It’s getting harder to generate revenue. It’s even harder to identify ‘Revenue Leakage.’
Revenue Leakage is when your company is losing revenue without visibility into why. The focus of this blog is about the proactive steps to take to eliminate this leakage for both ‘net new’ and ‘renewal’ sales cycles. Revenue Leakage is truly sales enemy #1.
Step 1: where do you look for Revenue Leakage? Every company has a defined sales process, and an accompanying sales methodology. Your sales process is neither the culprit, nor conduit, for Revenue Leakage. To identify where Revenue Leakage is happening requires ‘looking under the hood.’ Minimizing leakage is accomplished by ensuring you capture the right CRM data at each sales stage. This requires determining those specific data metrics by opportunity and sales stage that have the highest impact on winning. These will include objective data capture such as:
- Segmentations: company type, vertical market, and geography
- Attributes: product mix, opportunity size, and number of users
- Performance Metrics: sales stage, contacts, and days-in-stage
- Behavior Metrics: close date changes, stage skipping, and price changes
Step 2: identify any key missing data elements that you are not currently capturing across your defined sales process. Optimizing revenue performance is directly related to establishing the MVD (minimum viable data) required by opportunity to be captured in your CRM platform. It’s about doing more with less and eliminating those data fields that have no meaningful impact to sales success. Taking this step will ensure sales teams are focused and accountable for keeping the MVD timely and accurate across your lead, contact, account, and opportunity fields.
Step 3: leverage your findings from Step 2 to define your optimal opportunity profile (OOP). Your unique OOP identifies those attributes and metrics where the company has the highest propensity to win, versus lose. Apply your unique OOP to highlight all misaligned opportunities in your pipeline that need attention. Create reports that identify those attributes, metrics, and sales behaviors that are misaligned so managers and sales teams can take appropriate, proactive actions to correct.
At QSS, we have worked with 200+ companies since 2014 to act on this knowledge by implementing our 4Rights methodology. This methodology ensures these companies are rigorous and disciplined in their pursuit of the:
- Right Opportunity: ensuring sales teams are working on the right opportunities (OOP)
- Right Stage: alignment of the buyer journey to your sales process
- Right Close Date: buyer process equates to purchase timing
- Right Value: clients return exceeds the investment in time, energy, and expense
Bottom line: every business suffers from some degree of Revenue Leakage. History suggests this leakage accelerates during economic downturns. Your ability to stem this potential revenue loss is directly related to identifying and understanding the sources.
The 4Rights is a proven antidote to curing Enemy #1 – Revenue Leakage.