The Sales Funnel concept is increasingly being replaced by a new concept in customer acquisition — the Revenue Flywheel. I know this because the term keeps coming up in casual conversation with a few private equity folks I work with.
At first, I didn’t recognize the term. Then I remembered Jim Collins’ management book, Good to Great: Why Some Companies Make the Leap…and Others Don’t and his description of the flywheel effect.
He has the reader imagine a large and heavy metal flywheel (a wheel used to store and smooth out energy delivery, as in an engine) and the effort required to get it moving. The first push moves it very slightly, the second a bit more, the third even more (thanks to the momentum of the earlier two pushes added to its own) and so forth.
Finally, all those little pushes get the big flywheel rolling along with ease. Still, there wasn’t a single push that did it — you have to consider all the little efforts which contributed.
Applying this to a business, Collins explains that it’s the accumulated day-to-day effort of an organization that leads to its flywheel spinning faster and faster, rather than a single defining action.
Too often, however, teams change direction in attempts to bypass the “arduous buildup stage.” They lose momentum by chasing grand slams instead of simply getting on base. They progress in fits and starts, or not at all because efforts aren’t aligned. Some are pushing the flywheel forward while others are applying the brakes.
The Revenue Flywheel
Our approach at Volohaus has always been more flywheel than funnel. There are four main areas we focus on: PLAN, PEOPLE, PROCESS, PLATFORM.
Tips You Can Use
Here are 5 tips to get started now to grow your revenue:
- Use a tool like PI (predictive index) to make SURE you have the right people in the right seats. If not — use 2022 to reshuffle.
- Gather data via a customer survey with embedded NPS (net promoter score) questions. You will learn what customers love and hate, competitive differentiation, messaging, referrals, and newfound revenue. DO THIS!
- Secret shop YOURSELF and three competitors. You will be AMAZED by the Buyers Journey and how your organization and your competitors show up.
- Interview EVERY client-facing Marketing and Sales Professional on your team. They have actionable information and will re-engage for 2022.
- Tighten up your sales metrics. Volo has delivered over 300 projects. Our Operators continue to lament the poor implementation of CRM, dashboards, good data and winning sales metrics (lead cost, client cost, average sale, loan-to-value ratio (LTV), revenue velocity, conversion % by sales stage, etc.
Know these numbers. Sales. Is. Math!
This all may sound daunting and expensive, but it isn’t. It’s high-value, game-changing work. I promise you — a process-driven, math-based sales process delivers scalable revenue and significantly increased enterprise value.
And if you need a fractional CRO, CSO or VP to help guide and implement the process, Fractional Leadership can assist.
About the Author
Shaun Alger is Practice Manager at revenue growth firm VoloHaus. To learn more about how VoloHaus can help you accelerate your company’s growth, contact Shaun at 760-815-4464 or firstname.lastname@example.org.
“We are tired of being the Detroit Lions!”
That’s what a former boss said to me when I joined his company as the operations leader. He was the CEO, and he was struggling to lead his organization out of what he called the “doldrums.”
He could not improve delivery to his customers or find the right people and in general and felt the company was in a funk. He was at a loss of what to do. When he hired me and asked me to get the company to where it would be at least “middle of the road,” he called me his Superstar Free Agent signing for his team!
My former boss’s situation is not unfamiliar to many small business owners. I hear similar laments today when I engage with clients to discuss their issues, such as “I can’t afford to hire somebody full-time” or “I just don’t like getting involved in that stuff.”
Let’s face it; many business owners may not be cut out to deal with the day-to-day operations of running their business. Reality check time! It takes a certain mindset to enjoy the nuts and bolts of running a business, especially when working with people to maximize their talent. I happen to love it.
Part-Time Fractional Executives Can Be That Superstar
I’ve had conversations with small business owners who were perplexed on how to improve the performance of their business and struggled to find a solution. In many instances, they need help from a different level of talent than what they can afford. In fact, one business friend told me that he needed somebody like me but that he didn’t think he could afford that level of experience. Plus, he felt that I would become bored because the company was so small compared to what I was used to.
He was right — but only if he had hired me as a full-time COO. I countered, “But what if you bring me in as a part-time or ‘Fractional’ Executive?”
After a two-hour talk about how a Fractional Executive works and what they would do in his business, he agreed and asked me to find him a “superstar.” So, what happens when you sign a Superstar Free Agent on a part-time basis for your business?
One of my clients who brought me in as a Fractional COO said it best: “You can focus on multiple issues at once, and I can’t.”
What he meant was that he was good at sales and marketing but not so much at operations. And in operations, there are always multiple balls in the air that need to be juggled to ensure success. As a COO, I have experience doing just that. When I have my weekly update with this client, and I recount the issues I am dealing with, he laughs and says, “Glad you have to deal with that now and not me.”
He is right; he truly appreciates what I do and that he doesn’t have to handle that part of the business. Business owners should not have to take on that part of a business if they rather not or don’t have the time. Hiring a Fractional Executive from the Fractional Leadership network allows business owners to do what they do best, all while bringing balance back into their lives and growing the business.
With the help of a perfectly matched Fractional Executive Superstar, you and your team can be the “Patriots” of your market!
About the Author
David Baughman, the president of Fractional Executive Solutions, LLC, is a career operations professional who now serves clients as a Fractional COO and Integrator for companies operating on the Entrepreneurial Operating System® (EOS). To learn more about FES, contact David at email@example.com.