June 23, 2017
PUBLISHED BY Bruce Cleveland
Recently, I had the opportunity to sit down with a longtime colleague, Jim Hughes, founder of Quick Start Strategies, a leading-edge sales advisory firm singularly focused on ‘lead to cash’ for B2B companies. We discussed how the science of sales needs to be embedded in driving sustainable revenue growth and how companies can successfully traverse the Traction Gap—the crucial journey from initial product release (IPR) to minimum viable traction (MVT). Below I have paraphrased our conversation.
Bruce: In the Traction Gap Framework we developed here at Wildcat Venture Partners, we determined that to reach minimum viable traction (MVT), startups must develop, measure, and optimize four core competencies and that one of those core competencies is revenue architecture – the others are product, team and systems. Jim, today we are here to talk about revenue architecture and the science of sales. These are all the issues that affect a company’s business model and the ability for a company to secure awareness, engagement, and sustained usage, which ultimately enable monetization.
You see all kinds of companies, from startups to multinationals – are there any consistent observations you’ve had that support the concepts – specifically when it comes to revenue architecture – that we outline in the Traction Gap Framework?
QSS: Absolutely. Although generating traction – usage and revenue – and getting to MVT are especially acute in startups, these issues can affect any company of any size that wants to take a new product to market. The discipline—or science—of an initial product release (IPR) leading to a minimum viable product (MVP) is well established. However, for the next steps – those that lead to repeatable sales and growth – we frequently work with many start-ups with little expertise in this area or, in the case of more established companies, experience a loss of focus as the product is typically thrown to the sales team who is then told to ‘make sales happen.’ In either case, there is no track record with the product, and worse, no means of tracking and tracing the entire ‘lead to cash’ process.
Bruce: For a company – or product/solution – to reach MVT, it requires ever increasing usage rates — that means both within accounts and across all accounts. What do you do to help companies drive increased product/solution usage?
QSS: We start out by asking companies to provide us with their top 100 must-win accounts – and how they determined this list: size, industry, profile, buyer persona and such. Next, we want to know about their guiding metrics and KPIs for measuring sales success. If they don’t have formal answers to these two questions, we convene a short workshop to define them. Every company has the answers, but more often than not it just needs a bit of polish.
Once we have these ‘must wins’ and the metrics and KPIs for success, we then take and modify one of our playbooks to create internal alignment and to generate an external engagement campaign. This phase is all about establishing clear go-to-market use cases and internal WIIFMs (what’s in it for me) for the team. We then analyze and leverage the data to create profiles of companies and personas of business influencers so the company can standardize and replicate a formula for success.
We highly encourage the companies we work with tell their sales teams to systematically engage with their customers. They must constantly and consistently interview customers to understand the value gap their offering fills. Then, they must “Value Engineer” their solution (this is our term for working directly with “must win” prospects, identifying top uses cases, and quantifying the value of the company’s solution) to ensure the problem they satisfy transcends from a ‘nice to have’ into a ‘must have’ and that the sources of value are detailed, documented and tracked.
We feel we did a great job of this with Blue Jeans Network, the cloud-based provider of video conferencing and collaboration tools. To differentiate Blue Jeans from competitors and to drive adoption in key industries, we used our Value Engineering process to help them establish meaningful business value and compelling businesses cases tied to each prospective must-win account.
Bruce: You talk about the need for rigor and discipline in managing sales. How do you apply rigor and discipline to optimize the sales funnel?
QSS: Optimizing the sales funnel is key to not only meeting revenue goals, but also to creating a reliable forecast. We focus on the DNA of all leads and look for attributions and correlations throughout the entire ‘lead to cash’ lifecycle. We find many companies abandon a lead’s attributes once it is converted into an opportunity. By establishing a more holistic analysis, there is not only improvement at the top of the funnel (qualification, discovery), but also the ability to accelerate volume and velocity through the middle of the sales funnel (proposal) and the bottom of the funnel (negotiate, close). By constantly monitoring the DNA of each converted lead-to-opportunity you can ‘qualify out’ weak, poor quality opportunities early, and refine the profile and persona attributed to the right opportunities. This is how we focus on the ‘science of sales’ and apply continuous discipline throughout the sales process.
The process we have developed and use drives sustainable revenue growth for companies by:
· Connecting guiding metrics and KPIs from ‘lead to cash’
· Aligning and documenting the buyer’s journey to the sales process
· Pursuing the right opportunities, at the right stage, with the right value, and the right close date
Albeit easier said than done, applying this science and discipline results in a streamlined, fast-moving, and predictable sales pipeline.
Bruce: Thanks for sharing some of your revenue architecture insights, Jim. It’s clear that you and your team’s experience focusing on the science of selling – with a clear and repeatable process – pays off. Like you, we find again and again that revenue architecture is typically the least well-thought through of the 4 Traction Gap core architectures. And, unfortunately, this is what leads to the 80%+ failure rate for start-ups. By sharing your – and other’s – perspectives and experience with start-ups and large companies alike, we hope the Traction Gap Institute can make a positive impact and reduce start-up failure rates.
View the original post on LinkedIn here.