 percent of growth executives, the best of the best. As a result, emerging best practices accelerate revenue growth. Think of them as powerful differentiators.
In contrast, a best practice is a process or a methodology already in widespread use. Best practices typically do not result in accelerated revenue growth. They lack the impact of emerging best practices because many executives are already implementing the same things, often in the same industry. Think of best practices as nice-to-haves.
Standard operating procedures can also be processes or methodologies. SOPs differ from emerging best practices and best practices because they are industry standards. While SOPs do not cause revenue growth to accelerate, when they are not in place revenue may decline. Think of them as requirements.
Executives who use our annual workbook share a common goal: grow revenues. The workbook presents the Revenue Growth Methodology in terms of SOPs, best practices, and emerging best practices to address different starting points:
- SOPs: Install standard operating procedures to stop, and reverse, a revenue decline.
- Best practices: Implement best practices to catch up to competitors who might be growing faster than you are.
- Emerging best practices: Introduce emerging best practices to leapfrog the competition and grow faster than your competitors and industry.
In each of these scenarios, the Revenue Growth Methodology helps executives increase the probability of making their number.
Applicability: The best way to describe the applicability of the Revenue Growth Methodology is to discuss the roles of the executives using it, the industries they work in, and the size of the companies they work for.
Executive roles: Leadership teams inside growth companies with aggressive revenue growth goals are most drawn to the Revenue Growth Methodology. Typical executive roles include the CEO, head of sales, CMO, chief products officer, chief human resources officer, and business unit general managers.
Industries: This management method is used almost exclusively in B2B industries. Our research, spanning the decade of 2006–2016, has uncovered versions of the Revenue Growth Methodology in 20 industry sectors, with concentrations found in industries that have complex sales.
Company size: Large companies (over 5,000 employees) typically use the Revenue Growth Methodology at the business unit level, most often driven by the head of sales. Midmarket companies (500–5,000 employees) implement the Revenue Growth Methodology top-down, driven most often by the CEO. Small businesses (50–500 employees) frequently adopt a light version of the Revenue Growth Methodology, often at the request of the board of directors. Companies with fewer than 50 employees rarely use the Revenue Growth Methodology.
Strategic Alignment: Accelerates Revenue Growth It’s no mean feat for executives to grow revenues faster than their competitors and their industry. The Revenue Growth Methodology is a four-step management approach Top-producing organizations ace their revenue growth numbers by bringing corporate, product, marketing, and sales strategies into alignment. that accelerates your rate of revenue growth by bringing corporate, product, marketing, and sales strategies into alignment. To dive deeper, download the workbook and turn to Part 4.
Step 1: Corporate Strategy
We start with corporate strategy because sales and marketing leaders need direction from the CEO in the following areas before they can build their operating plans:
- Objectives: Create clarity throughout the entire company by getting everyone laser-focused on the real drivers of revenue growth. Organizations that have too many objectives and priorities have none.
- Markets: Define which markets you will, and will not, compete in.
- Products: Create new markets through new products. Attract new customers to existing products. Convince current customers to buy more of an existing product.
- Competitors: Define whom you compete with and how you win.
- Go to market: Cover your markets sufficiently. Select and optimize your sales channels. Price and package your products correctly.
- Talent: Match the executive leadership team’s capabilities to the objectives and requirements in the corporate strategy.
Step 2: Product Strategy
Next comes product strategy. Great sales and marketing teams often fail to grow revenue because they are in the wrong markets with the wrong products. By addressing the following areas, the product leader gives sales and marketing teams a fighting chance to become successful:
- Product planning: Be in fast-growing product markets. Persuade current customers to buy more with fresh offerings. Attract new customers to new and existing products.
- Product principles: Accomplish product market fit. Make the customer experience a competitive differentiator.
- Go to market: Understand that future revenue sits in the product road map, use cases, and requirements backlog. Tell stories that compel your customers to act by answering the question “Why change?” Bypass psychological thresholds to overcome customer buying constraints and extract maximum value.
Step 3: Marketing Strategy
Armed with the inputs from the CEO and product leader, the CMO is now equipped to create a compelling marketing strategy that converts budget dollars into revenue by covering the following areas:
- Market research: Find and capitalize on the sweet spot in your addressable market. Understand which accounts in your market are going to generate the most amount of revenue in the shortest amount of time. Learn who your buyers are, how they make purchase decisions, and why they will choose you over your competitors.
- Strategy and planning: Create an inspiring brand that tells your strategic story. Capture the attention of customers and prospects. Earn brand preference by satisfying the information needs of your target audience. Allocate your marketing budget to the accounts with the most revenue potential.
- Resources: Modernize the structure of the marketing department. Generate better results from your agency partners. Put an “A-Player” in each role on the org chart.
- Execution: Replace leads with opportunities for the sales team. Generate enough sales opportunities for the sales team to exceed the revenue goal. Grow revenues from existing customers. Increase mindshare, and wallet share, with every channel partner.
- Marketing support: Increase pipeline attribution, customer loyalty, and customer lifetime value. Connect corporate and the field with field marketing. Make marketing scientific. Move the buyer through the decision-making process seamlessly with smartly designed systems.
Step 4: Sales Strategy
The head of sales now has what he or she needs from the CEO, product leader, and CMO to attack the market. It is time to develop a sales strategy that covers the following areas, to make the number every month, quarter, and year without fail:
- Sales planning: Understand the playing field completely. Go after accounts that are going to spend a lot this year and avoid those that are not. Understand how the executives on your accounts make buying decisions.
- Engagement: Fill the funnel with real sales opportunities. Win more deals. Win bigger deals, faster. Determine the right number of feet on the street, what type of reps you need, and the best organizational chart for you. Stack the team with “A-Players.” Cover the market completely with direct and indirect sales channels. Align territories, set quotas correctly, and build compelling comp plans.
- Sales support: Improve the efficiency of the sales team with effective sales operations. Drive revenue per head up and new hire ramp time down with sales enablement. Improve sales productivity with intelligent systems design. Be a company that is easy to buy from and sell for with a great back office.
What You Won’t Find in Our Annual Workbook
By now, you have probably gone to our website and downloaded the workbook. If you are still wondering whether it’s worth your time, read on for a description of what it is not.
- What you are doing today. It will be tempting to look at the components of the Revenue Growth Methodology, become familiar with them, and say “I’m already doing this.” That is likely to be false. You must look at this management approach in total, and in sequence. It is the unique combination of the components and the order in which they appear that allow top-producing executives to generate a return on the Revenue Growth Methodology in a reasonable time frame, with minor disruption to the business.
- A quick fix. Exceeding your revenue growth objective several quarters or years in a row is not easy. Growing faster than your competitors and your industry on a consistent basis does not happen by means of short-term projects staffed with part-time resources. A Revenue Growth Methodology brings the functional strategies of product, marketing, and sales into alignment with the CEO’s strategy for the company. That requires investment and skill.
- A large, complex, overengineered “strategy” project. Companies accelerate revenue growth through a masterful blend of strategy and execution. They do the right things (strategy) and they do things right (execution). A Revenue Growth Methodology needs to be designed and implemented by specialists who have deep domain knowledge in working with sales, marketing, and product teams to grow revenues. Strategy without execution is a waste of resources.
- Sales training. An emerging best practice such as the Revenue Growth Methodology helps companies get into the right markets with the right products, defeat competitors with sales and marketing effectiveness, and fill an organizational chart with superstar talent capable of executing the CEO’s strategy. Sales training is among dozens of tactics inside the single silo of sales.
- A software application. The Revenue Growth Methodology is not a tool. It is a management method used by the executive team to grow revenues. A software application is a tool that might be used to automate some of the components of the Revenue Growth Methodology. Two very different things.
- A framework. Frameworks developed by analysts and consultants that come with subscriptions to advisory services are academic constructs to help executives think through difficult problems. The Revenue Growth Methodology is a step-by-step process that is used daily by executives to act, not just think. It is used by practitioners, whereas a framework is read about in a research report.
- Something that can be implemented by one executive. Sometimes companies seeking revenue growth hire a new CEO, head of sales, CMO, or brilliant product engineer. Top talent is very important but hiring here and there cannot grow revenues by itself. The Revenue Growth Methodology is used by a team, not a single outstanding executive. The benefit of this management approach is to get the executive team, and their respective teams, into strategic alignment. This helps an entire executive team reach its full potential, not just one person.
Your Ticket to a Successful 2017
If you are like most of the executives I talk to, right now you are feeling insecure about the upcoming year because there are a lot of unknowns. Your number went up and with it, so did your personal risk. You feel threatened by the magnitude of the task. You feel worried and concerned about your future. And you are not alone in feeling exposed. You don’t know how you will make your number in 2017 just yet.
Have expectations gone up and left you wondering if you can make your number? 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 yourself against SBI’s sales and marketing strategy to find out if:
- Your revenue goal is realistic
- You will earn your bonus
- You will keep your job