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.