Rethink your B2B revenue model
Early in my career, I made the not-so-typical move from engineering to marketing. Ironically, that change of direction came about because I wanted to design and build innovative products. And for the past 15 years I’ve had the thrill of doing just that: innovating and creating events, programs, content, processes, and systems. All of that has come from being handed challenges or challenging the status quo. All were periods of personal and professional growth.
None, however, have made me question my point of view and shift my perspective as much as building a sales organization. I had supported sales throughout my career, but when it came to the age-old argument about who was to blame if sales failed to hit the mark, I was squarely in marketing’s corner: “we” always produced more than enough leads.
Turns out, the leads weren’t good, the process was backwards, and sales was shouldering all the burden.
Delivering the Right Message to the Right Person at the Right Time is the holy grail of marketing and sales organizations. Chances are, if you constantly throw a variety of messages to a variety of people, you’ll get some results. However, the process isn’t very efficient.
In most B2B markets, it takes a long time to win a deal, and the critical task of collecting actionable intelligence and influencing buying behavior falls squarely on the sales rep. It’s not only inefficient, but also a high-risk gamble.
What if everyone could contribute to the entire revenue cycle?
What if every process had a clear objective tied to closing an opportunity?
What if critical information was captured earlier in the revenue cycle?
What if marketing and selling decisions were based on facts?
Much has been written about the need for alignment and collaboration between sales and marketing functions, and many companies have attempted to achieve a true symbiotic relationship between them.
But it’s not easy.
In the traditional marketing-then-sales structure, marketing does its thing (finding targets, sending emails, capturing clicks), and then throws a name over the wall for sales to do its thing (introduce the company, discover/challenge, educate on the offering, propose a solution). Both functions have their own processes and goals. However, those goals often conflict. One is focused on quantity and high-level engagement; the other is concerned with quality and personal interaction. Worse yet, neither side typically has visibility into the other. The result: finger pointing.
The documented solution to the blame game is better communication and transparency, but that fails to address the root cause (misalignment) or significantly impact revenue.
After going through the process of building out a marketing-then-sales organization and suffering from the same challenges, I came up with an altogether new way to think about generating revenue. I designed, built, and implemented a new revenue model that turns the “then” into “and.” Triggered by changing that one word, I ended up with a revenue model built on six concepts, outlined below, that shift the traditional thinking and approach to generating revenue.
One of my colleagues often says, “It’s not a matter of if,but when.”
Just as you should never step onto a playing field without believing you can win, you should always expect that you’ll win every deal you go after. That simple mindset shift will change your organization’s approach to execution. It starts with only going after deals you should win.
Targeting is one of the most powerful tools available within B2B (especially B2LargeB) marketing and sales. With an ideal customer (account) in mind, businesses can develop a list of target accounts that make up their Total Addressable Market (TAM). These are organizations that match your ideal customer profile and can benefit from your solution.
In most organizations, targeting is often overlooked or underutilized, yet it can be what makes or breaks your revenue efficiency. You can throw everything you’ve got against the wall to see what sticks, and that might work, but it’s not very efficient. Instead, build a list of target accounts that match the profile of your ideal customer. Those accounts are your opportunities. Let me state that again: those accounts are your opportunities.
If targeted correctly, every one of those accounts can benefit from your solution. The question is not if, but whenthat account will turn into a customer. As a bonus benefit, it’s easier to confirm that an account is nota current, qualified opportunity than to determine whether it is.
Know What You Need Before You Begin
Once you make the first mental shift from ifto when, the rest of my revenue model begins to fall into place. Think about the end state: a signed contract. What had to happen to win that deal? Start by listing all the activities connected to winning. You may even want to pull together an attribution report that calls out every touchpoint leading up to the client’s signature.
Were every one of those touchpoints critical to winning the deal?
So then simplify your list by determining the information needed to become an expert on the account and specifying the behaviors that changed to bring the customer through the buyer’s journey. Start with the end in mind and ask questions about how you got there.
- What drove the urgency; why now?
- Who influenced the deal? How and why?
- What actions did the buying process entail? Who was involved?
- Who was your competition?
- When did the customer realize you offered the most ideal solution? Why did they choose you?
Answering these questions will result in a checklist. If an item isn’t on the checklist, then it’s not needed. Is getting a person to click on an email in the checklist? I hope not. You probably have something like “identify need” on your list. Although getting a person to click on three emails may show engagement and interest, it doesn’t necessarily mean that you know their needs or that there’s any sense of urgency to address their needs, if they even have any. Maybe they do, but you can’t check the box just because they clicked on the emails. Otherwise, you’re just assuming – which brings us to the next key concept of the model.
The traditional marketing-then-sales process is rife with subjectivity masked by data. For example, a score may classify an individual as a Marketing Qualified Lead (MQL). But digging to uncover the underlying reason for that score might turn up that a website visit and a click on an email nudged the individual into MQL status. While those moves may indicate interest or even buying intent, the score is the sum of discrete actions, and the threshold is likely set based on desired funnel throughput. Both of those are subjective, but it’s hard to realize that until someone speaks to the lead to validate the sales burden.
Modern marketing and sales are celebrated for their use of data. With the ability of today’s tools to track every action and reaction, organizations have an abundance of information available to them. Some of that data is fantastic and objective, like an individual’s answer to a survey question about his or her decision timeframe. However, much more of it is subjective. Whether the data is based on business processes laden with assumptions (like one click indicating interest) or there are assumptions made directly about what the data represents (like a rep overstating a relationship with a contact), we often have more assumptions than facts to work with.
Maybe you iterate through trial and error, but ultimately, you accept the error and bake it into your projections. Instead, you can increase efficiency by removing subjectivity in favor of gathering more accurate and insightful data. You know what you need to win the deal – you’ve already compiled the checklist. Your challenge is to execute without assumptions, and that means you need to ask questions. Don’t infer, ask. After all. asking questions is a critical part of a productive conversation and the resulting relationship.
Align Skills and Tools to the Processes
Typically, functions such as demand generation are focused on quantity of leads (people), while sales development is focused on setting up meetings. Neither has visibility into what the other is doing, and that results in the blame game. I’m sure you’ve heard from both sides: sales claims the leads are bad, while marketing argues that the reps aren’t pitching correctly.
With a well-thought-out checklist of objectives, everyone knows what needs to be accomplished to close a deal. Once you have a discrete set of desired outcomes, it boils down to execution, and it doesn’t matter who accomplishes it or how. Typically, we think in terms of functions: e.g., advertising raises awareness. But it’s better to think in terms of business processes, the skills needed to execute them, and the desired outcome. There’s more than one way to do something, and that great ideas and execution can come from anyone. This approach also results in a more organic evolution of camaraderie and collaboration across the organization.
With transparent goals (a.k.a. checklist items), anyone in the organization can contribute to any function. Business processes can be designed and implemented to leverage a variety of skill sets. Ultimately, anyone who can contribute to checking off a box is free to do so. More importantly, they should.
For example, late in the sales process, a rep might be trying to get in front of the signatory by working through her contacts and relationships. But what if, earlier in the process, someone else – looking to check off a box – conducts the research necessary to identify the signatory? What if someone in customer success for a different account happens to be in contact with an advocate who’s connected to the signatory on LinkedIn? A connection can be made early on, and a box is checked. Most importantly, you now have the inside track on getting the deal signed.
Don’t Wait To Check Off A Box
This model isn’t sequential. With visibility into what needs to be done to win the deal, anyone can contribute at any time. The more boxes you can check off, the higher your probability of winning. Remember my colleague’s motto: “It’s not a matter of if,but when.” Why wait until the end? If you can check off a box, do it. Leverage the skills and resources available across the team to accelerate the buyer’s journey. There’s no need for the team to wait before acting, or for one person to dictate who should do what and when. Transparency drives collaboration, and collaboration accelerates the deal.
Now, at this point, you might be starting to feel unnerved by the thought of the chaos that could ensue if everyone in the marketing and sales organization jumps onto the same opportunity at the same time. However, this model has one last component that provides order to the process while also controlling the spend.
Unless you have an unlimited budget, you won’t be able to go after every target account, trying to check off every box all at once. So you try to prioritize. Even then, the risk may be high. How much can you spend on a given opportunity before you determine that now is not the time? Avoiding placing all your eggs in one basket is an important part of the model.
Because you’re operating under the assumption that it’s not if but whenyou win the deal, timing what you do and when you do it is very important. The actions and timing are not driven by the prospect, but rather by your budget and the probability of the win. The key is to increase your investment in an opportunity based on its progression.
Every time you check off a box, you increase your investment. It’s like doubling down in a game of blackjack: you learn more, you invest more. With every box that gets checked, you’re increasing your probability of winning the deal. Simply match your investment to the probability of the win.
Doubling down on an opportunity enables you to prioritize based on that probability, which is in turn based on objective data. If you’re like me, this is where you get to have some fun. You can track and manage your investment according to the progress of an opportunity. You can dial the model in until you know that to get X, you must spend Y amount of money, and you can apply this process all the way down to the objective or checkbox level. The result is a systematic, predictable revenue machine – and the engineer in me loves that.
With the model I’ve outlined, the process of generating revenue becomes systematic. Everyone on the team knows what needs to be done to win the business. Everyone knows what processes need to be executed. Everyone knows how much they can spend. Everyone can contribute.
For the sake of brevity, I’ve simply outlined key concepts of my revenue model. Success in generating revenue is still dependent on traditional marketing and sales skills and activities. The model changes the application and goals of those skills and activities – but it doesn’t replace the need for a strong brand, go-to-market strategy, and product.
Finally, for this model to work, you’ll need your entire team to buy in. As with any change, the hardest part will be getting your team to embrace and support it. Once your organization’s thought process has changed, the doing will follow. That’s when the fun starts.
Author, Thomas’s Urie is CCO at Energage
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