Recurring revenue operating model - key to overcoming economic headwinds
Alex Abbott (F.ISP)
Where Conversations Become Stories—and Stories Become Growth
For more than two decades now, MarTech companies have tried tirelessly to generate consistent growth.?A steady flow of recurring revenue.?Something getting much harder to do with less than 6% of start-ups succeeding and rising competition with more than 10,000 companies now in our space, and that’s just the tech companies, what about the services consultancies, with their own ideas of driving new business.?And as I reflect on the last 20 years, the winners are the companies that understand the value of their solution and how their organisation enables that value for their customers.?Winners have a leadership team not afraid to twist and turn their way to success, fighting for survival (compound growth rate), with an innate ability to find the light (success) no matter how dark it gets.
Customer Success?appreciates the differentiating value the product delivers and are equipped to elevate the conversation there, despite the fires being fought.?There is a clearly defined path to value and the necessary support, to ensure customers drive adoption of the tech, receiving new levels of value over time as a result.?
Sales and Marketing?are aligned to this value proposition and understand how to position and quantify value effectively within target accounts and across the profitable addressable market.?
Enablement?is strong across all revenue facing teams,?focusing on the application of knowledge?to encourage customers, partners and prospects to make the change required to experience the value.
Shared Sense of Purpose?
Ensuring a logical path to value with evidence of success is important.?Having a clearly defined method of quantifying value based on reality and not the one sided view of the product or service, including:
With this deep knowledge of value and shared sense of understanding with your counterparts, other teams, there is an unwavering sense of purpose that instils a great deal of confidence.?Confidence that helps to drive sustainable and consistent performance across the organisation.?
Considerations?
Strategy and resources are important, as is the core value proposition and your peoples understanding of it, and how it’s applied for success.?Some other aspects to consider carefully, are:
Stay true to the original objective and don’t give up too early, adapt yes, but don’t give up!??
Talking from experience...
Building a business from zero to $22M ARR and protecting a 90% customer retention rate when many of those around me couldn’t, has been the highlight of my 22 year career.?From 1 to a team of 40 people across sales, marketing, partnerships, customer success and services, we grew a culture that was based around the value based mindset I describe above and our ability to help others see it and more importantly, achieve it!?
The operating model?
The traditional sales funnel is obsolete.?The notion of more in the top is no longer possible due to fierce competition and buyers no longer speaking with sellers - even with deep pockets you cannot simply put more in the top without consequence further along the funnel.
Buyers already have an idea of their problem and the companies that will solve it before they speak with you.?
Close rates and deal values are declining because companies do not understand their differentiating commercial value or how to convince others of it.?
[traditional sales and marketing funnel - it's no longer possible to simply put more in the top of the funnel and expect better results]
Understand your value?- the value you and your solution delivers and what must be done to achieve it.?
Define your path to value?- what are the steps to value, the small steps on the way to achieving a larger revenue goal.?And the levers within your customers control to achieve more revenue, sooner.?
Build your growth plan around your path to value?- pipeline for expansion or new business, if you’ve defined your path to value steps around key challenges your customers face then they’ll want to listen to how to solve a problem and not how amazing you, your company or your solution is.?
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Enable?your revenue facing teams to understand how to quantify and deliver the value so they can confidently convince others to join you on this journey.?
[Supero recurring revenue operating model - with mini-funnels representing each team/team member owning and amplifying their personal brand to support business growth]
Enable?all?teams on a Digital Selling & Influence methodology.?Empower your own people to curate valuable networks and own the passive social presence, stand out from the crowd, get your company noticed - it’ll save you a small fortune on marketing costs and will give you more visibility, new conversations, pipeline, bigger deals, shorter sales cycles, and revenue.?And make you the most attractive company to work for (new hires) with the coolest culture as the people stand out on social.?
Build a sense of inclusive community with everything you’re doing, include partners, customers and likeminded marketers across your addressable market?- bring people together, get to know each other, build rapport and ultimately trust.?After all, people buy from people they know and trust.?And don't under-estimate the time it will take to create a thriving community where the members feel compelled to participate. Participation from members is vital to the success of a community. You will need a well defined strategy that considers recruitment, content and overall management of your community, for it to succeed.
Ditch MQLs and SQLs?- unless you need to justify spend to an old school marketer.?Nurture all relationships based on a set of behaviours that more accurately indicate a customer, partner or prospects probability of buying.?
Ensure your sales process is behaviour based?- measure your revenue facing teams based on a set of behaviours (activities) that increase the probability of a customer or partner buying or following the path to value.?
ICP, IPP, TAM and PAM?are table stakes, but choose them wisely, based on lifetime value of your customer, following your path to value - this will have a significant effect on exponential growth further down the line.?
How long will it take?
The timeline for a ‘startup’ or existing company too ‘restart’ from the approach is one year.?
Year 1?- laying the foundation, aim for some early wins and learn and adapt quickly.?Don’t make the mistake of focusing on short term revenue at the cost of disrupting your strategy, unless a deliberate pivot.?
Year 2?- creating predictable growth.?Begin to enjoy a more?consistent and predictable flow of revenue.?Constantly tuning your approach and the enablement of your people.?
Supero is designed to help companies operating in the MarTech industry accelerate growth and increase profitability.?
From solving pipeline generation problems to designing your revenue go-to-market model, my team and I are passionate about all things MarTech and love to help our clients taste new levels of success.?
To learn more or just a friendly chat to swap learnings, drop me a DM on LinkedIn,?Twitter.com/Alex_Supero or WhatsApp +44 7951 220113?
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Community | Community Led Growth | Community Based Marketing | Marketing Consultant Speaker and Trainer
2 年Love that you have 'Build Community' in here Alex - it should never be an afterthought, but a key pillar. And with a proper community strategy behind all the communities (employees, channel/partner, client/prospects, advisors, investors etc).