Unlocking Profit Potential: The Four Cornerstones of Revenue Growth
- Juggling multiple, often conflicting, initiatives, many of which are not revenue generating
- Managing numerous, incompatible tools, platforms and methodologies, many of which are too complex and not leveraged by front line teams
- Reducing budgets
- Silos within the business with poor collaboration between departments
- Lack of control due to opaque plans and weak management information
In this situation it’s time to get customer-centric, cut through the complexity and focus, ruthlessly, on four key drivers of revenue growth:
1. Optimize the Organization: Create a ‘fit for purpose’, growth-orientated operating model, optimising customer facing time.
Our team is our most important (and usually the most expensive) asset. So, it’s crucial that we create a highly motivated, customer-focused set of individuals who spend their invaluable time aligned to customers.
We need to engineer our alignment by deploying a growth-oriented segmentation model. This will ensure a scientific approach to mapping appropriate skills and effort (from right across our business) to high growth opportunities and profitable, high attrition risk customers
We also want our people pro-actively engaged on revenue generating activities rather than being swamped in unproductive admin tasks that could be better dealt with through other methods. For example, our skills and resources can become increasingly hybrid and complimented with cost effective digital tools and channels that customers are happy to utilize.
Equally, we shouldn’t underestimate the importance of continually motivating and retaining our high performing talent. The cost of churn is significant when measured in terms of customer impact, morale and money.
2. Retain and Grow Existing Customers: Keep profitable customers for life, minimise controllable attrition and kick start revenues through upselling and cross selling.
The impact of customer churn has been well examined – acquiring a new customer costs anything between 7-10 times the value of retaining an existing one. Therefore, we must ensure we create long term customer value, that is measurable, through the quality of our business relationships.
Critical to success is the ability to immerse ourselves in our customers’ world…understanding their pains, recognising the language they use to define success and explaining how our solutions fix these pains. Customers need to see us as integral to their business, rather than as a supplier of commodity products and services. Answer these questions honestly (with an eye on point 1 above): how often do we recruit our front-line teams from within our customers’ industries? Are we more interested in recruiting people who know all about our product features?
In account management, cross selling and upselling is often treated as an organic activity. But, in the current climate, we need to set a fire under teams and create a sense of urgency. We can do this by designing simple but compelling campaigns with a ‘war room’ mentality, incentivizing success and accelerating revenue growth.
Equally, we need to get proactive and forensic about managing the risk of attrition by understanding the specific triggers of churn for our customers. We can describe these triggers as operational, relationship, commercial and competitor related as we implement relevant tactics to counter them. To lose a customer unexpectedly is a cardinal sin!
Customers are the crown jewels of any organization. Maintaining and growing profitable customers is a science, not an art. As such, we must put in place specific mechanisms that promote appropriate behaviours and prioritize activities.
3. Win New Customers: Identify attractive suspects and accelerate conversion of new customers
We recognize that acquiring new customers is crucial for business growth – but it’s harder and more costly than growing existing ones. In order to optimize our skills and resources and improve the probability of success, it’s vital that we invest time identifying the appropriate target market and associated sweet spots. This means we must define the criteria for what constitutes the perfect customer, the ideal market aligned to our propositions and the potential ‘compelling events’ that act as buying triggers.
We must then quantify the size of the prize, generate ambitious but realistic goals and selectively attack the sweet spots. Taking this strategic approach from a centralized position is far more productive than assigning individual sale targets and leaving front line teams to decide where to aim their efforts.
A food for thought leadership question regarding ambition: do you assign your new business targets as a portion of your overall budgeted targets…or do you ask yourself the question “what would it take to blow the doors off?”
Finally, we need to ensure that the task of acquiring customers is systematic, consistent and controlled. It should be managed to a drum beat of sales activities, underpinned by a simple playbook that describes ‘how we win’ i.e., defines our sales process, proposition, support, incentives and governance process.
4. Deliver Customer-Centric Leadership: Generate a growth culture whilst maintaining transparency and control over the business.
A high growth organization requires authentic, customer-centric leadership. This is non-negotiable. Credibility is created by ‘walking the talk’ in the way leaders engage with customers, the strategic direction they set for the business and the type of questions they ask internally.
In practice, this means prioritizing customer-orientated activities above internal initiatives – in fact giving permission to stop doing stuff that interferes with this agenda.
It means generating leadership KPIs to include customer related activities, for example executive customer engagement, speaking at industry events, sponsoring campaigns etc.
Successful leadership teams formalise the way they transform to ‘growth management’ using simple tools and techniques and committing to specific behaviours. Tactical outputs from this might include active engagement in key customer account planning, coaching teams through win/loss reviews etc.
‘What gets measured gets done’ is a useful cliche to harness in a growth environment. Make sure that KPIs and operational reviews (and even corridor questions) align to the agenda you have set for growing revenues. Equally, leaders need to get more intentional about the way they use conversations with teams. Transformation is, in essence, changing the conversation – which in turn changes the way people think and act.
Reflecting on these four cornerstones, it’s clear that leaders need to prioritize action over protracted planning. They need to create a sense of ‘controlled panic’ with a clear, easy to execute agenda, a laser-like focus on a few critical KPIs and alignment of the ‘A team’. Fresh, simple tools and processes need to be installed, at the expense of stale ones, to turbo charge productivity. And, to make revenue transformation happen, leaders need to demonstrate visible, customer-centric leadership.