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16 min read

How CEOs Grow Revenue, Holistically

Mar 18, 2020 1:41:49 PM

Many CEOs are under pressure to increase revenue, but knowing where to focus your revenue generation efforts can be a challenge. While your instincts may be telling you to focus on one specific problem area, companies often benefit from better long-term results when revenue growth is approached holistically. Approaching revenue growth holistically means focusing on efficient and profitable revenue growth across marketing, sales, and customer success, all focus points of the term, revenue operations.

Below, I’ve outlined the steps any CEO can take to drive more profitable, efficient, and consistent revenue growth by auditing and improving revenue operations holistically. This will only work if you’re willing to commit at least three to six months of time revolutionizing the entire process.

(Note that I’ve created this guide to serve as a plug-and-play overview, so if you’re looking for a more customized solution or don’t feel prepared to tackle all of these steps alone, let’s talk.)

 

Infrastructure

Without the right foundation, systems, and processes, it becomes impossible to scale successfully. To build efficient infrastructure, you’ll need to audit what you currently have in place to identify your gaps. First, map out your customer journey, keeping in mind that the sales team is not the customer’s first touchpoint. Identify when and how the customer moves through the funnel, from marketing to sales, to customer success. A holistic approach to revenue growth requires participation and efficiency beyond just the sales department.

 

The Audit

To make your life a little easier, my team created a free download that functions as a cheat sheet to help you through your audit.

You’ll be auditing your customer journey, tech stack, team roles and responsibilities, workload, productivity, effectiveness, and results. Ultimately, by the end of your audit, you should be able to answer the following questions in these key areas:

1. Personas: Do you know who your ideal customer is? Have you built a persona? Are your marketing messages speaking your customer’s language? Do you understand the problems you solve for them and why they would buy from you over your competitors?

2. Customer Journey: How does your customer journey match your current team structure, individual roles, and desired revenue goals? How does your customer journey vary by market segment, size, or industry?

3. Tools: What tools do you have in place to track key metrics? This includes:

  • Quality traffic to your website
  • Engagement with your brand
  • Conversions to MQLs
  • MQL conversion to SQLs
  • Sales activity metrics for inbound conversions and outbound prospecting
  • Sales effectiveness and progression through the funnel
  • Most profitable lead sources
    • Quantity of leads
    • Quality of leads
    • Length of time to close
    • Close rate
    • The average revenue per sale

4. Sales Methodology: Do you have a congruent sales approach that each salesperson is trained to follow?

5. Demo Scoring: How do you grade the performance of the salesperson, sales engineer, and the presentation materials, like your slide deck or demo technology, during the demo step?

6. Closing: How do you follow through and close business?

7. Implementation: Is your implementation process smooth for your sales team, operations team, and the client, or is it clunky and confusing?

8. Ongoing Support & Selling: How are your clients supported after implementation? Who owns the relationship? What’s the playbook for maintaining the relationship, upselling, cross-selling, renewing the business, and soliciting referrals?

9. Sales Enablement: What CRM and other sales enablement technologies are you using? How well-utilized are they by each team member? Where is there under-utilization, and why? Where is there overlap, lack of integration, or room for improvement? What steps of the revenue process are not automated, and why not? Which technologies might be needed for automation and increased productivity?

10. Compensation: Does your compensation model incentivize quality of work and results across marketing, sales, and customer success, or is the sales department the sole recipient of performance-based compensation?

 

Gap Analysis

Once you’ve completed your audit, you’ll begin to see the gaps between your current state and the future state that you want to achieve for improved performance. To ensure revenue generation is efficient and profitable, it’s best to designate someone on your team to own revenue. Typically, this person is called a Chief Revenue Officer (CRO) or a VP or Director of RevOps (Revenue Operations).

Segment your gap analysis in 3 areas:

  1. The technology infrastructure that supports revenue generation, from marketing through the end of the customer lifecycle.

  2. Process and methodology from beginning to end for marketing, sales, and customer success departments, segmented by role.

  3. A recruiting roadmap to fill talent deficits, referring to both open positions and a talent development strategy for existing roles, knowing some people may need to be replaced.

Delegate each section of the gap to the team member who will develop the strategy, and to the team member who will implement it. Because these tasks require different skill sets, the person who develops the strategy is, ideally, a different person than the one who implements or executes the strategy.

 

Revenue Playbook

After the above strategies have been laid out and agreed upon, get them down on paper. This is the beginning of your company-specific, single-source-of-truth document, which I call the Revenue Playbook. Maintaining a Revenue Playbook allows your marketing, sales, and customer success departments to have an aligned approach to revenue growth, and ensures everyone knows how their efforts contribute to the bottom line. Alignment on the Revenue Playbook is the first step in moving toward a profitable, rather than expensive, revenue operation.

 

Implementation

So you’ve completed your gap analysis, delegated tasks, and developed the new strategies? Congratulations - you’re ready to start implementing! Begin with foundational items, like changes to the technology stack and training employees on the new Revenue Playbook.

Your Sales Operations lead should implement the changes to the tech stack, create an SOP for all technologies with screenshots and usage guidelines, and train all team members on proper usage. Management will be responsible for enforcing proper tech stack usage, referring back to the SOP and Revenue Playbook as a guideline.

Your Head of Marketing should implement the new processes while setting the tone for the marketing mindset. It’s your Marketing leader’s responsibility to ensure that each member of the marketing department feels personally responsible for generating revenue and driving quality leads for the sales department. Consider implementing a compensation model that aligns marketing compensation to the department’s quality of work and contribution to revenue growth.

Your Head of Sales will be responsible for benchmarking the existing sales team’s talent and results by reviewing historical trends and performance. This should include a review of each team member’s skills, output, and measured performance both on leading indicators (sales activity) and lagging indicators (sales results). They’ll also need to develop individual learning and development plans for each salesperson. (Trust me, salespeople don’t want their time wasted sitting in a training session for something they already do extremely well, solely for the benefit of one or two of their teammates.)

Lastly, your Head of Customer Success will need to benchmark each team member’s performance in customer communication, time management, day-to-day organization, revenue upsell attainment, revenue retention, and customer renewals. They should create individual learning and development plans for each team member, as these roles require effective communication, questioning, negotiation, and sales skills.

 

Talent Development

Each department head, as part of the gap analysis, should define the ideal team member’s performance requirements and key skills for each role. Then, each department head should use those as a benchmark evaluation for each team member. Consider tenure and prior experience in your benchmarks as you begin to write recommendations for improvement. These evaluations will show your talent gaps and areas for improvement.

Once talent gaps are identified, develop a 12-24-36 month financial snapshot of your revenue department (combining marketing, sales, and customer success) to truly understand the economics of growing revenue for your company by increasing productivity per team member and increasing headcount. Incorporate these metrics into your 12-24-36 month financial plan, which will help determine when to increase headcount, what kind of new hire ramp to take into consideration, and how quickly you can be profitable with each new hire. Your financial snapshot should include:

1. Team member compensation and overhead

  • Base salary

  • Variable compensation

  • Productivity ramp

  • Additional overhead

  • Attrition

2. On-target monthly and annual revenue or activity metrics and conversion rates

3. Monthly churn rate

4. Gross margin

5. Cost of leads and sales

  • The average revenue per sale

  • Number of new customers needed to meet monthly or annual targets

  • Leads-to-closed ratio

  • Cost per qualified lead

6. Customer acquisition costs

  • All-in lead gen cost per new customer

  • All-in sales costs per new customer

  • Total CAC

  • Total LTV

7. Revenue retention costs

  • All-in YoY costs to retain a customer

    - Customer success overhead

    - Marketing overhead

    - Renewal and attrition rates

  • All-in costs to upsell a customer

    - Customer success overhead

    - Marketing overhead

Once you have a deep understanding of the economics of your revenue department and you’ve benchmarked your current talent, you’ll have a clear roadmap for recruiting.

To see an example of this spreadsheet, please contact us directly.

We recommend placing under-performers on a 30-day Performance Improvement Plan (PIP) and coaching them up or out, as a 30-day timeline aligns with the average time required to recruit new talent.

Don’t be afraid to replace non-performers quickly, once they’ve been given a chance to improve and have demonstrated their inability to perform (after a 30-day PIP). Act quickly, and terminate them with integrity and professionalism. Don’t feel obligated to offer large payouts, severances, or go out of your way to accommodate non-performers to protect your conscience. Instead, consider taking that same time, energy, and money and giving it to your team members who are performing well.

 

Recruiting

Finding the right talent is critical for success, but with record-low unemployment, immediate access to digital information, and a generational shift taking place in the workforce, recruiting is more difficult than ever. To help businesses combat recruiting challenges, we developed a proprietary recruiting methodology called RPAC. RPAC is modeled on seeking candidates who align with the company in four areas:

  1. Role Match

  2. Proven Prior Achievement

  3. Acumen

  4. Culture Fit

We always recommend sourcing directly for sales roles. Typically, unemployed salespeople, or salespeople who are proactively “looking” for a new role, are not top-tier performers or have a history of changing sales roles frequently, sometimes less than every 1-2 years. They’ll tell you a different story, but we feel qualified to make this recommendation after interviewing over 2,000 salespeople and sales leaders over the past 2 years. You can use the same caution with marketing and customer success roles, but we have found success when placing marketing and customer success candidates who were actively seeking a new position.

Develop a series of interview questions in each of the RPAC quadrants, and supplement the questions with an assessment or other pre-hire analysis tools. With so many to choose from, it’s best to test each assessment on your internal team members. Find the assessment that aligns well with the attributes of your existing team, and use that as your recruiting assessment.

If you’d like to see an example list of questions in each RPAC quadrant, please contact us directly.

 

Ongoing Execution

Create a high-performing culture by building consistent practices around the following:

  • Proactive communication and reporting, with transparency into both leading and lagging indicators.

  • Professional and consistent coaching conversations.

  • Training opportunities to address deficits in performance before they become a problem.

  • Accountability from each team member to mastering the behaviors and execution required of their role.

  • Creating buy-in from your team members to ensure they are aligned with the company’s mission, vision, and values.

  • Clear career development conversations so you can invest in your talent and retain team members while avoiding expensive turnover costs.

Cheers to growing your revenue!

 

Ready to Bust Through ThE REVENUE ROADBLOCKS IN YOUR BUSINESS?

Visit our guide for CEO's looking to scale their revenue: The Master Guide to Busting Revenue Roadblocks

 

MEET MARY GROTHE, THE CEO OF HOUSE OF REVENUE

Mary Grothe is a former #1 MidMarket B2B Sales Rep who after selling millions and breaking multiple records, formed House of Revenue™, a Denver-based firm of fractional Revenue Leaders who currently lead the marketing, sales, customer success, and RevOps departments for 10 companies nationwide. In the past year, they've helped multiple 2nd stage growth companies between $5M - $20M, on average, double their MRR within 10 months, resulting in an average ROI of 1,454% and an average annual revenue growth eclipsing $3.2 million.

Mary Grothe, CEO of House of Revenue™

Follow me on LinkedIn  and Twitter @MaryLGrothe

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Mary Grothe

Written by Mary Grothe

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