{"id":7983,"date":"2008-10-10T16:54:46","date_gmt":"2008-10-10T16:54:46","guid":{"rendered":"http:\/\/www.matthew-j-smith.com\/?p=7983"},"modified":"2014-10-06T01:34:55","modified_gmt":"2014-10-06T01:34:55","slug":"the-revenue-clock-is-always-ticking","status":"publish","type":"post","link":"https:\/\/www.matthew-j-smith.com\/?p=7983","title":{"rendered":"The Revenue Clock Is Always Ticking"},"content":{"rendered":"

Three Approaches to Improving Strategic Sales Planning<\/strong><\/p>\n

    \n
  1. Defining Goals and Base Revenue<\/strong><\/li>\n<\/ol>\n

    Outsourcing sales goals are typically stated in either revenue or margin dollars and are generally defined by quarter.\u00a0\u00a0Establish that number and make sure all the elements that go into the overall goal are defined, such as targets by geography, product line, customer segment, or business unit.\u00a0 \u00a0Next, a key question for outsourcing sales leaders:\u00a0 How much existing revenue can I count on for next year?\u00a0\u00a0 Call that numberBase Revenue<\/em>. \u00a0Base Revenue is made up of two categories: growing accounts that should generate incremental revenue next year, call that Base Growth; <\/em>and some accounts that may shrink or decline, call that Base Erosion<\/em>. The sales leader\u2019s objective is to maximize Base Growth<\/em> and minimize Base<\/em>Erosion.\u00a0<\/em>Classifying existing revenue streams into this simple formula is one starting point for 2009 strategic sales planning.\u00a0\u00a0 Outsourcing sales cycles are long, so maximizing the base is essential to success.<\/p>\n

      \n
    1. Customer and Prospect Segmentation for Outsourcers<\/strong><\/li>\n<\/ol>\n

      The next area of focus is building a more specific segmentation model for customers and prospects. \u00a0One approach is categorizing customer types into four quadrants (suggestions below) based on key success predictors like revenue forecasts, pipeline values, margin potential, alignment to portfolio, level of required sales effort, promptness in payments, etc.\u00a0 Looking at customer categories instead of individual accounts will begin suggesting defined strategies for each unique group.\u00a0\u00a0 (After completing this analysis, do not be surprised to find your sales teams are spending too much effort on lower ranked relationships in weaker categories and not enough time developing the potential big hitters).<\/p>\n\n\n\n\n\n\n
      Invest<\/strong><\/td>\nHigh growth potential<\/em><\/strong>, strong alignment with current or planned capabilities, positioned in target market(s), low or acceptable rating on negative criteria.<\/td>\n<\/tr>\n
      Harvest<\/strong><\/td>\nStrong contributor to current revenue and margin,<\/em><\/strong> reasonable growth potential; acceptable rating on negative criteria.<\/td>\n<\/tr>\n
      Maintain<\/strong><\/td>\nReasonable revenue contribution<\/em><\/strong>, average or flat growth potential and acceptable rating on negative criteria.<\/td>\n<\/tr>\n
      Divest<\/strong><\/td>\nLow, flat or negative growth potential<\/em><\/strong>, little contribution to total revenues, and high rating on negative criteria.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n
        \n
      1. Sales Organization Analysis<\/strong><\/li>\n<\/ol>\n

        With financial objectives defined and segment level strategies underway, it\u2019s time to assess the selling organization itself and determine where (not if) changes are necessary.\u00a0 This exercise can be extremely difficult for many companies but is critical to ensuring the new sales plan has the best chance for success.\u00a0When evaluating sales executives it is standard to look at past performance as the most important gauge.\u00a0But historical success does not always guarantee future results, particularly for outsourcers in markets where a great deal of change is occurring.\u00a0 An excellent approach to going beyond pure financial performance in sales representative evaluations is based on GE\u2019s Vitality Curve[1]<\/a>.<\/p>\n

        This well documented model classifies an organization\u2019s workforce into three categories and suggests approaches for each group.<\/p>\n

        GE Vitality Curve (click here \u2013 read more)<\/strong><\/a><\/p>\n\n\n\n\n\n
        \n

        A\u2019S \u2013 THE TOP 20 %<\/strong><\/h1>\n<\/td>\n

        		\n

        Filled with passion.<\/h2>\n

        Committed to making things happen.<\/p>\n

        Open to ideas from anywhere.<\/p>\n

        Have the ability to energize not only themselves, but everyone who comes in contact with them.<\/p>\n

        Make business productive and fun at the same time.<\/td>\n<\/tr>\n

        \n

        B\u2019S \u2013 THE VITAL 70 %<\/strong><\/h1>\n<\/td>\n

        		Possess GE\u2019s Four E\u2019s \u2013 but not yet showing the passion.<\/p>\n

        They are the heart of the company and critical to its operational success.<\/p>\n

        Devote energy to improving B\u2019s \u2013 Get them searching every day for what they\u2019re missing to become A\u2019s.<\/td>\n<\/tr>\n

        \n

        C\u2019S \u2013 THE BOTTOM 10%<\/strong><\/h1>\n<\/td>\n

        		Someone who can\u2019t get the job done.<\/p>\n

        Likely to enervate rather than energize the organization<\/p>\n

        Procrastinate rather than deliver.<\/p>\n

        Don\u2019t waste time on them.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

        Moving Forward<\/strong><\/p>\n

        Successful selling of outsourcing solutions requires many competencies, operational execution and discipline, and competitive offerings.\u00a0 \u00a0Knowing where best to assign sales resources is also a major contributor to success and is something that requires a thorough understanding of goals and targets, customer needs, competition, market trends and internal capabilities.<\/p>\n

        Incorporating the three planning elements suggested here into your strategic sales planning process greatly increases opportunities for success and helps establish a foundation for many other strategic planning activities.<\/p>\n

        [1]<\/a> Jack: Straight From The Gut<\/strong>, by Jack Welch<\/a> with John A. Byrne<\/a>, Grand Central Publishing<\/p>\n","protected":false},"excerpt":{"rendered":"

        Three Approaches to Improving Strategic Sales Planning Defining Goals and Base Revenue Outsourcing sales goals are typically stated in either […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[36],"tags":[],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.matthew-j-smith.com\/index.php?rest_route=\/wp\/v2\/posts\/7983"}],"collection":[{"href":"https:\/\/www.matthew-j-smith.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.matthew-j-smith.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.matthew-j-smith.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.matthew-j-smith.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=7983"}],"version-history":[{"count":2,"href":"https:\/\/www.matthew-j-smith.com\/index.php?rest_route=\/wp\/v2\/posts\/7983\/revisions"}],"predecessor-version":[{"id":8181,"href":"https:\/\/www.matthew-j-smith.com\/index.php?rest_route=\/wp\/v2\/posts\/7983\/revisions\/8181"}],"wp:attachment":[{"href":"https:\/\/www.matthew-j-smith.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=7983"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.matthew-j-smith.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=7983"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.matthew-j-smith.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=7983"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}