• John Butler

Closing Revenue GAPS

We're now at the beginning of Q4 for 2020 with the ritual of negotiating and eventually agreeing 2021 revenue targets. A task and phase of the year that most of us don't enjoy that much.

Many of you are still getting the compensation plan to support the overall plan (not and easy task), distributing the quota agreements with the reps and finalizing the quarterly numbers, calculating the productivity growth for newly hired reps, and/or partners and distribution of expected revenue over the year. Oh yes, and differentiated net new, verses same account revenue growth and listing all renewals by account and date of renewal expectations. The list goes on but you get the idea.

The objective of these plans is to facilitate the collective decisions and get alignment around which changes should be made and what will be different from last years actions in order to ensure planned increased expectations to top-line growth will be met. Sounds simple but for those of us that have done this many, many times - we all know it's not.

With a new set of revenue targets. based on questionable, and likely changing assumptions, questionable quarterly ramps, new commission plans, new product and services promised (but suspect to delays), new reps hired or fired, strategic marketing initiatives, the latest new (and improved) demand generation tactics planned and the list goes on - you get the picture.

The one consistent reality facing the sales and marketing team is that the revenue number usually appears to be exceptionally aggressive and challenging for those responsible for actually having to execute those plans.

If your confident that you have a healthy pipeline, sales and marketing synchronized, the team is executing with precision, and hitting/exceeding the numbers for the first few months then you're likely off to a very strong start to the new year.

However, if actual results aren't tracking to expectations, and the potential for a revenue gap between your current state of growth vs. future expectations is already becoming apparent, then it's likely to put you in a hole as early in the New Year.

So the next big question is how to determine and agree upon which revenue levers should be pulled in order to close the revenue GAP?

What changes to existing strategies, revenue driver initiatives, investments and resource deployments will optimize the opportunities that will accelerate top-line revenue enough to close the impending revenue gaps?

Where are the leverage point’s that will move the dial, and how do we collectively validate these critical assumptions?

The honest answer is - No one really knows!

How could they? In their daily routine most have different roles and responsibilities that they're focused on in a narrow and particular area of responsibility. They come together once or twice a year (maybe) to do strategic planning and perhaps have an offsite or two, with lots of PowerPoint presentations and really try their best to figure it all out. But often teams leave these meetings skeptical and not totally aligned with the suggested alternatives that will produce the results necessary and in the time-frames determined.

So how do you get everyone on the proverbial same page with regards to a collective plan that has enough evidence to drive confidence, buy-in and conviction? One that helps the team see their entire end-to-end revenue system and gives a holistic perspective and validation to the potential solutions. A methodology where organizations can test and rationalize the pros and cons of various initiatives that will produce optimal results.


  • How do you test and validate all the assumptions supporting your plan?

  • Ensure assumptions are finally agreed to, at every step of the plan, by all key stakeholders who have to execute on those assumptions. (if not then the rest of the plan may be doomed, as you continue to pile on new assumptions on top of the already flawed and inaccurate ones).

  • How do you test and measure the potential cause/effect of the initiatives being considered before you begin to initiate them?

  • Which actions, initiatives, investment in time, money and organizational efforts will yield the greatest impact, on revenue results over a specified period of time?

The honest answer (again) is - No one really knows.


Because there is no real way to quantify and measure future revenue outcomes other than using traditional methods such as spreadsheets, which are hard to follow, have many mistakes, don't do well with calculations over extended periods of time, and are painful to go through in group settings.

Without a more sophisticated method of mapping and modeling your total revenue system (from first touch to happy end-user) you’re just not able to understand what really will move the dial.

The Guessing Game

In reality a lot of what really takes place is a lot of guessing, posturing, politics and departmental negotiations or top executives dictating a number that has been passed down from the board or investors. This isn't necessarily bad, it's just human nature and part of being in a large organization. It's complicated, hard work, and there is no single point of reference for everyone to use as the baseline for making fact-based decisions.

But 'WHAT IF'...

  • You could map your end-to-end revenue system - from the first touch to happily retained customer and list, index and validate all the assumptions that go along with each of the steps in the selling/buying cycle.

  • You could then test and validate these assumptions that support your growth plan in real time for up to 36 months.

  • You had a vehicle that computed what you should do more of and what you should do less of?

  • This tool was able to break it down to show what 20% of focused activities would drive 80% of your future results?

  • This tool could show you all of this along with the entire team observing and participating so that collectively, you could see what would and would not move the dial, improve buy-in and validate future results before you had to begin implementing any changes. AND DO ALL THIS IN REAL TIME!

Revenue Control Panel

At Revenue Factors, we put revenue modeling capability directly in the hands of executives with advanced simulation technology that allows you to 'collective' calibrate business factors and measure their impact on future revenue growth—in real time. It calculates revenue impact results for one to thirty-six months.

Factors can be continually re-calibrated until an optimal portfolio of initiatives are determined that will lay the foundation for an effective, sustainable revenue plan. With this tool companies are able to map, measure and validate the key factors that will optimize your revenue growth. The Revenue Control Panel™ simulates and optimizes the effectiveness of infrastructure, sales, and marketing plans—before you fund the.

This is a valuable tool for those interested in testing and verifying (ahead of implementation) their revenue assumptions. It also helps the team to map all steps in the process and get everyone (literally) on the same page with regards to the key steps, timing, sequencing of activities and assumptions for all the critical triggers in the sales/buying cycle.

It forces the right discussions around such fundamental factors and key assumptions that drive future revenue growth such as:

  • What activities will drive new client and/or customer conversations

  • What are the assumptions for the investments needed to be made and how will that improve our % of deals in the pipeline.

  • Number of new leads per month

  • What is the percentage close of each rep that as been assigned and inbound leads in the past and how do you improve it?.

  • Transit times to reach each new stage in the pipeline

  • Assumptions around the lead leakage rates

  • Lead conversion rates (lead to suspect, suspect to prospect etc.)

  • What and when is a new lead considered a Qualified Sales Lead (QSO) and how do we collectively define a QSO?

  • What is our assumption around the date of new product introductions?

  • How fast will new products ramp (at what point will they reach the revenue volume that are in our annual projections),

  • What pricing changes (and timing of those changes), competition, market factors, are we're considering and how will those effect our results over a sustained period of time?

  • What are our assumptions around how fast a new sales rep and/or partners will ramp to full productivity.

  • What is our projected qualified lead to quota ratio? How will this be tracked in the CRM system by rep, district etc... to ensure we're on track.

  • What key activities will yield the most predictable and fruitful results

The list goes on and can be customized with your particular key factors, but you get the picture.

With the Revenue Control Panel the various levers of growth can be adjusted to any combination you can think of and deliver accurate revenue impact results in real time.


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