Proven Strategies for Consistently Increasing Sales Revenue: Insights from Leading Growth

Leading Growth: The Proven Formula for Consistently Increasing Revenue was published towards the end of 2022. After writing four books to provide a modern approach to selling in the 21st Century, I turned my attention to one of the more difficult roles in any sales organization. This role is the sales manager.

If we boil down the responsibility of the sales manager, we can describe it as increasing net new revenue. You will succeed in sales management if revenue grows, and you may fail by not increasing this one top line KPI, that is revenue.

Those who frequent this humble sales blog will know that I am critical of sales managers relying on a ludicrous amount of pipeline coverage, believing this ensures success. Coverage, yes. 8X, no. In a recent Instagram post, I wrote that “There is no evidence that more opportunities result in more win deals; More opportunities are simply evidence of more opportunities—not wins."

One person on Instagram accused me of not understanding the law of averages. We must agree that the law of averages applies to the pipeline. This detrimental reliance on these so-called “deals” is fake, false, unqualified, and a lack of a second meeting. My commentator is fooling himself, as more opportunities say nothing about your win rates. The need to acquire many more opportunities means you have a sales effectiveness problem, one that can’t be solved by more opportunities.

Effective Revenue Growth Formula

The formula for revenue growth is simple and straightforward. You start with your expected revenue going into a period and subtract the churn you expect before adding in the net new revenue you expect to acquire.

Existing Revenue: $15,000,000

Churn: $2,000,000

Net New Revenue: $5,000,000

Annual Revenue: $18,000,000

In the industry I spent most of my time in, I would lose $3,000,000 every year. As the sales leader, there were only a few available strategies. The first strategy was to always have large clients being pursued. Oftentimes, a large client would erase the churn. The second strategy was to retain our clients. Even though my sales reps had to handle the problems that would cause a client to defect, it was worth protecting the revenue.

In two sales years, I lost $10,000,000 in the first and $9,000,000 in the second. My revenue didn’t grow for three years. Because we always had a pipeline of large clients, we were able to acquire enough deals to stay stable after losing massive amounts of revenue.

Top Three Methods to Boost Sales Revenue

You want to do these three in the order you find them here. The order here is as important as the three ways to increase revenue.

1. Sell more to your existing clients: I know that many sales managers look for winning new deals. The reason you want to start by selling more to your clients is that you already have the two things you lack in the two other ways of generating revenue: Contracts and contacts.
2. Acquiring new clients: You can sell more to your existing clients while also acquiring new clients. In fact, you should always do both of these, building into your plan to reach your sales targets and goals.
3. Raise Your Prices: Of the three ways to generate new revenue, this one may be the most difficult. This may be difficult if you have competitors who are more than happy to lower their price and their profitability. You should raise prices when you can, as it adds to your net new revenue. This is last only because the increase may not match the first two ways to generate net new revenue.

Key Elements for Revenue Growth

Vision: When I show sales leaders and sales managers my vision, they ask for a copy. If you don’t have a vision for your sales teams, you will improve your results by deciding who your team is going to need to be to hit their goals.

Transformation: If your team isn’t already reaching their goals, you will need a transformation. You will need to identify what has to change for you to consistently increase your revenue. Failing here is why you may have the same revenue year after year.

Leadership Styles: Most sales managers want to be consensus-builders. This is right and good. But you will need a number of other styles, including the autocrat. If you want to build net new revenue, you may need a set of non-negotiables, like 90 minutes of prospecting every day.

Sales Effectiveness: For many years, I have implored sales leader to limit their improvement projects to the one single outcome that is sales effectiveness. You massively increase your ability to create net new revenue by helping your team to increase their individual win rates.

Conclusion

Leading Growth will help you to take a comprehensive approach to sales management. The chapters here are Vision, Transformation, Communication, Leadership Styles, Decision-making, Strategy and Alignment, Accountability, Structures of Accountability, People, Effectiveness, Opportunities, Forecasts, Protecting the Sales Force, Cadence, and Your Next Vision.

If you pick up Leading Growth, send me a receipt and I will provide you with a workbook you can use. This workbook has my answers to the above topics.