What is the right Predictable Revenue Model for SMEs?

In our previous two articles, we discussed how Predictable Revenue is key to sustainable business growth and why Aaron Ross’ model is not suitable for SMEs. In this article, we will share with you how you can implement our scalable predictable revenue model within your SME business.

In our experience, a more practical approach to generating predictable revenue is to implement an “effective lead generation engine” in your business. This involves combining the six key components of lead generation using a structured framework, which we will discuss in more detail in this article. This predictable revenue model provides you forward visibility of the time, cost and resources required to successfully implement the lead generation engine and achieve the target revenue. The model also enables you to scale up or down the lead generation cost and efforts based on the business constraints and requirements.

How do you implement an effective Lead Generation Engine?

  1. Quantify your sales pipeline requirements
  2. Segment your target market and identify your sweet spot customer
  3. Identify the key content enablers
  4. Select tactics and channels to reach out to your target audience
  5. Develop a 6-month lead generation plan
  6. Establish systems & processes to implement the lead generation engine

Let’s look at these six steps in more detail.

1. Quantify your sales pipeline requirements

Begin by quantifying your sales pipeline requirements, starting from the number of contracts/ clients required to deliver the revenue targets. Work your numbers back along the sales pipeline, using past conversion ratios to identify the number of leads and ultimately the number of prospects you need to target. Knowing the scale of the challenge (i.e. total prospects required and converting them to contracts), you are better positioned to quantify the time, cost and effort required to implement and manage the lead generation engine.

2. Segment your target market and identify your sweet spot customer

The key to successful lead generation and high conversion ratios is a well-segmented target market with clarity of who is your sweet spot customer that you will target. In a complex B2B environment, it’s important to identify the different key stakeholders in the buying process and engage them all. You need to build this intelligence around your target audience and prospects. It is worth highlighting here that Aaron Ross proposes targeting ‘cold accounts’ when implementing his model. However, we advise you to target a mixture of cold and warm contacts. There are ways to identify warm contacts/leads to accelerate the lead generation process. We will discuss this in more detail in a future blog.

3. Identify the content enablers

“Content is King”! Your content should educate your buyers, drive engagement, build trust and ultimately enable conversion into contracts. Identifying which content will engage your target audience requires a great understanding of your sweet spot customer, the different stakeholders and their top priority issues. It influences the content ideas as well as the content medium that you will feed into your lead generation engine. Content mediums include blogs, articles, videos, demos, infographics, case studies, etc. Your content needs to be relevant to your target audience, written in the language that resonates with your buyer. Always think from your buyer’s perspective when identifying content enablers and creating content.

4. Select tactics and channels to reach out to your target audience

Now that you know ‘who’ you need to target, and ‘what’ content you predictable revenue model for SMEsneed to target them with, you need to decide ‘how’ will you target them i.e. select relevant tactics and channels. When implementing our effective lead generation engine, we encourage a multi-channel approach. Use a combination of tactics and channels to reach out to the target market, instead of a single ‘email-only’ approach proposed in Aaron Ross’ model. Email is not the silver bullet nor is cold calling totally irrelevant. It depends on who you’re targeting and your budget constraints that determine the combination of channels and tactics that can be used to sustain the lead generation engine.

5. Develop a 6-month lead generation plan

Once you have identified your target sweet spot customer, the content enablers, tactics and channels, you need to stitch them together in a 6-month plan. The plan helps structure the implementing of the lead generation engine that generates predictable revenue in your business.

predictable revenue model

We recommend you to focus on the next 6 months only, for two reasons. Firstly, keeping your plan short enables you to quickly analyse your lead generation performance and identify the elements that are working, elements that are not working, so you can adapt and improve it going forward. Secondly, the markets are constantly changing and so are your buyer’s needs. For example, you may find that buyers have a new top priority issue that you can write content on. This gives you the opportunity to adapt to such market changes and integrate them into your plan.

6. Establish systems & processes to implement the lead generation engine

Finally, you need to put in place relevant systems and processes to support the implementation of the effective lead generation engine. For example, CRM systems allow you to manage your contact database and measure the performance of your lead generation engine. Similarly, establishing structured processes will enable you to ensure consistency, quality and efficiency of your lead generation engine. With processes in place, everyone in the team is aware of what needs to happen at each stage of the sales pipeline, who within the team is responsible for what, how to handle a certain situation, etc. Having this view ensures that your lead generation engine is consistent and repeatable.

The systems Aaron Ross proposed in his book six years ago were and are still expensive for SMEs to implement. Since his book was published, there has been a huge development in systems with regards to innovation, functionality, the number of options available and the price points. CRM systems are now more affordable for SMEs compared to the bigger systems such as HubSpot and Marketo that Aaron Ross proposes. So there are ways in which SMEs can put in place systems that enable you to implement an effective lead generation engine within your business.

In conclusion, as an SME, you need to manage predictable revenue generation within the time, cost and resource constraints you may have. Our predictable revenue model, based on implementing an effective lead generation engine provides a more affordable, easier to implement and efficient alternative for SMEs. Aaron Ross’ model may have been the right model for Salesforce, but it doesn’t make it the right model for every SME.

Next Steps – implementing the predictable revenue model

With the best will in the world, implementing a new model can be a challenge. If you would value some support in this key area, our team can:

  1. Accelerate the process of implementing an effective lead generation engine
  2. Bridge any skills, capability and knowledge gaps within your team
  3. Provide an objective view and a customer perspective to your lead generation engine.