4 Ways Marketing and Sales Teams Can Hit Their Revenue Targets

Hit & Exceed Revenue Targets

It’s a new year and that means the reset button for “revenue planning” has been hit by many sales and marketing teams. If you’re in that camp, I have two questions for you:

1. Do your goals for 2018 make you feel like a passenger getting ready to board a plane that will slowly elevate your new revenue goals?

2. Or, do your new revenue goals feel like your plane has been traded in for a rocket – and that a rocket is what you’ll need to achieve your goals. If you aren’t Elon Musk, access to a rocket is hard to come by.

Hitting (or even accelerating) your revenue goals is always the looming challenge for those responsible for revenue growth. And that challenge is not just for sales and marketers anymore. Companies are continuing to create titles, such as Chief Revenue Officer.

As we step into the new year, regardless of your role and how you feel about your existing revenue plan, this article can help you focus on ensuring that you hit—and even accelerate past them.

If you are thinking,“Wait, we are still finalizing our revenue plan.” This article can also help shape that plan and make it more attainable and transparent using your own data.

1. Know these 3 KPIs – always

When working with my team on revenue planning, we look back to plan forward. Just as a pilot uses a control panel to navigate, we use data to plot our path and monitor conditions toward revenue.

There are three key factors that ultimately create a flight plan for revenue. The speed at which leads progress through your funnel (velocity) at a stage-by-stage conversion rate multiplied by a given average sale price. I recommend breaking these elements apart in order to monitor them in isolation and work on optimizing each before bringing them back together in your revenue funnel.

Velocity: How long does it take to win a customer?

In essence, how long does it take a prospect to move through the entire buyer’s journey or revenue funnel on a stage-by-stage basis?

If prospects aren’t moving as expected, or quickly enough through the marketing or sales process, this is a huge indicator that you might not hit your goals within the applicable time period. Let’s say in the previous quarter, a lead: Attended a webinar, downloaded an eBook and other content after that, and finally reached out to directly talk to with a sales rep. In this scenario, let’s say it took 30 days for this to happen. When you get the average time of all the leads that entered the funnel in that quarter and successfully engaged in your marketing campaigns, you have a sense of expected velocity for that period of time. You now have data on your expected pace of business for your top-of-funnel (TOFU) efforts.

If the plan includes webinars and content, marketing can refer to its successes (and misses) to make sure the ones that engaged the most prospects are replicated. By monitoring velocity, you can also compare the velocity of your new plans against past ones. If it’s taking more than 30 days, the team needs to determine what’s causing the slow down to course correct. If it’s taking less time, figure that out too – and maximize it!

Conversion Rates: How frequently do you win at each stage of the buyer’s journey or revenue funnel?

Marketing would love to convert every lead, but we live in the real world. Our products and services are not a fit for everyone. So, it’s good to determine what percent of leads convert down the funnel to sales and become opportunities. And in turn, how many opportunities become customers.

I used a marketing example previously, so I’ll provide a sale example for conversion rates. Keeping your eye on conversion rates helps to ensure your opportunities are moving successfully through the buyer’s journey. If a sales rep achieved a 35% conversion rate last quarter, you might expect the same performance for the current quarter. Other metrics can also play a factor, such as net new movement. Is the sales rep getting enough quality leads from marketing? Has the selling strategy changed and is it working better? If the goals were increased, a sales rep may even need to outperform his past conversion rates.

Average Sales Price

Most businesses offer a variety of pricing options, so you want to determine the most likely total value of your sales to determine the number of sales needed in a period. If you are at your velocity and conversion limit, determining ways to increase the sales price or upsell can help you still achieve your lofty revenue goals.

2. Gain precision with revenue stages and slicing your data

Once you understand the key metrics that play a factor in hitting revenue goals, you will want to view and monitor these at a granular level.

Slice performance by your marketing and sales stages

View velocity and conversion rates by the specific funnel stages. For example, in the diagram to the right, you can see an example of a  buyer’s journey with six stages. If you aren’t able to determine velocity and conversion rates for each stage, you can start with overall metrics broken out by marketing and sales stages.

Stage-by-Stage Revenue AnalysisGathering data in this manner provides you with precise performance data. In a long, complex sales cycle, focusing on what you need to do to convert leads quickly to the next stage ensures that you always have momentum in your funnel that will help reach your revenue goals.

If your plane was scheduled to fly into LAX, not having this level of precision means you might get rerouted to John Wayne in Orange County. Not a huge deal, but probably not what was your CEO was expecting.

Drill-down into key data segments

The next step is to monitor all three metrics (velocity, conversion rate and average sale price) by the data segments that are meaningful to your business. This is where things can get messy, and quite frankly, overwhelming (unless, of course, you really love spreadsheets).

But here’s why you do it: Monitoring these metrics for relevant data segments (regions, products, sales reps, campaigns and channels) allows you to see the variability in performance across segments before you need to reach your revenue goal so you can pinpoint issues today and course correct to get back on track for tomorrow.  

You can also utilize this view of the business to set specific goals for very individual activities which rollup into the overall revenue goals for your business.To read a specific example of how to do this, you can read how in one of my previous articles.

3. Measures and track performance together

During a flight, there is always turbulence. You can’t avoid it. In achieving revenue goals, luckily, you can minimize it. I have found that making marketing and sales successes dependent on one another from the start can reduce the “blame game” when it’s time to execute the plan.

The marketing and sales alignment hurdle

When you slice and dice your data by sales reps, regions, marketing campaigns and channels, it makes sense to divide this up by teams and have each business unit or area help with revenue planning.

At FunnelWise, we have formed a cross-functional team that plans and executes together.

As you monitor marketing and sales efforts by those key metrics and drill down into them by the data segments for each stage, this same team should meet on a regular basis to review the metrics and determine where to make necessary adjustments to improve or accelerate the plan together.

There is a balance when putting this team together. The more people involved, the better the buy-in. However, B2B News Network recently shared five areas to focus on when evaluated your B2B marketing plans. Their first word of caution was about having “too many cooks” in the kitchen.

Too many cooks can cause problems, but you do need to have both marketing and sales leaders working together to reach revenue goals. They may plan and pull metrics separately, but they need to come together and reconcile their differences. This helps avoid finger-pointing when goals aren’t met. Sales will say, “Marketing didn’t provide enough quality leads for our pipeline.” Marketing will respond with, “Sales didn’t follow up in a timely manner or ignored marketing leads so they could work their own leads instead.”

My company has a great cheatsheet for building this type of team. Feel free to download and see what aspects your company has or is missing.

This also sets them up to overcome the next hurdle – together.

Monitoring performance metrics

Marketing often has its own way of measuring success, such as click-through rates, website visits and marketing attribution. All of these KPIs are invaluable in evaluating the effectiveness of marketing and improving the plan.

However, for tracking performance against the plan, marketing needs to share the metrics discussed earlier – velocity and conversion rates – with sales. This is the only way they can confirm how many leads are needed (conversion rates) at the top of funnel and when they are needed (velocity).

4. Now you are ready to accelerate revenue

Accelerate RevenueOnce the first three steps are in place and you have a firm grasp of all of the moving parts of your revenue funnel, it’s easy to hop on the plane and navigate the friendly skies (well they used to be more friendly). The next step is to think about moving up to a rocket-like trajectory to accelerate the buyer’s journey and optimize conversions.

By analyzing the performance data against the actions marketing and sales teams take, you can identify which actions have the highest probability of successfully moving prospects forward in the funnel. This is your rocket fuel.

Marketing attribution and campaign performance can be analyzed to help marketing teams identify the “right touch at the right time,” such as:

  • Which ad campaign brings in the highest volume and quality of leads?
  • Which piece of content has the highest probability of converting leads?
  • Which marketing campaigns help sales close deals down the funnel?

In turn, sales can review their actions against performance and determine factors that convert and close deals, such as:

  • How soon should we follow up with a qualified lead?
  • What is the total number of calls or emails made before a lead is recycled?
  • Which types of decision-makers (based on titles or personas) have higher odds of scheduling a meeting or closing a deal?

Data will set you free

It can be a challenge to use your data to tell you what to do and to monitor what is happening. But, if you do, you have the potential to skyrocket past them and better forecast your business’ revenue.

While I have a great love for spreadsheets, efficiently and quickly accomplishing the four steps above to stay on course with your marketing and sales goals is difficult. And, that is why I started FunnelWise. I missed goals, realized how data could set my flight plan and fuel my company’s buyer’s journey by connecting data to actions.

– Matt

I spoke last fall at Ops-Stars during Dreamforce ‘17 and gave a presentation about how you can use data to help build a proven playbook of actions. We also handed out this guide that walks you through how to assess performance and find those actions.

I’d love your thoughts on the presentation, the handout or challenges in your revenue planning. Feel free to comment below or email me at matt.o@funnelwise.com.

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