Congratulations! You’re running a business! It’s a lot to think about, isn’t it? Let’s talk about one thing that’s probably on your mind - the health of your business. In other words - how’s your business running?
So – how would you determine the health of your business? Remember, your future is at stake and your employees are counting on you! Would you use guesses, feelings, emotions or subjective opinions? NO! If you underestimate the cost of the production of a widget, then go on to make thousands of widgets, you’re not going to be happy with your profit and loss statement at the end of the quarter!
Clearly, as a business owner, you don’t gauge your financial health using hunches, feelings or estimates. So – why are sales and marketing efforts notorious for just this?
How many times have you heard vague but well-meaning statements like these in your sales or marketing meetings?
- I think the project will close within the next month.
- I had a great meeting with Joe the other day and he is really excited about our proposal. He may be going with us.
- At the trade show, there will be thousands of prospects coming through the aisles - all we have to do is land one or two and we will get a good return on our investment.
It’s pretty hard to forecast cash flow against answers such as these, wouldn’t you say?
Why do business people tend to make sales and marketing decisions using hunches and feelings, when we would never make an equipment purchase, personnel hire or infrastructure investment the same way?
Let’s end this practice now!
I’m here to tell you that you can measure your sales and marketing efforts in much the same way as the other aspects of your business. This enables you to determine, for every dollar poured into the marketing and sales funnel, how much you’ll get out of the other end. It’s called Revenue Performance Management.
Does this sound valuable?
The goal at the end of the day is to create a cycle that you can use to measure and predict revenue based on real data. Fair warning – it’s not easy! However, if you make the effort, you can streamline your sales and marketing efforts with one goal in mind – revenue!
This process, also known as the revenue cycle, can be broken down into 9 steps.
1. Find leads or get found by prospects: The market has changed and it’s time to get used to the fact that the buyer is in control. Get creative!
2. Capture leads: Clean, manageable and actionable sales lead data is critical to your success. If your new prospect is not captured, tracked and nurtured, they will quickly fall into the “Lost Opportunity” bucket.
3. Track: Following a sales opportunity in an organized, clearly-defined manner will streamline your sales process and will help you isolate true opportunities. How often has someone in your salesforce been pulled in by the allure of the most dangerous sales drug in the marketplace, “Hope-ium?”
4. Acquire: The hardest thing to do is “get the contract” and convert the opportunity to an actual sale. We all want customers and the close is the most important part of the process!
5. Onboard: Your prospect is now a customer! Ensure a smooth, efficient and seamless delivery of your product or service and keep a customer for life.
6. Measure: Throughout the process, measurement is critical. If you cannot accurately measure how many revenue dollars you generate for every business development dollar (i.e., sales and marketing) you spend, you will never understand how to target and retain your best customers.
7. Optimize: Once you begin to better understand your process, you can make it more efficient.
8. Repeat: Obviously, once you have optimized, you will now want to repeat those best practices (and always remember to measure along the way)!
9. Scale: Scaling your business is where true growth begins. Once you are bringing those profitable dollars into your business in a measureable and process-driven fashion, it’s time to scale and start the 9 Steps all over again!
Download our free ebook and watch for more blogs in this series! We’ll break down each of the 9 steps and provide insights and concepts that will help you in justifying your business development efforts. Stay tuned!