Rick McPartlin founded The Revenue Game to help companies focus their organizations around the critical function of revenue generation. His columns are featured under the “Business Toolbox” tab on our website, www.vbjusa.com.
Every day we are told how to learn about running a business from sports examples, and that works in a lot of cases. However, one big difference is that the “business season” never ends. For every sports team, there is the chance to change everything after the season ends.
Fire, hire, draft, install a new offense, improve the defense, spend more or spend less – even moving cities is an option. When the next year starts, everything is new and different. Business doesn’t work that way. There is no offseason. There is no new season. Our brand and client relations carry from tonight to tomorrow’s opening bell no matter what.
Many companies appear formidable in a great economy or because of a great product. They hire lots of people, rent or buy big buildings and declare that they are successful. Then, one day, the world changes and we don’t need Betamax; eight inch floppy discs have no demand; VOIP has replaced traditional phones; the Japanese can sell trucks and luxury cars; unemployment is up while the market is down; and the housing market has collapsed.
Each of these was a bubble, and every bubble will burst.
In sports, when a bubble bursts and the quarterback is hurt or the leading scorer gets a better offer, we wait for the season to end and retool. When a business bubble bursts, the business still has a cost structure, an organizational structure, a culture, a brand and a market impression that does not go away.
If the costs are too high, there are too many people, the strategy is random, the focus on customer service is lacking or the brand is random, then the business will need time to change before the season permanently ends.
The business rule is “if it ain’t broke, don’t fix it,” and that means I will keep doing the same thing until the bubble bursts.
Industry after industry had their bubble burst (cars, housing, electronics, clothing, etc.), and millions of people lost their jobs, their companies and savings.
There are at least two groups that would benefit from change. The first, is people who are greedy and try to get something for nothing during the bubble. This is one we will have a hard time helping, but we can avoid investing in or working for those companies.
The second group is made up of those who want to take advantage of the bubble to build a great company and make a lot of money (during the bubble) while laying a solid foundation for life after the bubble. This second group is really easy to help and leads to great companies.
The way to create those great companies is the application of “revenue science,” starting with five questions and then, a revenue roadmap with metrics. These will make sure every company is both producing and receiving value that will transcend the bubble.
Get your team to answer these questions:
- What is our brand promise?
- What’s the customer “problem” that we solve that no one else solves?
- What niche(s) do or will we dominate?
- Who is our ideal customer?
- What are our key offers for dominating the niche?
If you don’t have deployable answers to these questions, you are at great risk. As soon as the bubble bursts, your season might end forever.
The critical metrics for the revenue roadmap functions are also simple:
- Do you have a predictable way to get the right number of the right type of leads for sales at the right time?
- Can you predict and impact the sales cycle, the percentage of sales victories and the sales margin?
- Can you grow repeatable business from current/past clients?
- Will you deliver what your clients ordered on time, on budget, with expected customer satisfaction and margins while growing the amount of repeat and referral business identified from the delivery team?
- Can you manage questions 1, 2 and 3 as a system for growth and continuous improvement?
- Deploying the combination of the five questions (which creates your “True North”) and the revenue roadmap will give you control over your business to expand, modify and scale.
With these in place, you will have a long season because you are in control. Without these, you look for an exit before your season ends forever.
Do yourself a favor and include these things in your game plan so you don’t have to worry about your season ending forever.
Rick McPartlin founded The Revenue Game to help companies focus their organizations around the critical function of revenue generation. He has held senior executive positions and consulted for many Fortune 500 firms and small companies alike, and he’s shared his passion for “revenue generation as a science” for more than 20 years. Read more of his columns on our website at www.vbjusa.com/business-toolbox/inside-track/the-revenue-game.