Predictable Revenue: what is it, how to find it and how does it boost sales?
Selling more and better is possible through what Aaron Ross calls Predictable Revenue.
This term, in English called Predictable Revenue, is present in the book of the same name, co-authored with Marylou Tyler, released in Brazil in 2017.
In it, Aaron tells how it was possible to create a machine to make $100 million during the period in which the author managed Salesforce.
STEP BY STEP FOR DIGITAL TRANSFORMATION INTO SALES
The term Predictable Revenue is gaining more and more force especially when we talk about B2B sales.
In this following article, we talk more deeply about what the Predictable Revenue actually is.
In addition, we tell how it works and how it is possible to impact company sales.
Even because, according to him, it’s about how to make businesses – especially startups – grow.
Something to do more quickly, but with some predictability. Managing the sales structure, oiling processes… All of this has to do with successful companies and that’s what we’re talking about here.
Come on? Good reading!
Know what predictable revenue is and how it influences your company’s success.
What is Predictable Revenue?
The term is simpler than it appears to be. Predictable Revenue is nothing more than knowing how much your company will earn in a given period of time.
For example, it may take 1 year for revenue predictability. That is, it is a prediction. It is meant for, in fact, no one is taken by surprise at any time.
Therefore, based on what is already planned, a series of practices are developed. Only then can you leverage the revenue of any business. The idea is to not only have a predictable base recipe.
Above all, it’s something that works to bring in predictable leads and customers. Predictable Revenue came about when Aaron Ross decided to externalize how he created a vending machine himself.
In fact, this machine allowed a profit of 100 million dollars during its administration.
As a result, the concept was then quickly spread after its launch in Brazil.
It also brought some new perspectives on sales.
For example, one of them addresses the following. The increase in the number of salespeople is not proportional to the number of closed sales.
In other words, if you increase the sales team, it doesn’t mean that it will sell more. According to the concept of Predictable Revenue, sales will increase if the number of leads is greater.
Soon after, they need to be qualified to finally become customers. For Ross, only the “closed sales” metric is greater than the “number of generated leads”.
In fact, the way you sell is essential. Prospecting is what drives the sale. Above all, this is the focus of the methodology.
The productivity of sellers
Another point that Predictable Revenue addresses: productivity of the sales team. It is a mistake to think that the seller should be evaluated according to the number of opportunities he has.
This idea is deconstructed within the book. Aaron Ross treats this as a big mistake common to many, many businesses.
A good salesperson is not one who makes 50 calls. Or the one who sends 100 emails in a workday.
Its productivity should be measured according to the conversion rates it presents.
The Predictable Revenue Funnel
There are 3 stages of the Predictable Revenue funnel. Are they:
- beginning of the sales cycle.
First, we have the preparation. As Aaron Ross’s book covers, you need to include email triggering tools for the beginning of a relationship.
To take care of prospecting, have a team dedicated only to this mission. This way, you do not compromise your company’s sales management.
It is called the pre-sales team. After all, the seller must sell. Only.
He is the one who starts the sales cycle. And if he does this with already qualified leads, his work time is optimized.
That’s because the sales team avoids focusing on those leads that aren’t ready to buy. Therein lies the importance of pre-sales.
In any case, let it be clear that the conversion rate is the key element. It serves to assess the performance of a salesperson.
There will be no use in countless opportunities in the funnel. Since if the leads are far from wanting to buy, money doesn’t enter the company.
Cold Calling 2.0
Tired of the so-called “cold calling”, or cold calling as they are known, Aaron Ross took a test. For this, it took the term that was already in the public domain and modified the name a little.
As a result, it ended up creating cold calling 2.0. Ross thought of this concept to get away from those classic phone calls.
One where the seller, who doesn’t know you, convinces you, or pushes you a product. According to him, this is the wrong way to prospect.
So he added “2.0” to the familiar term. The idea is: don’t call people who don’t know your company.
Only contact prospects who have shown an interest in what you do in some way.
And this can happen in many ways – especially with inbound marketing techniques.
You can with the lead subscribing to your newsletter, downloading an eBook, filling out a form on the website, among others.
Therefore, the sales team only calls if the prospect has made it clear that this can happen. Otherwise, the first approach should be via email.
This is the best way to start the relationship with the lead. And how do you turn this contact into a sale?
Well, that’s where you show that you are a reference in what you do. Share quality content.
Show that your solution works for potential customers’ pains until you gain permission for a phone call.
So remember. You should only call the people you want to sell at the right time. Only after she signals that it can be done, ok?
Book Recipe Previsible, by Aaron Ross and Marylou Tyler, launched in 2017 in Brazil and available online.
9 Principles of Predictable Revenue
Aaron Ross lists 9 principles to apply his methodology. Are they:
- Be patient. It can take up to 12 months for you to have predictability of your income;
- Try it. Test approaches via email, including changing the title. Send some longer and more detailed and some shorter and smoother;
- Avoid one-off projects. The idea of Predictable Revenue is application in what can be repeated several times;
- Use a management tool. Spreadsheets won’t make you sell more and better. For example, having an Online CRM makes you have data, contacts and your entire sales process organized;
- Design your process. Make the sales flow visually clear to everyone involved. This is crucial to showing that one function depends on the other. Also, make it clear where each person’s work begins and ends;
- Focus on results. Always keep in mind that the focus must be on the return each action generates. And not the volume of opportunities;
- Measure what matters. Only the metrics that are connected to the outcome you need to achieve matter;
- Be careful when passing the baton. The pre-sales team needs to be in tune with the sales team. Especially so that only qualified leads for sale enter the sales funnel ;
- Baby Steps. One step at a time. It is necessary to evolve, but with small steps.
The time has come to apply predictable revenue.
It’s time to put the Predictable Revenue into practice
For the Predictable Revenue to make sense, you need to structure the sales team. In this way – and only in this way – you can pay attention to all the steps.
After prospecting customers for inbound and outbound , you need to have teams ready to:
- Qualify inbound leads. It’s about relating to the leads generated by inbound marketing. It creates a relationship with prospects. In addition, it shows that the company is a reference in the area in which it operates;
- Qualify outbound leads. It takes a different team to qualify leads coming from the outbound. After all, they are different jobs;
- Closers. The “closers” are nothing more than the sellers responsible for closing the deal. His work is more assertive. That’s because leads are already educated. They are mature about the service or product and ready to buy;
- Customer Success. If the customer is successful, then so will you. This team is responsible for who has already purchased your solution. She acts to ensure what has been purchased fully works for him.
Putting your hands dirty
Right after understanding how Predictable Revenue works, it is necessary to:
As Aaron Ross addressed in his work, goals should aim at predictable lead generation so that they can be qualified.
Soon after, they are ready and can become customers. Above all, always take the closing rate into account. And not the number of opportunities.
Metrics for measuring results
It is what will be measured as the goals progress. As mentioned above, the most important is the closing rate.
Soon after, number of leads generated. However, also consider the churn rate .
In other words, the cancellation fee. You also need to take it into account to predict your income. If it is too high, it will be difficult to have a predictable income soon.
train the teams
Training and more training. Always improve the speech. Update the sales playbook . Fix processes.
This is a basic primer for success in any business.
Train who prospects, who qualifies. Train who sells and who ensures customer success. Encourage agile methodology .
This is the only way to generate value for customers from the first to the last contact. Follow these steps. It’s easier to apply Aaron Ross’ Predictable Revenue methodology as well.
As a result, you boost your sales.
So, how can we help you? To learn how a sales CRM helps your company find predictable revenue: TALK TO A CONSULTANT .
If you have not understood a word of this article, visit the glossary with terms of sales .
Also, check out an article that features some relevant sales tactics .
They will help you hit your sales targets.