“Remind people that profit is the difference between revenue and expense. This makes you look smart.” – Scott Adams

One way to view what a successful organization looks like is who can take an investment of money into an organization and turn it into the greatest return possible.

Your org is given X and you turn it into Y. Sounds like a pretty standard calculation in the business world of today.

Not so fast. There is always someone who can make any situation and turn it into something more complex or harder to understand than it needs to be.

In our true, anti-consultant speak, we read up on a recent Bain study that looked at what revenue generating organizations who were maximizing the difference between Y and X and which characteristics they shared with one another.

Here are the results of the study:

Of 1200+ public organizations, across 10 industries and around the globe, only 5% of organizations were able to consistently increase the % difference between revenue generated and the investment into their revenue teams.

The 3 core things they got right?

   1. Go-To-Market Model

• Companies were more focused on what future projections looked like rather than dwelling in the past to determine where to invest their resources and dictate Go-To-Market strategy.
  • Another way of sayin’ inspecting what you expect. Using past data without incorporating projections is how to get left behind. The world and all of its variables are moving too fast to do otherwise.

   2. Productive A-Players on the Front Line

Your frontline needs to be as productive as possible. How do you do this?

• Create sales plays that are focused on data and drive results.
  • Removing as much thinking and randomness out of your frontline reps as possible, thus making them more efficient is a great start.
• Focus on highest value opportunities 
  • When value presents itself, having a system in place detailing how to prioritize opportunities will lead to greater win rates.
  • Use lower-cost methods to handle lower value opportunities (inside sales, off-shore, etc.)
• Training and Coaching Consistently
  • Inspect what you expect out of your reps. This approach leads to better performance out of veterans and quick ramp times for your new hires.

   3. Sales and Marketing Support is Done Right

• Lean is the way to go when building this organization.
• Complex processes mean that automation is needed.
• Inspect quotas to ensure the right activities are being rewarded.

So, basically, everything we’ve been writing about since the beginning of Prescriptive Profits.

These approaches need to be calculated, work off of each other, measurable and consistently inspected.

Here is a quick case study to give further detail:

In a world where every dollar counts, XYZ Company, achieved higher revenue growth by pulling on the different levers we highlighted above. First, they implemented bi-weekly recurring training and role-play sessions for all customer-facing positions. They moved from a backward-facing to a forward-focusing strategy, coupled with more specific sales plays and were able to move the needle on their most valuable deals by 12%. The last piece that they implemented in year 1 was an overhaul of their KPI’s that determined their commission structure to better incentivize revenue-generating behaviors. This led to an increase of 7% in the return on investment into their revenue organization.

Every company and every situation will be different but when looking across industries and how to make revenue organizations more efficient, these areas led to the greatest improvement.

The last piece to the puzzle would be to tie the results and milestones to different review periods, whether those be quarterly, annual or multi-year assessments. This approach brings multiple business units together to understand the requirements needed to continue the growth. It involves the finance department understanding the costs associated with these gains in both human and technical capital and IT departments being able to plan accordingly for new tech advancements or additions.

Many studies looking at economic downturns indicate those who invested in themselves during those periods came out ahead.

Make your $$$’s work for you to the highest degree possible.

Let’s get to work.