“Accurately forecasting revenue is becoming a religion, and religion in this market is praying for revenue to forecast” …a NorthPoint Customer

ABSTRACT

This article identifies the most successful approaches for “what to do”, “what not to do” and “why” as it relates to the foundation of most business, which is “What is the real achievable revenue”.  

This new economic environment will change the approach to the fundamentals of management, as the “Rule of Thumb” will unfold as a set of miscalculations rather than the New Truths of success.  Change like this never comes at a good time for anyone so the question is “what to do and how to do it”.

The previous article identified the fact that buyers and customers, as the demands, risks and markets become more difficult, change their business model. They are no longer ready to assume that their suppliers and business partners are prepared to support them in the way they want and need. Business relationships are now moving to the eHarmony model of personal relationships, commitment and performance. It is now all about human and business analytics.  Marketing, as a respected and influential part of the enterprise, takes the lead if they have the KEP™ (Knowledge Experience and Performance) to establish the buyer and customer connectivity process that is effective and efficient in determining the two factors required for innovation as a competitive asset:

1.      Identifying buyers and customers unmet needs

2.      Identifying the unidentified needs that buyers and customers will see as critical to their success but may have not thought of themselves

The results include customers being more demanding and suppliers and business partners will have to adopt new management analytics that are needed to address this change. Asking the question now and demanding both the human and business analytics are just half of the steps to success.

ADDRESSING A NEW ECONOMY DEMANDS A STRATEGY THAT IS NOT JUST TOP DOWN.

There are always steps to success and here are the first required to develop a real, tangible, accurate, achievable revenue plan. The question is “how do you do that?” Sir Francis Bacon said a long time ago that “The prudent question is one-half of wisdom” and that question is “What is our achievable revenue”?

Identifying real revenue is based on a number of important factors.  Buyers and customers find, for the most part, that there is an oversupply of nearly everything in most market segments other than Health Care, Bio Tech and, to a lesser extent, the Telecommunication sectors. The others are in lesser levels of a real innovation cycle and as such must be considered in any products and services offerings.

There are critical and achievable STP (Steps Tasks and Processes) that if used well can produce accurate sales volumes.  

The Twelve Steps and Processes that are required to identify and achieve realizable revenue for an enterprise are:

1. Identify the unmet needs of the buyers with a complete and disciplined  process
2. Identify the value propositions of the offering
3. Identify the which value propositions are the most and least important to the buyers
4. Identify the risks in the mind of the buyers to achieving the prescribed value
   1. Example – Risk in the buyers mind is how they score the following:
                           i.      Do I, as the buyer, believe you understand the problem I have to solve
                          ii.      Will you solve all or part of the problem
                         iii.      Will you make me successful, etc?
5. Take the offering and validate it with prospective buyers
   1. Identify those buyers and customers with a propensity to buy immediately (65%, 75%, 85%, and 95 %+) as a percentage in each specific target market
6. Develop the market message and manage it through the 12 – 15 channels required to impact the available market
7. Identify the brand index; it has to be 85% or greater to have the shortest sales cycle in the industry
8. Identify they competitors sales cycles, as a comparison. Develop the shortest sales cycle in the industry
9. Validate scoring of the competitors offering and use it to develop a better offering and delivery process. Lead the industry in ACV (Actual Contract Value) per sales person or channel  
10. What is the sales force reach in terms of geography and win rate? Incorporate it into the revenue model
11. Retrain the sales personnel with the results of 1 – 10 in this list
12. All of this is done by personal interviews and not “Focus Groups”, which are notoriously inaccurate (for other than commodity offerings; i.e. soap, etc).

Marketing needs to take on a new role to understand buyer needs and their solution preferences.  Product management needs to be remissioned to assure that internal personal biases, the number one reason for offering failure, never be allowed again. Marketing should not be just about promotion, but to lead in the execution of the twelve (12) points above. The following demonstrates the precision required and the impact the execution those points.