At some point in a company’s growth, the inbound only, USA only, inside sales only revenue model starts to run out of gas. I have seen this a few times, and it is a function of:
- size of the market
- growth rate of the market
- your revenue relative to the size and market growth
- market maturity using Crossing the Chasm nomenclature
- product reputation
- keyword volume that is relevant to the market
The better management teams will be attempting to predict when this will happen, or will at least have some alternative strategies already in place so they can ramp up additional channels to keep revenue going. All too often, the CRO is left on their own to solve this issue, when in fact, it is a cross company issue to get additional revenue streams going.
A partial list of incremental revenue streams available to B2B company might include:
- channel – if appropriate add some resellers, consulting partners, maybe systems integrators
- enterprise motion – roll up larger deals
- customer expansion – more seats, licenses, products. Get your accounts to eat more.
- new products
- education – free vs. paid. usually room for both
- outbound – targeted account penetration to specific accounts
- new geographies – expand to other geographies and languages
As a marketer, here are the 10 things you should do to successfully transition marketing from a one trick revenue Pony (do Ponies take offense at this I wonder?), to a multi channel revenue machine.
- Revenue alignment – the CFO, CRO must be tracking revenue segments the same way. Ownership for particular revenue segments must be reportable and accountable to specific people on the sales team. Once this occurs, you can then assign these revenue streams for ownership in marketing. Pay particular attention to compensation plans. Sales team will do the easiest path to revenue which makes sense. A revenue goal of growing the installed base revenue by 20% doesn’t really matter if the sales team isn’t paid as much on installed base revenue as they are on new revenue. A plan to hit $100M in ARR that relies on $30M in expansion revenue, yet no team has this as a goal will be tough to hit. And if finance can’t track any of this, you are going to have hard time aligning people to the goals. Alignment, alignment, alignment. Finance to sales to marketing. Once it is assigned to someone in marketing, they need access to resources to make it happen. It is easy to overlook these new segments when the majority of your revenue might be coming from inbound. Consider organizational changes to give the people responsible for the new revenue stream a seat at the CMOs table.
- Hiring targets – BDRs get applied to a lot of situations. Most don’t work. Adding extra steps to qualify leads for low ASP sales models is one example. If you are in one of these models, my condolences. But even in high ASP models, BDR plans can run amuck. Make sure you run the spreadsheet models to understand the required staffing levels based on current conversion rates required to hit the revenue goals. If you have 20 BDRs, are you really going to add another 20 to hit a revenue plan? Maybe, and if this is the plan then great. Now factor in recruiting time lag, training ramp up and see if the plan is feasible. Then see if you have the lead volume to keep them busy.
- Geographic saturation – it is so easy to add reps in North America if this the headquarters that many organizations will forget the fact hat North America might not even be the largest market. So while you are trying to figure out how to support a sales rep whose territory is a zip code in Oklahoma (sorry Oklahoma), Italy is uncovered completely. The US isn’t the largest market for a lot of products anymore. Adjust your revenue strategy accordingly. (see #8 below on thoughtful expansion)
- Brand – while brand isn’t as important early on (some might disagree), as the company grows, the brand image is more critical. Invest appropriately as more and more people will make buying decisions based on reputation and brand. The key is to invest in the brand at the right time.
- The end of tribal knowledge – the best companies should have been building their internal knowledge and training systems all along. You can’t scale revenue if people don’t have the information at their fingertips to get their job done. A good internal Wiki is key. It won’t always be perfect, but it should have enough info in it for an employee to get their job done. Similar to this – marketing training. Every week. Marketing is so complex, you have to constantly train and spread knowledge on your team.
- Long live team leads – every time you add a manager, you are adding someone who doesn’t do front line work. Managers should be painful to add since you have to trade off output for better process efficiency. A good interim step is to use team leads as needed. As the leader of the marketing org, you can set the example by pushing yourself to keep the span of control wide, and the depth of the org chart shallow. More managers don’t necessarily help.
- Thoughtful geo expansion – “We have to go to ANZ” said the CRO. Why? Well she knew someone there who was a great reseller. Seriously? These type of geographic expansion issues happen all the time. Use numbers to drive expansion – notably inbound traffic numbers are a pretty good indicator to market interest. Picking which geography you are going to move into based on prior behaviors is the worst way to make a decision. The ANZ one is particularly painful. That is a big land mass, they have cool accents, it is a great place to visit. But for some products, the market is super tiny. You are better off biting the bullet and looking at other economies. There is nothing worse than having little inbound interest from a region, telling the CRO that, watching them hire for that region, then you start getting on calls to talk about lead generation for a region that made no sense to go to in the first place. Sorry ANZ. Expand by the numbers, not feelings.
- Built in resiliency – As the organization grows, you have to build in some resiliency on the team. The revenue generation machinery is just too important to slow down if you lose a team member. Make sure you have managers that can step into the shoes of their directs if needed. If that isn’t possible, make sure you have access to outside agencies or contractors if needed. Finally, if this is just not feasible, consider over hiring for a few select roles to give you this resiliency. If the company is growing, the work will fill this persons role. Roles that are tough to fill temporarily with agencies and contractors require a lot of local, company knowledge. Pay attention to product marketing, your front end web designer, and SEO specialists.
- Wipe out the bureaucrats – I know that isn’t very nice, but how many times have you seen a marketing team of 20 people only able to produce the output of a team of 5 people? When the company started, one person did all the work. If you built the team correctly, you slowly kept dividing tasks out so that one person owned one part of marketing. You might have had one SEO person or one events person. Where organizations get tripped up is when people get octopus arms and think they have to be “in the loop”, “cc’d”, stakeholder aligned on everything that happens (these are buzzwords I look for in interviews). You ran a blog before with 1/10th of a person, why does it now take one person to write it, one person to check it for messaging accuracy, one person to copy edit it, one person to publish it? Don’t go down this path. You certainly want a blog that is well written, on message, and published professionally. Rather than making this one job a job for five people, invest in the tools, processes, and training so that one person can still publish a blog on their own, to the higher standard that your now bigger company requires. Consider using outside contractors for specific, non-critical steps, like copy editing. But don’t take the job of 1 person and spread it across five.