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Opportunity Math is Within Your Reach

By: Dave Brock


a collage of various office supplies

I’m constantly amazed as I look at performance of organizations. I think, “Why do we revel in achieving our quotas and scaling goals, when we could be doing so much more?” I call this, ‘opportunity math.’

If we achieve our growth/revenue goals, we think we are doing well. Too often, however, we could/should be doing much better. We are underperforming the potential. Think of what it would mean to our customers, our own performance, our companies, shareholders, if we started to more effectively address the potential?

Goals vs. Achievement

Let’s look at some “opportunity” math. First, let’s look at individual performance improvement areas–then let’s start looking at the combined impact of doing more.

  1. One of the most interesting data points is the sharp decline of win rates—particularly around those SaaS companies focused on growth and scaling. Win rates have plummeted to 15-20%! In what world is a win rate of 15-20% acceptable? Imagine what we could do, without impact to the cost of selling, if we started being more effective in how we manage each deal? Why don’t we demand win rates of at least 40%? That would double our revenue and attainment at virtually zero incremental cost of selling! Why are investors–VCs, PEs, shareholders not putting pressure on leadership to improve these results?
  2. It’s astounding to me, that while many organizations are achieving their overall growth and revenue goals, yet roughly 45% of their people are achieving their quotas! Imagine what more could be produced if more of our people performed better. How should we be coaching them? Do they have the skills and support needed to achieve their goals?
  3. 60% of the opportunities we compete for end in no decision made! These are customers who have “committed to,” and budgeted to buy something. Yet they fail! So we and our competitors are “making our numbers,” from the 40% that actually make a purchase decision. What if we set a goal of reducing the number of opportunities that customers abandon late in their buying process? What if we could reduce no decision made by 33%? That would give us, collectively, a 50% increase in buying! And the incremental cost of doing this is $0! We are already working with those customers, we are investing time and resource in “selling” to them. But we aren’t focusing on the issues critical to their decision. We aren’t building their confidence in the decision they are making. If we helped them make sense of what they are doing and build their confidence, we can significantly reduce this, driving more revenue growth, again at virtually zero incremental selling cost.
  4. Then what about those customers that start a change process, but abandon it before they engage sellers. While this data is old (Gartner/CEB/Challenger), we know that most change efforts are abandoned or fail when the customer is about 37% of the way through the process. Yet most buyers are not engaging sellers until they are 85% or more through their buying journey! We never even get exposure to those opportunities! To be fair, some of those opportunities are abandoned for very good reasons. But, inevitably, many are abandoned because because the customer gets lost. They don’t know what they should be looking at, questions they should be asking, who they should be involving, what they should be doing to successfully navigate the change process. Imagine if we got involved earlier, helping them more effectively address and manage these issues. After all, we have seen so many organizations struggle with this, some successfully, some unsuccessfully. We can bring deep expertise in helping customers navigate these change processes much more successfully. This would probably require a greater investment in both marketing and sales. We have to learn how to intercept and intervene much earlier in the customer change/buying process. We have to engage them earlier than they traditionally engage us–but in doing so, we create great value with the customer and drive higher levels customer success and revenue performance for ourselves.
  5. Then there are those customers that don’t recognize the need to change. They haven’t begun to explore possibilities. Perhaps they are just too buried in their day jobs, they don’t have time to look at doing things differently. Perhaps, they are not aware of changes in their markets, customers, industries. They don’t recognize the need or, possibly, the “necessity” to change. How do we reach out to those people, who aren’t looking, how to we incite them to think differently, to explore new possibilities? We see many organizations beginning to do this–particularly in their major account programs. But beyond this, we are seeing organizations re imagining their digital engagement strategies, or leveraging deep expertise on social, event, conference and other channels. Their mission is to incite people to search, to begin to rethink, and perhaps later to commit to a change initiative.
  6. And then there is the retention, growth, and related opportunities for our current customers. We know we have to maximize the results our customers realize to retain and renew current business. But to grow that business, we have to look back at why customers bought from us in the first place. They bought because we helped them innovate and change. If we want to grow our relationship with customers we have to continue to help them innovate, to look at possibilities.

There is so much opportunity we fail to address! We celebrate hitting our goals, we celebrate and publicize our growth, but in the end, this is the result of getting our share of the 40% of customers that have figured out they need to buy something.

But we should be achieving so much more!

I was “raised” with the mindset that it is my “God-given right” to 100% share of customer and share of market. But it is my job to figure out how to do this. But somehow few share this perspective. They are satisfied with achieving their goals, when the data shows they can do so much more. Alternatively, we could be doing the same–but much more profitably.

I have to admit being stunned by how many accept this level of performance when we can and should be doing so much more. I wonder how long it will take investors–VCs, PEs, shareholders to begin to recognize that despite whatever success we may be having, we could and should be doing so much more.

Yeah, I know how tough it is to achieve our goals. I don’t mean to be cavalier about this–particularly when so many other organizations aren’t. But when we look at the math, when we look at what’s really happening in our markets, we can’t be satisfied when we see can can be doing better.

Published: May 16, 2024

Source: Partners in Excellence

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Dave Brock

Dave Brock is the founder of Partners in EXCELLENCE, a consulting and services company helping to improve the effectiveness of business professionals with strategy development, organizational planning, and implementation. Dave has spent his career working for and with high performance organizations, ranging from the Fortune 25 to startups, including companies such as IBM, HP, Nokia, AT&T, Microsoft, General Electric, and many, many more. The work Dave does with business strategies is closely tied to personal effectiveness of the people in the organization. As a result, Dave is deeply involved in the development of a number of training and coaching programs.

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