In the last installment of this series, we talked about the importance of metrics and analyzing data in the Revenue Performance Management (RPM) process. The next step is optimizing the cycle so the leads and the sales keep flowing.
When we optimize something we study the current situation and look for places to streamline, cut wasted effort, and double-down on what’s working well. This logically follows the step we covered in our last blog – measurement and data analysis. Now that we have the numbers (e.g. closing rate, conversion rate, deals per rep), we can see where we fall short and make improvements.
While it sounds straightforward, it often isn’t. Companies face common challenges (or maybe excuses?) when trying to optimize their RPM cycle. Do any of these phrases ring a bell?
1. We already optimized our RPM cycle
Optimization is all about finding parts of your process that are underperforming (or could be improved with a little attention). But the marketplace and buying behavior change, so optimization can’t be a one-time activity. For example, the pitch that worked for the sales team last spring might not be as effective now. Aim for an ongoing process of review and refinement each month or quarter.
If your overall conversion rates go from 2.5 percent to 2.75 percent (a 10 percent increase), pat yourself on the back but don’t get complacent! What other ideas could you test to make that a 40 percent increase? If you get to the point where each person who interacts with your company turns into a customer, you’re free to stop optimizing (but only until that trend changes)!
2. We don’t have time to optimize
Before assuming there is no time to optimize your RPM cycle, consider how you currently spend your time. If you’re solely focused on increasing your number of leads, try channeling some of that time to making the most of the leads you already have (i.e. optimizing). By looking for underutilized sources or missed opportunities, you could increase revenue much more quickly.
Start small: take 10 minutes each morning to look at your numbers (e.g. site visits, leads, sales, conversion rates, sources). Does anything seem off? For example, do you feel like you could turn more website visitors into leads? Funnel some energy into that website in the form of new relevant content or SEO analysis. Over time you’ll develop a sense of what to watch for and this daily analysis will become routine.
3. We already know what works and what doesn’t from experience
Experience is valuable, but it can be a trap. If you know that two percent of leads historically turn into clients, you may be suffering from the curse of knowledge. If you’ve always had a 2 percent conversion rate (even across multiple products and companies), this doesn’t mean that 2 percent is your maximum conversion rate. Keep reaching!
Challenge what you already know. What can you test that might change a number you’ve accepted as fact for months or years? Maybe a new webinar, or offering a no-obligation consultation, or developing targeted online content? This is something to think about during your daily 10-minute optimizing sessions, but also something to brainstorm with others. Challenging each other to think outside the box is a great way to fight inertia.
4. One source is knocking it out of the park, so we’re good for now
You may have one source that is carrying the bulk of your lead generation. Although it’s great to have that killer source, this should raise a red flag. Relying too heavily on a single source of leads, a single customer, or a single market segment leaves little to work with if it goes away (and we’re living in a time where even long-standing business norms are changing).
What can you optimize to make other sources perform like the rock star source? Are there opportunities to add new sources that may perform like the best one? Can you cut out sources that take time but don’t produce? For example, look at the metrics you’re gathering with your CRM and marketing automation tools for areas to diversify your sources. Or, do some competitive research for business intelligence to see where others in your industry are successful.
If any of these scenarios sound familiar, you still have room for improvement. It’s time to optimize! Click here to learn more about this seventh step of your revenue performance management cycle! Our last blog in this series will cover how to effectively repeat your success.
Editor’s note: This blog was originally published in 2014. It has been updated for accuracy and comprehensiveness.