Council Post: Six Factors To Help You Ramp Revenue In Your Business

CEO of Novus Laurus. Business and transformation strategist. Digital technology, film and food investor.

As an investor, I see plenty of proposals wanting a marketing budget, sometimes with no sales yet. As a consultant, I see huge marketing dollars spent, often without a high or even a clear contribution to sales. As a strategist, I loathe seeing marketing and sales pointing the finger at each other when revenue lags. The real question is always: How does one optimize effort and ramp revenue?

Should a founder or CEO beef up their sales efforts, their marketing efforts or both? Are there phases in the evolution of a company where the answer may vary? What factors most influence revenue being pushed through the complicated marketing and sales pipeline?

Getting customers from one end of the pipeline to the other is a struggle. There are different resistances in the pipeline at various points. However, you can nudge the pipe at different points. And every nudge has an expense and effort associated with it. How can you make throughput on this pipeline efficient? 

Here are the six most important factors across marketing and sales to understand and master as you attempt to move more customers through your pipeline: 

1. Understand the buyer intimately. Everyone talks about understanding the customer, but few connect it fully to the pursuit of revenue. If you do not know what type of buyers have a need, budget and urgency (or NBU) for your product or service, your sales are chancy at best. If you do not have valid answers to all possible objections from a buyer who needs your solution, then you brought a blunt knife to a laser-sighted gunfight. If you do not know how to find large numbers of buyers who have an NBU, then you might as well throw away your marketing.

You cannot sell — and you definitely cannot scale — until you have the above in hand. I’ve seen startups fail to grasp the first step and established companies falter as they pass the buck on steps two and three. This first step is foundational to set up regular revenue.

2. Smooth the end of the pipe first. If a buyer has been nudged through your pipe all the way to actively considering your solution but changes their mind just before buying, then all your money and effort bringing them that far is wasted. If your sales closing ratio is zero or lower, you are almost definitely losing more money than you are making.

Industry standards suggest that a closing ratio of around 20% is reasonable. Whether you have a sales team or e-commerce sales or both, ensuring a great closing rate is an important second step. I’ve found that many startups believe if they simply put information out then sales will happen. For larger sales, marketing hands off leads to sales. In either case, closing sales needs to be practiced and maybe even automated. It should not be left to chance. Marketing and sales are working well if you establish a sufficient and slowly increasing closing ratio.

3. Market only to the interested. Dollars spent by marketing to raise awareness should be refocused. Either there is awareness of a problem and demand for a solution or there is no market yet. Building demand and behavior for a new market are the province of startups, product launch and culture change and should focus on early adopters and enthusiasts. Set that as a separate effort and budget.

However, to sell at scale, you must focus only on those who actively seek a solution. Selling to that intent is much more efficient. Find prospects who search for a solution and have a budget and urgency. Give them the details, comparisons, special pricing, terms and answers they need to buy your solution.

4. Skinny up the funnel quickly. A funnel is a pipe with chancy catchment. Many factors such as the above three control whether you have an inefficient funnel or a fast pipe. If you understand who buys, how to talk with only those interested and how to close, then the only other factors left for efficient sales are NBU and quality or procedural objections.

Set up a qualification process to determine NBU at the top of the funnel so it becomes efficient quickly. Navigate all the possible objections and catalog which behaviors produce quick sales. Set up pathways within your pipeline with answers to specific questions and objections that customers can self-select according to the information they need to decide. Convert your funnel into a high throughput pipe.

5. Attribute or bust. As a strategist, it frustrates me to watch CMOs live by a marketing budget as a standard percentage of total revenue, rather than the clarity of attribution. Such budgets are being questioned and cut when they cannot clearly show sales attribution. Although still nebulous, when attribution becomes actually provable, then spend and effort can be allocated rationally.

Attribution might be difficult in an e-commerce world, but it is possible. It is more straightforward when marketing passes qualified leads to sales. Finding marketing and sales tactics with a provable contribution to sales is paramount. In both cases, attribution reveals viable paths within the pipeline and eliminates unnecessary effort.

6. Don’t ignore customer lifetime value. Any business where your customer acquisition cost is not smaller than your customer lifetime value will perish. Keeping customers who have bought once coming back to buy again is one of the biggest factors in sustaining and scaling a company. Understand customer reactions and post-purchase behavior carefully, and cultivate sales and marketing efforts to get them to buy regularly. CLV is often ignored or sidelined by both startups and established companies. It is one of the largest contributing factors to revenue and the gold at the end of the pipeline.

Master these key strategic factors for ramping revenue in your company and you are on your way to sustained growth. Implement them in the order shown above to build startups, business units within large companies and outstanding brands.

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