Is the notion of “predictable revenue” helpful for your enterprise software business? The answer depends on your answers to 3 yes or no questions. But before I jump into these questions, I want to make sure you and I share the same understanding of “predictable revenue”. By “predictable revenue” I am referring to a book written by Aaron Ross and Marylou Tyler – “Predictable Revenue: Turn Your Business Into a Sales Machine with the $100 Million Best Practices of Salesforce.com“.
I am skeptical it is. Let’s move onto the 3 questions you need to answer before you buy the book, meet with your senior leaders, and advocate rolling out the tactics Ross and Tyler lay out in their book.
- Haven’t you been tracking revenue and estimating what your sales team will sell over coming periods of time-month, quarter, year, 2 years, etc?
- Every business needs growth, but have you been pushing your senior leaders especially hard on growth?
- Do your sales and marketing teams use either Salesforce.com or HubSpot as their CRM?
You answered “yes” to question 1
Great. Here is another yes or no question for you: Does the following sound familiar? “My business has been around for five years. I’ve run it over Excel Spreadsheets from the beginning.” Whether you know it or not you are already predicting revenue. You need to ask yourself why you need Ross and Tyler’s tools.
You answered “yes” to question 2
Great. Here is another yes or no question for you: Will the tools Ross and Tyler present in their book enable your senior leaders to accelerate growth? If you have been building your business for 5 years you might get more out of reframing your problem than you will from Ross and Tyler’s tools. Not familiar with the notion of reframing? You should read a book I recommend: “What’s Your Problem: To Solve Your Toughest Problems, Change the Problems You Solve” written by Thomas Wedell-Wedellsborg.
You answered “yes” to question 3
Great. Ross and Tyler’s tools should work for you, especially if your sales and marketing teams are using Salesforce. But please still play the “devil’s advocate” role and ask your sales and marketing senior leadership why they haven’t been using the tools already? Once again, reframing the problem may be a better approach as you try to get over your growth hurdle.
Unfortunately for Ross and Tyler, “predictable revenue” is a widely used measure of business performance anyways. CEOs at enterprise software businesses like yours manage their “predictable revenue” reality on an ongoing basis. You already know, with 80% certainty, or better, what your team will sell over the next quarter if your business is 5 years old. It will pay off if you and your senior leaders can read Wedell-Wedellsborg’s book and reframe what really amounts to a problem: the gap between where your reliable revenue predictions over the next quarter are, today, and where you want them to be.
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