Does Your B2B Revenue Model Need an Overhaul or a Tune-up?

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To be successful at growing B2B revenue, you need to first define the scope of the challenge. Sometimes you go to the doctor with an issue, and he or she says something like, “You need to lose a few pounds, so cut back on the sugar.” At other, less fortunate times, your doc may say something such as, “We found a serious problem, and we need to put you on an aggressive treatment program right now”  (“stat,” in medical vernacular).

We rarely treat marketing and sales issues, and the need for revenue growth, as a life or death situation; however, to your company and mine, the concept is the same. There is almost always something we can do to improve revenue health. But the big question is – are your challenges chronic, because they have been occurring over a long period of time, or are they acute – because they are now severe or intense?

We often let the chronic problems go and learn to live with less than our best. In this case, the acute problems are sometimes more helpful because they force us to confront the issues. With medical problems, very poor health can lead us to make changes that propel us to better health. Exactly the same is true in our search for revenue. Crisis points can become growth catalysts.

Just to add to this point, there are companies who were riding high and considered to be almost unbeatable industry leaders; yet, they had chronic issues that were not properly addressed. Examples of such companies include Blackberry, Word Perfect, Blockbuster, Xerox, Myspace, AOL, and Yahoo. All of these firms, and hundreds/thousands of lesser known examples, had chronic issues to start. When not addressed, they turned into acute conditions that could not be overcome.

Here are six questions we take our clients through when determining the scope of their revenue growth effort. Spend a bit of time considering your answers because it will help as you read through the action steps to follow.

  1. What is your current trajectory? By trajectory, I mean the path you are on and whether you are going in the right or wrong direction. Trajectory can be expressed both in qualitative and quantitative terms. Do you feel confident about where the direction of your company is going, or do you have that gnawing feeling that you are off course? Are your key performance indicators (KPIs), like revenue growth, average transaction size, profitability, sales conversion rations, opportunities, leads and awareness on target or starting to decline?
  2. Is your B2B revenue model aligned with the future or the past? I recently read an interesting AdAge article about Scott Olrich, CMO of DocuSign. Olrich talks about how he is always thinking not just about where his company is today, but more importantly, where his business category is going. Olrich is correct in that failure to look forward can be an anchor on success. We saw this in the software industry. Many software companies neglected the shift to the cloud (then called SaaS) until swifter and more flexible start-ups took a huge market share away from the once-mighty giants.
  3. Is your branding stale or fresh? Good branding is a hallmark of an effective marketing and sales program, and we have seen many examples of companies that benefited from a rebranding exercise. But how do you know whether your branding needs a refresh or a redo? Here are a few questions to complete a quick self-diagnostic on the relevance and freshness of your brand:
  • Is our brand crystal clear to prospects?
  • Are we differentiated from our competitors?
  • Are we perceived as we want to be?
  • Does our brand reflect where we have been or where we are going?
  • Does our staff feel proud of our branding and messaging?
  1. Do you have the right team on board? I hope that you have the best people to get you to the next level of revenue growth; however, if your current team is lacking in attitude or aptitude, this is an area you will definitely need to address sooner rather than later. It is particularly important to make sure any team additions have not only good technical skills, but also valid experience in your forward-looking business model.
  2. Do you have a solid lead-to-revenue (L2R) framework? Your L2R framework consists of all the processes, tools, and people involved in each step, from initial awareness to close of the business. You should not only document each process, but capture relevant metrics such as cost per sale, lead conversion ratios, close rates, etc. Much more about this later.
  3. Are you willing to make necessary changes? This is perhaps the most important question of all, and the above questions are not worth pondering if you are not willing to take action based on your answers. Whether you need a B2B revenue model tune-up or a transformation program, waiting for better results to occur without action on your part is just a form of “magical thinking.”

Whether your needed change is of the short-term, tune-up variety or a complete transformation of your brand, revenue model and lead-to-revenue framework – things do not get better by themselves. Act now; get on the right trajectory, and reap the benefits.

Note: this article is based on Christopher Ryan’s newest book: The Expert’s B2B Revenue Growth Playbook: Actionable Strategies to Make Your Business Soar

2 COMMENTS

  1. For evidence of the need for overhaul, I’d look first at consecutive quarters of negative company revenue growth, consecutive quarters of negative industry growth, and regulatory, technological, or competitive forces that portend rapid obsolescence of the business model. Otherwise, as you point out, short of an overhaul, there is almost always something that can be done to improve revenue growth – and probably always.

    In every company I’ve sold for or advised, I have found the kernel of ossification embedded in the original business model. This is nature of strategy formulation, when long-term technological and resource trade-offs are made. Those trade-offs might provide a good revenue ride for a while, but they are also vulnerabilities that can be exploited later on. Sometimes they are subtle, and sometimes they hide in plain sight. You mentioned Blockbuster. Their late fees were an enviable cash cow, but the company executives got drunk on the profits, and by the time they woke up to the reality, it was too late to pivot (or overhaul) the business. The Netflix strategy had already sealed the Blockbuster’s fate. The companies that endure understand how to adjust revenue strategy in response to emerging forces. In Blockbuster’s case, there was measurable risk in undermining their late fee cash cow, but their risk was not fatal as their insistence on preserving it.

    I’ve found hubris among the greatest risks for revenue problems. Based on your examples, and others I have witnessed, CXO’s need to be especially aware that bad things happen when management is self-satisfied that things can’t be any better than they are right now.

  2. Andy, thanks for your excellent comments. Agreed that almost all companies can use a tune-up and also your criteria for when an overhaul is needed. And yes, hubris and rigidity are factors that prevent many companies from hitting their revenue stride and in extreme cases, can put them out of business.

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