By Robert Jurkowski
The former CEO of Intacct – and current revenue acceleration consultant – shares time-tested strategies to help any software company grow.
There are five steps you can take right now that will put your company on a path to explosive revenue growth in 2019. Over the past 10 years, my firm has worked with over 300 software, cloud, and services companies to identify and apply the five most important steps you can take to achieve this significant revenue growth. By implementing these best practices, we have helped companies grow their revenue by 30, 50, and even 100 percent year-over-year.
ALIGN WITH THE CUSTOMER ACQUISITION PROCESS
According to The Corporate Executive Board (CEB), 57 percent of the sales cycle is already completed before a prospect engages with a salesperson. That means that the buying process starts early when your prospect is conducting research on the internet, visiting your website, and requesting valuable information that will assist with education, evaluation, and selection.
To better align with the customer and partner acquisition process, many companies are combining their marketing, sales, and business development investments and resources under the chief revenue officer (CRO) who has ownership for the entire buying process. Likewise, best-of-breed marketing automation and CRM application companies are merged together to provide a more tightly integrated solution that supports the entire customer acquisition process. For example, Salesforce acquired Pardot, Adobe acquired Marketo, Oracle acquired Eloqua, and HubSpot began offering an integrated CRM solution.
This type of organizational structure and supporting integrated systems breaks down the silos between functional areas. Your demand generation programs provide 100 percent of the leads required by your sales team, and your direct and indirect sales complement each other to provide overall market coverage.
UNDERSTAND YOUR BUYER
How do you understand what will motivate a buyer to invest in your software? There is nothing better than a rigorous market survey to understand what your buyer wants, needs, and will justify. All of us make assumptions about our solutions, target markets, and what our prospective buyer wants, but we need to validate those assumptions. When you use a rigorous market survey to understand your target audience, it eliminates the guesswork about how to engage that audience or how to justify to your investors that you truly understand your buyer.
At a construction management software company that helps companies manage large capital projects and increase efficiency, we conducted a rigorous market survey with their target audience to truly understand what they wanted and needed. We discovered they had three markets with different needs. Companies with a small capital budget were primarily concerned about efficiently managing their resources. Companies with a medium capital budget were focused on managing their growth. Companies with a large capital spend were primarily focused on managing complexity. By understanding the needs for each segment, this software company was able to tailor the right message for each audience.
The best investment you will ever make is to understand what is important to your target audience through a rigorous market survey. This step alone will save you significant money and time to accelerate your engagement and sales. With this knowledge, your buyer-validated messaging, engagement, and offers convert visitors into prospects and prospects into customers.
REACH YOUR ENTIRE AUDIENCE
Every year we conduct revenue growth workshops with businesses across North America, and I always ask what percent of their target audience they are actively engaged with today. With few exceptions, most companies are typically only engaged with a fraction of their target audience (typically five to 10 percent). Unfortunately, their audience cannot buy from them if they do not know they exist. You need a strategy to reach your entire audience over time because you do not know which five to 10 percent of your addressable market will invest in your software this year.
Working with a business intelligence and analytics company we determined their target audience was 500,000 CIOs in North America. We also realized that purchasing or building this large database would be very expensive. Instead, we put in place a plan to acquire 12.5 percent, or one-eighth, of their target database every quarter so that by the end of the second year, they would reach 100 percent of their target market.
An accurate database of your entire audience is the most overlooked critical investment I see across hundreds of companies. Another challenge is keeping your database current, because up to 20 percent of a database may become inaccurate each year from movement of employees, mergers and acquisitions, and shifting organizations.
DRIVE VELOCITY AND VOLUME
Every software and cloud company is part of the subscription economy where monthly subscriptions often replace one-time perpetual licenses. The key to significant revenue growth is driving velocity and volume while increasing profitability by keeping your customer acquisition cost (CAC) low.
I still see many companies that want prospects to sign up for a demo. Does that increase or decrease friction with a buyer? A way to decrease friction is to provide a benefit-focused recorded demo that immediately presents your solutions on your website. Custom or in-depth demos can be presented to qualified buyers later on, so you allocate your best resources to selling instead of educating.
Next, put in place a demand generation engine so you can scale a significant volume of high-quality sales leads for your sales and partner teams. When I worked with the CEO of a cloud accounts payable and e-payment provider, he wanted to double revenue every year. Instead of creating 38 leads per month, this engine created 350 leads per month so they could double revenue every year.
Does your website tell instead of sell? Another way to increase velocity is to enable the buyer’s journey on your website to guide your buyer through the entire buying process. That journey may be initiated when buyers select their role, industry, or another important self-selection criteria. Even if you cannot sell your solution or service online, you have created a strong preference for what you offer and significantly shortened your sales cycle.
EXECUTE IN ALL REVENUE GROWTH AREAS
You have an opportunity to accelerate revenue growth in direct sales, channel partner sales, and upsell and cross sell strategies. When I was the CEO of Intacct, a leading SaaS financial applications provider, we onboarded 5,000 new customers and 300 sell-through partners. One of our key objectives was to execute all of the revenue growth areas for the company.
With our direct sales team, we achieved significant sales velocity and volume by partnering with front office leaders like Salesforce to offer an integrated front and back office solution to our customers. We also created the buyer’s journey on our website to accelerate the sales cycle and provide that frictionless buying process.
With our channel partners, we identified CPA firms and market makers that would embed or private label our SaaS solutions to create a whole solution for their customers. These partners helped us reach many industries and audiences where we did not have domain expertise or direct sales coverage.
In order to maximize the upsell or cross sell potential with current customers, we deployed progressive bundling to offer solution bundles that enabled our customers to grow their investment and the value received with our solutions. We added new capabilities such as an executive dashboard and analytics to enhance decision making for our customer CFOs and their management team.
This focus on predictable revenue growth and profitability eventually led to the acquisition of Intacct by The Sage Group for $850 million and 9x revenue. These five steps worked for us then and can work for you today to accelerate significant revenue growth in 2019.
ROBERT JURKOWSKI is the founder and managing partner for On Demand Advisors, a global revenue acceleration firm (www.ondemandadvisors.com). His firm has collaborated with 300+ software, cloud, IoT, and services companies to help them implement revenue growth best practices and experience predictable and significant revenue growth.