Predictable revenue, what is it?

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To talk about predictable revenue, who better than Aaron Ross . In just a few years, he was responsible for Salesforce increasing its turnover by 100 million dollars thanks to having introduced its innovative “Cold Calling 2.0” technique.

Considered the bible of sales in Silicon Valley, his best-selling book Predictable Revenue details the best practices that enabled him to reach $100 million. He explains how scalability and revenue predictability is a key factor for a B2B business to grow.

Ross gave a talk in Belgium on predictable revenue which is definitely the best way to explain this concept. We have extracted and translated the best of his talk in this post, we hope you enjoy it!

Introduction
Predictable Revenue is not only the title of his best-selling book but also the clinical nurse specialist email database name of the company of which he is CEO and founder. It teaches companies how to increase sales faster and more predictably. Previously, Ross helped create a revolutionary sales process inside Cold Calling 2.0. He has been featured in Time and Businessweek and is also the author of “ CEO Flow: Turn Your Employees Into Mini CEOs ” and “ Sons Love Drawing Mutant Robot Battles with Dads .”

predictable-revenue-book

What does Aaron recommend in his book Predictable revenue?
He learned that people want “predictable revenue” because one good, unpredictable quarter isn’t good enough – they want consistency year after year, and they want the kind of business growth that isn’t based on guesswork and last-minute, reactive hustle at the end of each quarter or month. They want a process that is based on a formulaic, consistent approach – that’s what’s valuable.

They want to build "sales machines," a business that generates predictable revenue, and there are three keys:

1. Repeatable lead generation programs
2. Consistent sales processes
3. Customer success with your product.
A key insight to avoiding lead generation roller coasters is to understand how not all leads are created equal. The three main types of leads have different conversion rates and sales cycles:

Seeds : Word of mouth or referrals from previous satisfied customers, these are the most profitable leads, but it is challenging to proactively grow them.
Net (networks): These are marketing leads (MQLs), such as internet marketing or a traditional one-to-many marketing model.
Spears : This is an approach directed and driven by Sales Development Representatives (SDRs), also known as your prospecting teams (the Cold Calling 2.0 approach).
To build a “Sales Machine” and predictable revenue, should we quickly start growing our sales team?
Sales VPs and board members make painful planning mistakes every year. They think adding salespeople and working harder will increase revenue. They think to double revenue, they need to double the sales force to boost sales and work the current team harder. MISTAKE!

VPs-CEOs-wrong-decisions

Working harder and making more calls doesn’t scale. In the most effective sales organizations, salespeople don’t increase customer acquisition, they deliver on it. This is a major shift from traditional sales. If something isn’t working, working harder just means that what the sales team was already doing isn’t working, yet they continue and do more. Sales of the future must increasingly look like account management, and customer acquisition is squarely in the hands of marketing.

Board members and CEOs exacerbate the problem. They tend to rush into setting growth targets of 100% or more and arbitrarily choose these targets since there is no data to base these predictions on, and then they go crazy with the VP of Sales who eventually misses the plan, the company misses the target, and the executive team gets fired or changed. The new team tries to hire more people to hit the targets and this doesn’t work either. The Board and CEOs keep making the same dumb mistakes because people under pressure tend to retreat to what they know rather than risk trying new things – they end up doing more of what doesn’t work than stepping back and figuring out a new approach.