Monday, 4 February 2013

How Revenue Performance Management (RPM) helps clients grow revenue

More and more companies are becoming troubled by their inability to drive consistent, predictable and sustainable revenue.  Up until the 2008 CEO’s wanted double-digit revenue growth.  During the financial crisis most were happy if they were able to simply hold the line, or at least not go backwards to quickly.  Now the quest is on again for that sustainable top line growth which has eluded so many for so long.  Regardless of whether their stance is offensive or defensive, the underlying challenges for CEO’s remain consistency, predictability and sustainability.

The first step is to understand the reasons why an organization’s revenue performance is no longer what it was, or what they would like or expect it to be.  Producing revenue isn’t a simple thing to do – not sustainably.  In the Business-To-Business (“B2B”) space, sales generally mark the end of a lengthy, complicated and highly interdependent chain of events which started with a strategic decision to focus on a particular market segment and culminated many months or even years later with a customer paying money in return for a product or service.  All the things that have to happen in between the beginning and the end or that process constitute one of the most important, and yet least understood and poorly managed business processes in companies today.

 Because that end-to-end process is so poorly understood, even by those managers directly responsible for it, when it stops working and sales slow very few people actually know why.  Some companies perform manifestly better than others – even through financial crises.  Even now, some are doing well in industries where their competitors are struggling or even going backwards.  So there’s clearly more to it than just the state of the economy or industry conditions.

Not knowing why something has stopped working as it should makes the CEO’s task of applying the right “fix” pretty difficult.  When many CEO’s and their Sales Directors find their revenues slowing or stopping, they don’t know why and they therefore don’t know what they should do to remedy the situation.  The old “tricks” that used to work when times were good – like buying another company, investing in a new CRM system, training or replacing the sales force, hiring a new Director of Sales or re-branding the company – don’t seem to work anymore.  To fix what’s broken now they have to stop guessing what might be wrong and understand which pieces of the process are broken and fix them.

And that’s what RPM does.  Analyse and fix broken revenue processes.

Baker Tilly UK has recently launched the Revenue Performance Management group (RPM).  Formed to help organisations manage their revenue (sales) risks and grow their top lines consistently and profitably.

In the seven years since it was launched in Australia, the Revenue Performance Management (“RPM”) Group has helped more than 70 organisations across a diverse range of industries including manufacturing, telecommunications, information technology, professional services, health care, media and entertainment improve their top line performance by an average of 23%.  .

The philosophy behind our RPM model is that successful and sustainable revenue generation needs to be a function of rigorous, consistent, repeatable and measureable business processes; business processes which are synchronised with the buying journey of the customer.

Our RPM team provides a range of diagnostic, planning and execution tools and services to help organisations understand why they aren't selling as much as they would like to, address immediate problems in their revenue creation processes, and transform those processes into sustainable, high-performance revenue-generating engines.

Friday, 11 January 2013

Marketing and Sales – The Black Holes of Business

Marketing and Sales – The Black Holes of Business
“My Sales & Marketing feels like a Black Hole – money goes in, but not enough revenue comes back out….”

In 1916 after Albert Einstein published his theories on relativity and gravity, the German astronomer and physicist Karl Schwarzschild identified a mysterious perimeter that surrounds Black Holes in space. 

Schwarzschild’s Radius, as this phenomenon is known, has such a tremendous gravitational force that it warps the space-time continuum, devouring all matter, light and energy around it into an infinitely dense singularity – never to be seen or heard of again!

For the last decade, many CEOs have been observing the similarities between Black Hole singularities and the forces that seem to be swallowing the efforts of their sales and marketing team – never to be seen or heard of again!

For example - while you are reading this - all around the world more than half of all salespeople are failing to make their quotas.
  • Three quarters of new products or services launches are failing to meet revenue and profit expectations
  • Ninety percent of sales opportunities aren’t closing according to forecast; and of that 90 percent, three quarters are going to be more than three months late

How can this be?
Millions upon millions of pounds are being poured into technology and training-based improvement programs - with 75% failing to produce any meaningful results (or any results at all!)

Notwithstanding staff attrition and redeployment, one would reasonably have expected that sales organisations employing one or all of these approaches would by now have solved their revenue performance issues. And they’d be sitting back watching their sales go through the roof.

They did not and they are not. 
CEO’s and their Sales Directors still struggle with most of the same sales performance issues as their predecessors faced ten years ago.

Sales solution vendors continually release new, more complex, versions of their previous products.

Sales Directors who no longer see measurable value in their sales training and technology budgets, delegate sales development to marketing, Learning & Development or even IT departments. 

Typically viewed as cost centers’, these areas seldom have the experience, power or budget to provide more than a patchwork of knee-jerk options that are largely disconnected from revenue impact. 

Jaded salespeople unsurprisingly view each new tool or technique as the “flavour-of-the-month” fad to be serially ignored. 

And when people inevitably move on, leaving no custodian or long-term plan for systematic change, the cycle begins anew.

Well here’s the universe-changing secret…
For the last decade, the conventional solutions pedaled by consultants and vendors to fix revenue performance, have focused on personal skills training, manager coaching and technology installations – each depending upon application by the individual for success.
Leaving most Boards and CEOs thinking these systemic, crippling problems can only be solved by shooting another Sales Director, replacing and/or retraining the sales force or purchasing a new CRM system.
Yet revenue performance is stuck in a black hole because sales and marketing issues continue to be tackled discretely within separate silos - rather than organisationally. This is the powerful gravitational force holding back many.

Until revenue performance processes are aligned to and inseparable from the total business strategy, marketing & sales - and the vital revenue they are responsible for - will continue to spiral downwards into Black Holes.



Tuesday, 8 January 2013

Growth returns to the Board agenda

As the economy tries to recover, finance and operational teams within Mid-Market companies are relinquishing their collective grip on the reins and growth is firmly back on the agenda.

Two surveys released a number of months ago by a major bank and one of the big 4 accounting firms both confirm that growing revenue and finding enough of the right people to do that are firmly back at the top of strategic priorities for Boards and their CEO’s.

Growth may be back but selling has never been more difficult

It has never, ever been more difficult to sell. Whether you’re selling state-owned utilities, sophisticated technology solutions or the simplest widgets, the cards have never been so heavily stacked against the sales force. And like it or not, that situation is unlikely to change any time soon.
Consider the following statistics gathered by our group from interviews with CEO’s and Sales Directors:
  • 42% of sales people fail to make their quotas;
  • 88% of sales opportunities fail to close as forecasted;
  • 68% of sales leads are never followed up by the sales team; and
  • 74% of solution selling initiatives and 77% of new product launches “misfire” and fail to achieve their revenue and/or margin objectives.
These numbers have significant implications for Boards and CEO’s currently calling out double digit targets for revenue growth over the next 3-5 years.

Old thinking can’t solve new problems

Albert Einstein once famously said, 'We can't solve problems by using the same kind of thinking we used when we created them.'

For the last forty years, the tonic of choice for the ailing company top line has been more training for the sales force. As often as not, this has been accompanied by the departure of the previous sales manager and a few sales reps and the arrival of shiny new ones – with the cycle often repeating itself every few years.

Since the late 1990’s Customer Relationship Management (“CRM”) systems have challenged sales training as the panacea for the problem of how to grow revenues. Global vendors including the likes of Siebel, SAP, Oracle and have come to market with ever more advanced technology offers promising the Holy Grail – consistent top line growth.

During the mid to late 2000’s global spending on CRM and sales training exceeded $200 billion and $150 billion respectively. During this time the combined global corporate spend on CRM and sales training grew by more than 10% per annum.

With that level of investment being thrown at a problem, one would have expected it to be well and truly licked by now. Well – it isn’t. In that same period the average conversion rate of business sales pipelines fell by nearly 100% to be just under 3%. For every 100 selling opportunities that began their journey as “leads” fewer than three resulted in closed sales and new customers.
And yet as their companies emerge from the Financial Crisis and prepare for growth, many CEO’s and Sales Directors are still turning back to training and technology “silver bullets” unaware that the world has moved on and the challenges they face in growing their top lines in the 21st century, are beyond the scope of one-dimensional 20th century solutions.

Marketing and Sales: “Process free zones!”

If only three out every 100 sales opportunities succeed, that means 97% fail. Any CEO worth their salt discovering a key business process operating at an error rate of 97% would surely be all over the problem personally - and with a big microscope! Particularly when it’s the business process charged with producing the company’s oxygen supply!

And yet precisely the opposite is happening. The broken sales process remains fundamentally broken as evidenced by the anaemic 3% pipeline conversion rates. Frustrated and unable to figure out a meaningful solution, they continue to throw bodies, training and technology at a problem even though recent history has shown us that these tired, linear solutions do not and will not work anymore.

Business process and performance measurement

The answers to the revenue performance dilemma have actually been readily apparent for some time. And they’ve been applied successfully to every other aspect of business for decades.
For success in anything to be sustainable it must be repeatable. And for anything to be repeatable there must be a process.

What are you doing to embed a process that will enable you to drive double digit growth over the mid-term that is any different to the past?