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REVENUE GROWTH

This sounds quite obvious as it’s pretty much the only goal of a sales team. Yet there are so many ways of achieving this goal that one tends to follow pre-defined paths, sometimes forgetting that other options could also bring good results. An external eye can help.

upsell

It is all about making sure we don’t leave any low hanging fruits on the way. Once you have gained a customer for a specific topic, you want to make sure he is fully equipped. Yet in some cases the contrary will happen: sell and run away…

  • Creation of formal upsell map (product dependencies / natural upsell opportunities)
  • Calculation of total upsell potential for entire installed base
  • Action plan to work on upsell opportunities:
    • Mass marketing campaign for solutions with short sales cycle / low unitary value
    • Targeted actions for higher individual potential opportunities
  • Get buy-in from middle management
  • Training of teams (marketing and sales) for upsell campaigns

cross-sell

When it comes to selling outside of the initial scope of a customer, many will become shy or will not know how to handle it. Getting out of your comfort zone is never easy, and often requires some external expertise.

  • Creation of formal cross-sell map (need to identify drivers for customers to extend their product scope)
  • Assess true potential for installed base (will have to be refined over time)
  • Action plan to work on cross-sell opportunities:
    • Mass marketing campaign for solutions with short sales cycle / low unitary value
    • Targeted actions for higher individual potential opportunities
  • Get buy-in from middle management
  • Training of teams (marketing and sales) for cross-sell campaigns

price increase

Pricing adjustments (inflation) are becoming common, but if your company has not gone through the process once the task can be very challenging without external help. Make sure you do not forget anything (contract, sales comp, CSAT…)

  • Design a pricing simulator (Excel based) to work on potential changes
  • Pricing model change full project management (commercial, financial, legal, HR…)

pricing model

Radical changes in the pricing model have far reaching consequences. A full project team will have to be set-up and it is common practise to bring an external resource to drive it as it can be a full-time job for several months.

  • Propose new pricing principles to optimize revenue (i.e shift from licence to Saas, from consumption to subscription)
  • Create the new pricing model (usually on Excel before it has been stabilzed)
  • Reverse engineer deals of past fiscal year to check behaviorof new model
  • Design new price lists
  • Prepare legal & communication pack
  • Train sales team on usage of new pricing model

channels

When growing beyond a direct sales model, you may need some help in order to make sure you do it properly. Influencers, integrators or resellers all have their own expectations and requirements. It is critical success factor.

  • Resellers: design and launch a new program to recruit resellers, or audit an existing one. From identification to first deals
  • Influencers: identify potential influencers by market, understand their key drivers
  • Integrators: define strategy for internal consulting team (pure expertise or  Business Unit), outline principles for working with them

growth matrix

We all know the famous BCG growth share matrix, but in real life its use is often limited, if any. Yet going back to basics could have a strong impact on sales and prevent major revenue issues. How can we implement the matrix?

  • Matrix design: map all current and upcoming products
  • Identify product gaps to influence roadmap
  • Align sales compensation / resellers’ margins with product maturity
  • Action plan to adjust matrix (marketing plan to boost stars)

REPORTING & FORECAST

Being able to report properly on the sales performance (actuals or pipeline) of the team without having to wait several weeks to get the numbers from the finance team is crucial to proper sales management.

dashboards

Sales dashboards are used by management to make critical decisions. But are they still reliable? Often they are based on old processes no longer enforced and are at best questionable, if not totally wrong. Room for improvement.

  • Audit current reporting system to guarantee its end-to-end accuracy (CRM + any other system used for the reporting itself)
  • Fix issues found by updating and documenting the processes
  • Create the reporting dashboards (ideally within the CRM, but often current set-up is not appropriate making Excel a good workaround)
  • Train sales team and salesops to the new processes as great principles which is are not implemented are useless
  • Extend sales reporting to partners (resellers)
  • Align reporting for a new BU / company that has to be consolidated

pipeline

Having an accurate pipeline is key to reaching the target. Knowing ahead that some sales reps will miss their quota enables corrective actions. Weekly pipeline review should be implemented and maintained proactively.

  • Audit the CRM system to ensure it is consistently used by the team (not so common)
  • Remove old data from the CRM (past dues, unassigned…)
  • Make sure sales reps understand the importance of pipeline management and actually do it right (this normally means individual weekly follow-up / chasing)
  • Help refine both opportunity value and probability rate (by comparing with past values / changes over time with the stakeholders)
  • If not already the case, add pipeline to sales dashboards (using the CRM data)
  • Extend sales pipeline to partners (resellers)

forecast

Sales teams get confused as to why they have to provide a forecast as they already feed the CRM. For a large number of small deals a statistical model works well. For a smaller numbers of larger deals, a custom approach is required. 

  • Build a statistical forecast model if relevant (usually for SMBs)
  • Create a framework for the sales team to enter its forecast by deal (this is normally and extension of the sales reporting dashboard
  • Help the team understand what is expected
  • Run the forecast process (with the sales team) in the early stages to make sure it delivers as expected
  • Extend sales forecast to partners (resellers). This may not always be practical / reliable and therefore a statistical model may be better in some cases

review

A performance review should be carried out with each quota carrier, every year before the new budget. This will bring some context, to the raw quota achievement, which could otherwise lead to significant misjudgement.

  • Identify issues in current year quotas (potential of territory not aligned with quota, product issues that prevented selling, claims made by the sales rep…)
  • Prepare for the sales director / carry out individual performance reviews with the sales reps / managers (this is usually a pre-requisite to starting a new budget cycle)

win ratio

It is key metric to any Saas software vendor. Its definition is quite simple: (number of deals won) / (number of opportunities). Yet in real life few vendors can calculate accurately their win ratio as evil is in the details.

  • Review definition of win ratio items (Marketing contacts, Marketing Qualified Leads, Sales Qualified Leads…)
  • Strengthen process for transfer of leads from marketing to sales (sales reps tend to wait until the last moment to enter a lead into the CRM as an opportunity, as they know this will impact their win ratio)
  • Review full process once a lead has been qualified as opportunity by a sales rep (disqualified, abandoned by prospect, no-opportunity… can all be great ways to lose track of the win ratio)
  • Review pipeline to make sure opportunities do not remain open too long (not declaring an opportunity lost will alter the win ratio)
  • Establish the win ratio as a key performance indicator

sales funnel

The concept of the sales funnel is well known by most, yet it is not so common to have all the ratios that make it up. An overall conversion rate of 7% is standard for Saas vendors. Do you know your rate and how do you compare?

  • Clearly identify and track all sources (for instance referrals are often complex to track)
  • Align marketing and sales for the transfer of leads (sales often reject quickly MQL arguing there was no opportunity and it should not impact their win ratio), including in the IT systems (which are very often separated)

COMPENSATION PLANS

Compensation plans are instrumental in achieving the overall revenue target for the organization. A good plan will:

  • Motivate individuals to over-achieving their quota
  • Make sure compensation is linked to actual individual performance
  • Limit windfall effects (especially for the install base)
  • Guaranty the team will sell the right product mix
  • Act as a safety belt in case of economic downturn
  • Comply with local compensation rules to prevent any HR issue

quotas

Assigned to each member of the sales team, sales quotas are basically the translation at the individual level of the sales strategy for the year. In a nutshell: who should sell what into which territory and with what margin.

  • Create a starting point which is usually, for each individual, the current FY actuals updated with the global budget variation for the next FY.
  • Factor in multiple components such as:
    • Products to be launched / discontinued
    • Price changes
    • Market share changes at product level
    • Territory / named account changes
  • Manage top/down and bottom up process (to align overall budget with individual quotas and get the sales reps to sign=off their new sales quotas

bonus

One can be very creative when it comes to bonus schemes. From experience, the most effective ones tend to be the easiest for everyone to understand. When the rules are understood by all it unleashes the individual potential.

  • Improve / audit existing bonus schemes
  • Create bonus schemes from scratch (capped / uncapped, linear / accelerated,
  • Capture required info in CRM / other system to provide payroll data
  • Create application to calculate automatically calculate individual bonus based on sales / bookings figures (from CRM or other system)
  • Provide audit trail to both employees and HR / Finance
  • Create simulation model based on planned individual / team performance

territory

There are so many ways a territory can be split between team members (geography, industry, account size, named accounts…) that I could not list them all. But in the end what really matters is that no revenue potential is left out.

  • Global territory mapping (full addressable market, no-go zones)
  • Performance analysis for current territories (actual sales vs potential of territory)
  • Territory re-allocation within the team (and sales compensation consequences)
  • Accounts transfer from direct to channel
  • Identification of sleeping territories / root cause analysis

channel

The channel sales team is a sales team, but in many cases simply transposing the rules defined for the direct sales team will not work well. They will require specific rules in order to take into account their own reality.

  • Identify compensation rules that require adjustment for channel sales team.
  • Define whether double booking with direct sales team should apply (can be the case when setting up channel)

BUDGET & CAPACITY

At least once a year the budget must be revised based on new market realities and requirements from the shareholders. The new budget will trigger new hires, updated compensation plans and top priorities for the next year.

analysis

Prior to any updating the budgets, one must know the actuals from the current year. It sounds simple but is often more challenging in reality, especially since the budget process starts before the results of the year are known.

  • Audit current year actuals to make sure they do reflect the reality
  • Forecast full current year landing (budget typically starts in the last 3 months of the current year, therefore one need to forecast what the missing months will be). This can be based both on statistical approach and a thorough review of the weighted pipeline
  • Build a model to update forecast with actual numbers as they become available throughout the build-up process
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modeling

It’s all about creating what-if scenarios: many assumptions need to be incorporated into a model that will be used to determine how to reach the team target and translate it into individual quotas and the product mix.

  • Gather business requirements from the different stakeholders (sales, finance…)
  • Build complex models using Excel or any Financial Planning and Analysis solution that is used internally
  • Include management buffers to cope with negative events (departures, late arrivals…)
  • Obtain buy-in of the models by the stakeholders (explain / modify / involve)
  • Propose an initial iteration of the model that allows to achieve the global quota
  • Run the models until final budget has been built
  • Freeze final version and distribute budgets to each individual

budget process

Most companies use a combination of top-down & bottom-up approach to build their budget. Targets comes from the CEO / shareholders to the field. A discussion then takes place to reach a final version validated by all.

  • Creation of formal upsell map (product dependencies / natural upsell opportunities)
  • Calculation of total upsell potential for entire installed base
  • Action plan to work on upsell opportunities:
    • Mass marketing campaign for solutions with short sales cycle / low unitary value
    • Targeted actions for higher individual potential opportunities
  • Get buy-in from middle management
  • Training of teams (marketing and sales) for upsell campaigns

sales capacity

The goal is to a build a strategic financial planning model that helps you predict your company’s ability to generate new revenue based on sales resources you have and their related productivity. It will render your business more resilient.

  • Gather historical data: quota attainment rates, average ramp-up time by job / territory, attrition rate, hire time…
  • Build the model and identify the underlying assumptions (many companies have a budget with individual quotas, but not often a formal model for sales capacity)
  • Suggest standard practices (normal ramp-up for new-comers, recruitment delay, attrition…)
  • Run the model to create multiple scenarios for what-if analysis: do we want to add resources, are we confident with the proposed budget…)
  • Update and run the model during the course of the year to adjust to new realities (a typical example is when actuals are below target, we want to know if adding more resources will help)
  • Extend the model to include marketing, BDRs and CSMs. Before adding new resources, one should make sure no bottleneck will obstruct the effort.

WHEN

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