Category Archives: Revenue planning

Is Your Sales Funnel Perfectly Designed for a Company in 1990 rather than 2013?

Buyers buy differently today and if your funnel doesn’t reflect how buyers buy, you’re probably falling behind your competitors. Indeed, the funnel management of many companies only covers about half of the actual stages through which a typical B2B buyer progresses. If you’re not properly managing the entire funnel a high percentage of potential deals are going to your competitors without your company even getting a chance at bat.

I recently recorded a webinar that is well-suited for Marketing and Sales managers. Click on the link at the end of this post to view the webinar.  It covers these topics:

    • Why it matters that you align your strategy, processes, and funnel stages to the Buyer’s Journey
    • The critical stages that are frequently overlooked
    • Funnel examples that align Sales & Marketing to the Buyer
    • Rebuilding your funnel model to learn the necessary funnel velocity

What can go wrong with funnel management – webinar


Creating a Funnel-Driven Marketing Plan Your CEO Will Love

Will your next revenue  plan clearly show how marketing and sales will work together to implement the company strategy? Will it convincingly and mathematically model how the two organizations will apply tactics that advance enough buyers through the pipeline/funnel to achieve the revenue objectives? If your budget is cut by 20% before approval, can you quickly show the impact of that cut on demand generation and revenue generation?

If you answered “no” to any of these questions I urge you register for my October 3 workshop at DemandCon in Boston. Fittingly enough, the workshop is entitled, “Creating a Funnel-Driven Marketing Plan Your CEO will Love.”  This is a certified workshop for sales and marketing professionals that reveals advanced techniques and best practices for increasing revenue volume and velocity by using integrated and aligned funnel planning. It’s not just a planning process, it’s a an amazingly effective way to align sales and marketing for utmost effectiveness.




How Long is Your Revenue Runway?

Many business managers I speak with don’t have an accurate view of how long their revenue runway is; or to put the metaphor aside for a moment, they are unclear about how much time is required for the marketing and sales team to create enough customers to achieve a revenue target. Almost without exception the estimated time to revenue is perceived as being much shorter than it is in reality. The misperception is dangerous. It leads to wildly inaccurate forecasts, wasted budgets, and unnecessary management turnover.

Ask any pilot and they’ll tell you with a high degree of accuracy the length of runway their plane needs for takeoff depending on weight of the aircraft and environmental factors. They can also tell you at what ground speed their plane achieves the necessary lift for takeoff. If their plane is a G5 it needs 5, 150 feet of runway to take off. If it is a 777-200 there better be at least 8, 300 feet of black top in front of it.

If knowing when a given level of revenue can be achieved is so critical, why do companies get it so wrong? It’s because they are only looking at the late stages of their funnel and ignoring the time necessary to find and nurture prospective buyers (the mid and early stages) to the point where Sales should engage. They’ve been trapped in the “Sales Cycle” mentality rather than adopt the “Buying Cycle” perspective.

Recently while creating an integrated Sales and Marketing plan for a client, I asked the management team to tell me the length of their sales cycle. They estimated it was 8-12 weeks. They had historical data to show that once a prospect was talking with them about the problem they hoped to solve it took 8-12 weeks to advance to a point where a purchase decision was made.

Unfortunately, if they had built their business plan and cash flow projection based on that information they would have crashed and burned just like a G5 with only 2,000 feet of runway.

What hadn’t been taken into consideration was the amount of time Marketing required to attract and nurture buyers. In the case of my client, once all the stages of the buyer’s journey were identified, they estimated that the early and middle stages of the funnel took 38 weeks. So the time it will take to find, nurture, and close a prospect actually will be 50 weeks–nearly one year–not 8-12 weeks.

This knowledge enabled us to build a realistic demand generation plan to support short term and long term revenue objectives.

The other factor impacting time to revenue is internal bureaucracy. For some companies the amount of time it takes for Marketing to plan and implement a program or campaign is ridiculous. Companies who want to be more nimble and aggressive must take a critical look at the approval processes for marketing budgets and content. Does an email campaign really need five managers to sign off on it? Why make Marketing jump through another set of hoops to get approval for a specific program budget if it has an approved budget for the quarter? Worse yet, why is that the president or the Board have to sign off on a $10,000 program? Tight fiscal restraints can choke the life out of Marketing momentum and extend the time to revenue. It’s far better to hire good managers, approve budgets well in advance, and let them manage to the budget.

Don’t let expectations be set that your revenue cycle is shorter (or longer) than it really is. Marketing and Sales have to collaborate in the planning process in order to create the right model for the company.

Why Are Sales and Marketing Usually Unaligned?

(I originally wrote this post for Lead Views, Leadformix’s blog. I’m re-posting it here.)

At two different speaking engagements this month I asked the audiences of marketers if they thought the lack of sales and marketing alignment was the biggest obstacle in their company to achieving significant revenue growth.  At both events (one a marketing conference, the other a webinar) the results were similar. Over 60% agreed that the leading nemesis to greater revenue performance was the lack of alignment between their department and Sales. The other 30% to 40% believed another factor was primarily to blame such as market/economic factors, resource restraints, skill gaps, relationship gaps, or process / tool gaps.

Let me cut to the chase on the topic of sales and marketing alignment. There are three reasons why mis-alignment is present.

1.       Top management doesn’t understand the full contribution that Marketing can make and should make to the business.

2.       Marketers are not adequately trained to be true partners with Sales in the revenue generation process.

3.       There isn’t an integrated planning process to enable (or force) Marketing and Sales to craft unified strategies and tactics.

The CEO. The buck stops at the top. So I’m placing some of the blame at the feet of the CEO because of their misunderstanding or ignorance of the significant role that Marketing can play in their organization. If they don’t really understand the power of Marketing, they won’t hire the right skills, insist on the right processes, or insist that Marketing and Sales work as a tight team 24/7.  The CEO doesn’t have to know how to align he just needs to create the environment where alignment will occur. Without a really capable Marketing function a company is going into battle without all its weapons.

The Marketer. Sorry to admit that one of the biggest reasons for lack of alignment in B2B companies is that the folks in marketing just don’t have the necessary skills and perspective. Too many bright marketers haven’t learned how to be of greater value to the organization. Marketing in a B2B company is so much more involved than “branding”. We must see how to contribute closer to the “point of revenue” than our programs are impacting today. We must connect and measure our ability to impact company goals. This takes advanced B2B training, coaching, or years of painful experience. Without requisite skills the Marketer can’t earn the respect of Sales and the CEO.

The Process. The annual planning process is usually done in silos. Marketing does a plan. Sales does a plan. The two seldom talk during this critical period. The right mercifully short but rigorous planning process can harness the creativity of Marketing and Sales to construct together an action plan for achieving a revenue objective. The right process will focus the two departments on the buyer’s journey and the market, rather than a sales methodology.

If my two unscientific polls are representative of all B2B companies, 60% are blocking themselves from achieving greater revenue performance because the CEO doesn’t know what to demand from Marketing, Marketers don’t have the right skills to deliver bigger results, and the companies aren’t following an integrated market-focused planning process involving Marketing and Sales.

The good news is all three of these situations can be remedied in a relatively short period of time. CEO’s can learn what to expect from the marketing function. Marketers can learn critical skills. Sales and Marketing can plan together in a way that really aligns their efforts and processes.

Feeling the Impact of the 9-Month Year Yet?

I know some of you are sweating bullets right now. The end of Q1 is near. Your revenue and marketing objectives may be in jeopardy.  Here’s why the first fiscal quarter for a lot of companies is painful.

If Q1 is tough you’re probably feeling the impact of a 9-month year. The problem is you put the hurt on yourself. Yep, you caused the panic in Q1 if:

  1. The 2010 sales and marketing  plan/budget wasn’t approved by October 2009
  2. Marketing and sales funds for 2010 programs weren’t made available until January
  3. Sales and marketing were completely consumed in Q4 on moving buyers through the last few stages of the funnel
  4. Sales and marketing don’t know what the lag time is for each stage of their revenue funnel.

Any one of these things will throw a big wrench into the revenue-generation gears for Q1. Instead of moving the necessary volume of buyers through the funnel during the first quarter, many of you were just getting plans approved and starting to execute. No way can you impact Q1 revenue if the length of your average sales cycle is 8 weeks or more and campaigns are launched in late January or so.

Getting out of the blocks quickly with your sales and marketing programs  is only a part of the solution. The real focus has to be on maintaining rhythmic continuity of sales and marketing tactics through Q4 so each stage of the funnel has the right number of buyers necessary to achieve the Q1 revenue target. (If you don’t know how many buyers are needed at each stage you have an even bigger obstacle to revenue growth).

If it’ll take  the Board until late November or December to approve the operating budget ask for a reasonable baseline budget well in advance so you can commit to January-February programs.

Don’t let yourself be trapped trying to achieve a 12-month revenue number with only 9 months of runway.

Are Your Decisions Perpetuating the Month-End Sales Frenzy?

Every company, including my own firm, is working hard each day to find, keep, and grow customers. The urgency for revenue now is real.  But, I asked myself this morning a very direct question. Am I implementing strategies and tactics that are perpetuating this short-term thinking? Or, do I have strategies and tactics in place that will in good time create a consistent revenue flow?

Sometimes I have to remind myself that if I don’t want to be in a hole, stop digging! If I want to move forward stop running in place like a gerbil in a buttoned down Oxford shirt. I tell myself to stop spending all day staring at next week’s calendar and devote at least half my time thinking about 3 months from now; six months from now.

Seriously folks, the short-term thinking is rampant in many U.S. companies. I’ll say it again. The revenue urgency is real, but companies are going to stay in this short-term do-or-die mode longer than necessary if the right marketing and sales folks aren’t investing time, enthusiasm and dollars in strategies, tactics, best practices and plans that fill  the funnel with buyers and progress them through all stages.

Larger companies, as a general rule,  have less of a problem balancing short-term and longer-term revenue  thinking. Some positions or departments, by definition, have a longer-term focus than others. However, the smaller company is caught between a rock and a hard spot when the same handful of people in marketing and sales have to bring home the bacon this week and put plans in place for next quarter, too.

It’s easy for the small company to get caught with shovel in hand digging like crazy. Take a minute today and look around your office and down the hall. What percentage of the focus is going toward meeting this month’s revenue number compared to the revenue target six months from now? If it’s not balanced, better get used to how that shovel feels.

If you see that all of the bandwidth of your sales and marketing team is involved in short-term lead gen and revenue gen you have a self-perpetuating problem. The sooner you can invent a way to balance short-term and long-term revenue generation planning, the faster you’ll return to consistent growth. Look outside the box. Look outside the organization for a trusted revenue consultant who can work in parallel with your team to get plans, strategies and tactics in place for longer term results.

Do you know your sales funnel like the back of your hand, or the back of your head?

If your CEO, head of marketing, and head of sales can all agree that the following information is known than step to the head of the class.  However,  I suspect that you won’t pass the test, meaning your company is like 90% of other B2B companies that are:

  1. Struggling to align marketing and sales,
  2. Struggling to hit their revenue numbers,
  3. Struggling to develop a believable plan and budget for 2010,
  4. Struggling to achieve a comfortable level of transparency into the sales forecast.

Often you’ll know:

  • The size of your market
  • How much revenue you need to generate out of that market

But do you, or the team, know:

  • How many deals you need to close each month?
  • How many proposals that will take – for each month of 2010?
  • How about first meetings (you know the one, the “Hi, thanks for making the time, tell me about your business”)? How many do you need in month 1,2,3 and next year?
  • And how many leads will that take from Marketing, and how many must Sales generate itself?
  • How about the market? Do you know how much of that market you need, and whether (and how tightly) you can (or must) focus?
  • Does everyone in Sales, Marketing, Finance and Operations have the same view of these numbers? Or are there disconnects?
  • How do these planned numbers compare to your current numbers?
  • Which of these do you know, and which of them are gaps in the understanding of your funnel?

So, how well do you, and your team know all of the numbers, and what does the future hold?
You need to have a simple, single model of your demand for 2010 (and beyond), outlining
your total funnel – top to bottom.

If you’re wondering where the gaps are in your ability to plan and execute a revenue plan effectively contact me. As a certified Funnel Coach in North America for MathMarketing there are many ways I can be of service to you this year, and some are even free.

My colleagues at MathMarketing in Melbourne have a nice habit of hitting the nail on the head when it comes to discussing funnel management, revenue planning, and marketing training, which is why I boldly lifted the above (in italics) from their literature. Thank you, mates.