Does your company or business unit openly discuss and track revenue goals? I suspect for many of you the answer is ‘no’.
This may seem odd. Because unless your company is a nonprofit corporation, its ultimate goal is to make money. Specifically, profits. As in, the revenue generated exceeds the costs of running the business. At the end of the day, it’s a simple concept.
Yet, many organizations do not openly discuss their revenue goals or how they are tracking toward these goals. And this despite the fact that daily operations would be more impactful if designed to boost revenue.
Why is this?
10 businesses, 10 different ways
The short answer is likely ‘it depends’. There could be many reasons why revenue goals are not openly discussed and tracked.
There are countless articles about how Americans view it as taboo to discuss money. Maybe this belief applies to business environments as well because of the perception that it can reflect on job performance or individual worth.
Maybe it’s the underlying belief that “businesses profit by taking value from customers and society, rather than creating value and sharing it with customers.” So perhaps there is a feeling of selfishness or disregard for the common good attached to the notion of revenue generation.
Or maybe business leaders feel they don’t have the tools to track the revenue impact of each function and/or team. So they use proxies to evaluate impact.
Perhaps business leaders fundamentally believe that revenue is not the responsibility of every function. It's possible they believe each function should focus on other objectives that they loosely attribute to impacting revenue...
As I said, there could be countless reasons. Dozens more than the few I mention here.
Ideas have consequences; bad ideas can have lethal consequences
Regardless of the reason, not discussing revenue openly in your organization is a bad idea. It hurts organizations. It hurts individuals.
When talking about how people avoid discussing money, Amanda Clayman points out:
The way we’re taking this on is leaving us poorer, less connected, and more vulnerable to people taking advantage of us. We’re not able to be as savvy because we’re not collaborating.
The idea behind this statement is that individuals are worse off when they intentionally keep to themselves something that was meant to be shared. It's why protectionism fails. Or why you should always share a Kit Kat.
We're not savvy when we don't collaborate to generate revenue. We’re also not very effective.
When team members don’t understand how they impact revenue, it’s possible (more likely?) they are spending time on random activities. At best, these activities are simply a waste of resources. At worse, they are an active drag on forward momentum in the business.
This is not great for the organization.
When times get challenging and layoffs are more common than anyone would like, it’s common to see those without a direct tie to revenue as first on the chopping block.
So, this is not great for individuals either.
How do we do better?
There are five specific actions that SaaS companies can take to help drive more revenue:
- Build a value creation loop. Start by ensuring your company creates value for your customers. Ensure this translates to revenue for your company. Educate everyone in your organization about this value creation loop.
- Create alignment by assigning each function at least one revenue goal that they can control and/or influence.
- Fully map how each function's activities impact revenue. Understand which core activities increase revenue or reduce costs, and which ones don’t.
- Get granular. Encourage each person in the company to work with their manager to create goals that demonstrate their individual revenue impact.
- Measure and improve. Find or create a tool that helps you identify, monitor, and improve revenue related activities. After all, you can’t manage what you can’t measure.
Make revenue happen
If you’re part of Revenue Operations or Customer Success, Tingono makes all these actions much easier for you.
Tingono makes it easy for you to retain and expand your customer accounts. Specifically, we analyze unique business signals from your data to identify which activities will drive revenue. Then we automate the best next actions for you.
In short, Tingono is the tool you need to monitor and improve revenue activities. It also draws a direct correlation between the value you provide to your customers and the revenue it produces. As a result, it’s much easier for everyone in your organization to assign and track revenue related goals.
