Our Priority: Build Predictable, Sustainable Revenue

I refer to myself as a revenue growth consultant. By assisting B2B companies generate sustainable revenues, I fulfill my purpose in business. It's what I know best and enjoy most.

A revenue growth consultant is a service professional focused on generating sustainable growth for clients. Many areas of business require growth focus; many growth-consulting firms fill the need.

My clients see me as a professional architect of growth initiatives enabling them to achieve their best, more effectively. It's all about helping companies reach their full growth potential.

My specialty is sales growth, using marketing and sales processes as my tools. However, I cannot focus solely on increasing sales revenue; I must work to increase a company's capacity to sell more so that the revenue stream sustains itself. Every company wants to leverage its sales expertise to rev up the revenue engine and build the infrastructure to support long-term growth.

Arguably, one could revenue is all that matters. However, it is not that simple today. Building revenue represents an intricate web of influences and actions that stretch beyond the act of making money or earning a profit. It involves strategy, structure, people, and process. It also involves brand esteem, customer loyalty, corporate citizenship and thought leadership.

Yet when I discuss growing revenues in prospect meetings, the first thing I hear people say is: "Well, the answer is to increase the sales force." They believe adding more reps to the team will boost revenues. "I see this strategy repeated to the point of banality and unfortunately it often leads to deeply disappointing results for the CEO."

And many times, it costs sales leaders their jobs. Growing the salesforce to improve the bottom line seems to make common sense, right? Well not exactly. Here's why.

First, what impact does the CEO and sales leader envision with the "add salespeople" strategy? They believe more salespeople will acquire more new accounts; they anticipate higher revenue. These added reps may be deployed in new geography to broaden the company's footprint or added within the existing footprint where the company can reduce the number of accounts per salesperson.

Then, those reps will invest more time to cross sell or upsell more offerings.

The strategy is flawed. Increasing the number of salespeople is setting yourself up for disappointment. Too often, the anticipated financial growth falls way short of expectations. For several reasons.

1. Unrealistic ramp-up time associated with the expected results. It may take six months for salespeople to reach full potential. But the company calculates the expected new revenue into the budget too early.

2. Unanticipated expenses of adding and supporting salespeople. New salespeople require considerable training and coaching, leading to higher cost of sales.

3. Unanticipated risks of hiring the wrong salesperson. I am continually amazed that companies do not use many of the personality and capability testing tools available to ensure that new hires possess the right sales DNA and fit the company culture. A second risk comes from a failure to establish an efficient onboarding process to accelerate ramp-up. A third risk is a misalignment of salespeople, accounts, and territories. It takes a highly diligent sales leader to stay on top of the changing dynamics of people, process, and places.

Let's set aside the add-salespeople strategy for the moment and jump right into areas that can drive revenue growth immediately. Then I would like to focus on the long-term strategy for sustainability.

Beauty of Picking Ripe Prospects

Your existing customer/clients provide the fastest, smartest route to more revenue immediately. Depending on the study or industry, acquiring a new customer costs five to 25 times more than holding onto an existing one. If you serve your existing relationships well, you won't have to go out into the cold market to cultivate new ones.

Research done by Frederick Reichheld of Bain & Company indicates that if you increase customer retention rates by only five percent, you can drive up profits by an astounding 25 to 95 percent.

Your current customers or clients trust you and already buy from you. Explore more practical or profound ways to serve them.

When you succeed, you'll increase the average transaction size or increase the buying frequency, or both.

To achieve this enviable goal, you must increase the "perceived value" of what you offer. You must educate your customer/ clients on this value to plant the desire and momentum needed to harvest larger and more frequent buys.

Nine Action Steps

Consider these nine ways to increase the average purchase size and sales frequency and spark more revenue:

1. Increase your prices. A straightforward way to increase revenues is to increase your current prices. Be careful, as you are most likely selling in a competitive market. Make sure your contracts cite a built-in inflation price increase. It's important to sell value, not price. Don't get hung up on what the competition is charging. The more value you can show, the better. Train your salespeople to look for the undiscovered need, the one overlooked by everyone else. In later chapters, I discuss how to do this and sell value and avoid the dreaded RFP (request for proposal) process.

2. Upsell. Carefully assess client needs and match them to products/services designed to create an optimal buying experience and satisfaction level. I discuss later why selling strictly to customer/client needs may not be the right approach. The MERGE process teaches you how to understand your buyer's vision for a solution and attach your solution to it. This effort differentiates you and helps you increase revenues because you educate them on the value of buying a higher-end product/service. Think car dealerships. You start with the basic car you need; then the sales process opens to custom wheels, leather interiors, service warranties, and more.

3. Cross-Sell. If you offer multiple product lines or service lines, educate your customer/clients on the full spectrum of your solutions,...