An excerpt:

When you take a close look at how companies utilize their sales staffs, there are two clear reasons for Zero Visibility Sales Forecasts:

1. Salespeople are allowed to create their own forecast process
2. The forecast process aligns perfectly with the Don’t Ask, Don’t Tell Sales Model

Left to their own devices, sales reps will routinely forecast optimistic numbers for business that will most likely never close. This spells revenue roulette for the Chief Revenue Officer.

As they say, please read the entire thing.

The short answer is:  Leadership teams strategize systems – not tactics.

My experience suggests most companies will strategically plan and develop their infrastructure systems (lean manufacturing systems, global IT systems, ISO 9000 systems, etc.) as core assets of the business but invest little time on their revenue processes.  That is not surprising when you consider sales is not a college degree discipline (in sales, you earn your PhD on the street) so the typical planning discussion for sales ends up being a series of tactical decisions like attending more trade shows, increasing promotions, upgrading the web site, adding social networking, etc.   Once leadership teams realize how the 4 core processes of a closed-loop Revenue System can be integrated into a system that actually supports the business vision, the roadmap for growth becomes much less virtual.

–T.S. Eliot, from The Rock

There was a time in the evolution of computer when this concept was believed to be just a few clicks away. Well, decades later, we are still a few clicks away but the journey has been productive. E-commerce has certainly ‘evolutionized’ B2C sales models with some crossover into B2B segments involving commodity items like airline tickets, office supplies, etc. However, if you are in B2B and not positioning your business as a commodity player, then it’s back to work on your Revenue as a System (RaaS) program. A systems level approach can certainly help good employees improve performance but we are still a few clicks away from “so perfect no one will need to be good.”

Most CEO’s understand Deming’s wisdom and apply this concept to many aspects of this concept business …except in sales. Sales is typically viewed as an independent variable of the business and not subject to the same level of Deming development or accountability.

Sales Revenue System 2.0 changes that model and enables CRO’s to understand how sales is a “system-level activity” just like any other business system (Lean manufacturing systems, global distribution systems, ISO 9000 systems, etc.). 

The four core processes of a closed-loop revenue system deliver:

· A “bankable” forecast with a complete audit trail:

· A structured go-to-market model with shorter sales cycles.

· Results-based incentive plans to drive business growth.

· The critical tasks for identifying and selecting real sales talent.

The end result is the sales function becomes a systems-level cornerstone of the business.

Look at the transaction from the prospect’s world and define how their overall performance is improved by having your product / service. That is your Differentiating Value and you can never have too much DV. Most prospects are already buying from someone else today so the more DV-based improvements your products deliver to the prospect’s business, the better platform you have for revenue growth.

The question always comes up…“What if they are happy with a competitor’s product and there doesn’t seem to be a benefit to making change?” This happens every day in sales. Our observation is one of two situations typically applies. If your product delivers substantial, compelling DV to your market and the sales rep has asked all the Critical Qualifying Questions for Motivation but the prospect is not responding, your rep is 1.) not connecting with the emotional buyer or 2.) the prospect is not a ‘fit’ for your DV. Assuming the prospect is not a fit for your DV, it is better to know that as early as possible in the sales cycle so you don’t waste time pursuing and forecasting dead end deals.

Companies have discovered their “go to market” process cannot be left to independent interpretation. Having regional or district offices introduce, position and sell your products/services in totally different ways has proven to be costly, inefficient and unproductive. The go to market process starts with the age old 20 second intromercial and runs through how you position your offerings to qualify, forecast and close new business.

If you feel your go to market process is rock solid, ask you executive team to give a 20 sec intromercial at the next team meeting. If the executive team is not on the same page about how they introduce the business, the sales team will not be there either. Random revenue processes are seldom part of any successful plan or strategy.

First, ANY business system (production, inventory, quality, Lean, ISO, etc.) is:

— Process-Based

— Built on Competence and Expertise

— Includes Process Accountability and Diagnostics

Ideally, the system operates as a process-based, closed-loop activity so performance is predictable and consistently within acceptable standards. Obviously, most systems operate entirely within the 4 walls of the business but Revenue is based on outside variables called suspects, prospects and customers that comprise target market segments.

Even though suspects, prospects and customers exist outside the 4 walls of the business (aka independent variables), the system definition still applies. In our model (Sales Revenue System 2.0) Revenue is very much a “system”…and not and event.  Our clients already know that.

My experience suggests all companies do have some form of revenue system (heart) in place today. The reality is most are the “open loop” intermittent variety meaning the core revenue tasks of selling, forecasting, rewarding performance and staffing operate as standalone events with minimal process accountability. They may be done by one individual but that person addresses these as independent – sometimes even burdensome – tasks.

All companies have revenue stimulators (cold call Fridays, end of quarter discount promotions, etc.) that are used to keep the vision alive – and the doors open – but these are best described as tactical adrenalin, not a revenue system.  When these no longer produce the results needed, the quick-fix option is lowering the revenue bar to align with current ‘system’ capabilities assuming the financial structure can accommodate the reductions. This is the drug of choice for sustaining most ‘open loop’ based revenue models…and the number one reason why companies prefer a ‘closed loop’ revenue system (heart).

However, some sales teams are seeing higher numbers of UFO’s (Un- Funded Opportunities) such that starting with the Money discussion to confirm a budget does exist or funds can be allocated for the transaction is just a good strategy in today’s economy. There is a lot of stress in parts of our economy and it is not the first time we have seen prospects trying to identify new projects that could become their job savers.

The old rule – no money, no prospect – still applies.

What we sell and how we get paid are two different things!

Your Differentiating Value is what separates you from the competition and goes beyond core competencies like the typical quality, service and support platforms most companies promote. The Sales Revenue System 2.0 book example of the cinnamon sales rep is a typical illustration of this discovery. He was actually selling ‘time to market’ for new products but got paid in shipments of cinnamon and other spices.

The first step in our Revenue System implementation always starts with defining your Differentiating Value…and the discoveries that follow.