Chief Strategy Officer Summit: Your Clients are KILLING your Business! (and what to do about it)

Hello and welcome back to the Chief Strategy Officer Summit. It's a packed day ahead, so if you can't catch it all, you can find every session on demand so that you don't miss a second of the action. After the event, a great place to continue the conversation is on our community Slack channel. That's all from me, so please sit back, relax, and enjoy the next session. Hello and welcome back to Chief Strategy Officer Summit. Delighted to introduce our final speaker of the day, Mark Osborne. Mark will be discussing how your clients are killing your business, revenue strategies for growth. Without further ado, I'll pass over to you, Mark.

Thanks so much, Will. So, as we all know, businesses are obsessed with finding more leads and more clients, but too often that's actually a symptom, not the real problem of what's going on. It actually reminds me of the classic South Park episode where big-boned Eric Cartman gorges on protein powder trying to become a beefcake, but he just gets fatter. The same thing is true in business. In fact, this disconnect is so pronounced that I wrote a book on it that went to number 1 in 10+ categories on Amazon. And if you stick around to the end, I'll tell you how you can get a copy for free. But in this book, we lay out how modern businesses are using strategic systems to drive revenue growth and avoid the pitfalls of blindly hunting for more leads and more clients and the challenges that can come with that without a strategic system in place. Now, this system and approach was built over 20 years of delivering hundreds of millions of dollars in revenue. And I noticed some big changes a few years back, creating some real problems for B2B companies. The old tricks that used to work just aren't working anymore. McKinsey and Company says that the pandemic lockdowns accelerated B2B marketing and sales trends by more than 10 years in less than 10 months. So we got a decade's worth of change in less than a year. If you weren't cutting edge before, you're a dinosaur now. Gartner calls out that B2B buyers are drowning in high-quality content that they really can't make sense of. So great content is not good enough to break through and win. Strategies that worked just years ago no longer do. And Forbes called out that 70% of the B2B buyer's journey is complete before they engage a single vendor. And if you're not the number one vendor, they're probably further through the process before they engage you. So you can't sell your way out of this because your salespeople don't have the opportunity to get in and impact the decision-making process that your clients are going through. So these are really fundamental shifts that have happened in the B2B marketing and sales landscape, and they require really fundamental changes to your strategic approach. Unfortunately, this isn't something that a growth hack or a new tactic can just easily solve, but solving it really is vital because if you haven't solved it, you're really only getting your competitors' scraps. Well, what's wrong with scraps, you might ask? Well, the problem with scraps is we all know the 80/20 rule of business, that 80% of your revenues come from just 20% of your clients. Well, that's even more pronounced when you think about the prospecting and lead generation stage of building your revenue systems. Because let's say 50% of your prospects actually become clients. That means that 80% of your revenues come from just 10% of your prospects. And the other 90% of prospects have the potential to kill your business. So you might ask, How is it that clients could kill your business? Well, there are actually 3 different types of killer clients in the B2B landscape. And you probably will recognize these as we go through them. The first is who I like to call Jigsaw from the Saw movies. Jigsaw is the customizer. If you remember from the movies, Jigsaw customized unique ways to torture his victims. And these clients will torture you because they don't trust your approach. So they demand custom work and they distract you from building your vision for the product and what you know the market wants. That pulls you further and further behind your competition, making it harder for you to really dominate the market landscape. The next type of killer client is this guy, Friday the 13th's Jason. The classic slasher. And Jason is that price slasher. They don't believe in the value of your solution. So they're constantly demanding discounts that eliminates any profitability. And finally, we have this guy, Freddy Krueger from A Nightmare on Elm Street. And he's actually a double threat. We call him the churn and burn because he burns out your team trying to make him happy. And And then he churns out without ever growing with you, making it really impossible for you to leverage these clients for renewals, upsells, referrals, testimonials, those things that help you really dominate a landscape. Too often, single clients will actually be multiple of these different killer personas where they negotiate different price cuts as well as demand customization And then finally churn out. So what can you do to mitigate these problems that exist in the marketplace? Well, there's not a silver bullet. There's no magic growth hack that will solve you, but there is a solution. The solution is building strategic systems, and we like to say that strategic systems will set you free from those killer clients. They'll set you free from the worry of hitting your forecast because Systems make it easier to trust when you have proven relationships with leading indicators that you'll actually hit the forecast that you've put together for your team. Systems will set you free from drowning because they help you prioritize different initiatives, making it easy to see where to focus. And finally, systems will set you free from conflict because they facilitate collaboration, making it easier for different teams to work together to improve. Now, there are 3 different types of systems that you need in order to achieve this. The first is attraction systems. These help you attract more of the right prospects so that you can improve pipeline quality and velocity through better messaging and sort of delivery in the marketplace. The next are acceleration systems, accelerating your best opportunities through the sales pipeline, which will improve both the speed of deals as well as the size of deals. Through better integration and execution in the marketplace. And finally, we have activation systems, activating your clients for faster renewals, larger upsells, and more referrals. And oftentimes, just prioritizing which of these systems can be really a fundamental shift for a company and recognizing where to focus their time and to find what's the, the best place to focus. And we've built a free diagnostic tool That'll make it easy for you to see which to prioritize for your business based on your answers to 15 simple questions that might take a little bit of research to understand about your business, but will guide you into which of these areas. So let's dive into each of these 3 systems. Attraction systems are attracting more of the right prospects, building demand, and capturing that demand and leads. Now, these systems help you to identify and attract those right prospects with compelling messaging and data on intent and qualification. And we use ideal customer profiles and buyer personas to really identify those prospects that are likely to become your best clients, which then gives you the opportunity to put all of your resources to win those most important opportunities in the marketplace so that you're the one choosing the clients you want instead of being left with your competitors' scraps. The next set of systems is on acceleration and accelerating those best opportunities through the sales pipeline. Again, once you identify those best opportunities, you have to put all of your resources on them to win because your competitors will otherwise. And so by using your ideal customer profile and your buyer personas to identify those best opportunities, then you can put one-to-one really heavy resources to make sure you win. While at the same time leveraging data and technology to scale and automate other sales systems for those less desirable prospects that you're okay if you don't win. And then finally, the last set of systems is activation systems. Activating your existing clients for faster renewals, larger upsells, and more referrals. This is actually oftentimes a hidden treasure within your existing business because you don't know just how much revenue you're potentially missing. Something like 10 to 15% of your clients are thinking about leaving right now. If I told you I could grow your revenues by 10% with zero customer acquisition cost, you'd absolutely be thrilled to find that. And so by using data to acutely understand when your clients are at risk of churning, you can do a better job of bringing them in And by building systems that give you the opportunity to sell in renewals and upsells at the exact opportune moment, you'll find that clients are ready to grow with you and give you more of their disposable income so that you can help them grow. So where does this fit within the overall funnel? Well, you're probably familiar with the modern bowtie funnel that doesn't just end at that first contract but actually focuses on expansion. And you're— you'll find that your prospects and clients have different objectives at each stage of this funnel, and you'll have different objectives in helping move them through the funnel. And by building the systems that allow you to do a better job of attracting the right prospects, do a better job of accelerating your best opportunities through the pipeline, and then do a better job of activating those clients for growth you'll be able to really grow those overall revenues and prioritize the projects that are going to make the biggest difference within your business. Now, one of the key ways that we see to do this is to bring all of these 3 different systems and the leaders together with a shared revenue scorecard. So we'll oftentimes work with our clients to build a scorecard against attraction systems, acceleration systems, and then activation systems with different KPIs for each and different strategies to achieve those goals. When you bring all of, all 3 of your revenue teams together, marketing, sales, and customer success on one unified scorecard, you get a lot more alignment between your teams. Now you might find that you wanna compensate them differently against those different objectives, where marketing might have more weight towards those attraction systems. Customer success might have more weight towards those activation systems since that's about renewals, upsells, referrals. Sales is more aligned to those acceleration systems, but bringing them all together on a regular cadence gives you the insight from across your organization to see the ways that you can improve that. And there are different systems and tools in place that you can use for each of these. Against those attraction systems, you want to refine your ICP and your personas so that you have better positioning, better targeting for your media, and better creative. And KPIs that you want to use here are around things like the lead volume or the diversity of sources that are coming, the cost per lead that you're bringing in, and how— what percentage of those leads are actually qualified. and are aligned to your ideal customer profile and persona. Against those acceleration systems, you again want to bring in KPIs around qualification and readiness criteria. Are they actually ready to be sold? Are they ready for you to put all of your resources against winning those opportunities? And by identifying that and doing a better job of each stage of the sales process, how many days on average your deals are spending there, and what percentage of conversion happens at each stage. You can hypothesize ways to improve that and then measure your results over time as you build that. And then finally, within those activation systems, you're gonna wanna build those processes for renewals, upsells, testimonials, and referrals. And you can build KPIs around what percentage of your overall leads come from referrals, what percentage of your clients have provided a testimonial or a referral for you. As well as what percentage of your growth comes from organic growth within your existing clients, as well as churn metrics or renewal metrics as well. So by bringing all of this together, you really build a comprehensive revenue team that allows you to maximize all of these 3 different systems to identify those killer clients early and block them from killing your business, while at the same time focusing your resources on those best opportunities in the prospecting and sales arena to then grow them as they become your clients. So how do we get started with this? Well, you— first step is to assemble that cross-functional team. Get someone that represents each of those different functions. And if you're a small business, maybe one person represents multiple functions, but have them specifically delineate where they are filling a specific role on the team versus another. The next thing that you want to do is prioritize and strategize. You want to diagnose those biggest opportunities so that you can focus. And as I alluded to, I do have a free diagnostic tool that I'll tell you how to get access to at the end that can help you identify where your biggest opportunity for growth is. Is it around attracting more of the right prospects? Is it around accelerating your best opportunities through the sales pipeline? Or is it about activating your existing clients for faster renewals, larger upsells, and more referrals? You wanna capture those key KPIs that we talked about on that scorecard so that you can have each of those team members look at that and share ways so that they can hypothesize solutions. Oftentimes we see that customer success has really great insights about what your clients love most. And by them feeding that into the marketing team, you do a better job of attracting those prospects that are likely to become your best customers. Likewise, marketing knows ways to bring in leverage and scale to impact customers that are likely to churn or post-purchase marketing that makes them happier about their decision. So, they're happier to provide referrals and testimonials. By bringing these teams together, you really get the most out of your revenue systems. And that's why it's important to have a collaboration cadence that brings together these teams, gives them the opportunity to talk and come up with ways that they can work together. So I alluded earlier that you would have the opportunity to get a free download of the book. Not only will I give you the complete copy of the book, but it also includes templates, calculators, and guides for coming up with these different key metrics for your business, as well as different ways to track that success, templates for that revenue scorecard, as well as your ideal customer profile, those buyer personas, how to build your customer buyer's journey so that you can map all of your content to the different informational needs that your customers have at each different section as they go through their process. And then that free diagnostic tool is also available to you here at this web address. It's 15 questions, but they may not be the easiest questions to answer off the bat because you'll need to look at what are, you know, sort of key metrics around what percent of your revenues are churning on a monthly basis, what percent of your leads are coming from referrals and word of mouth, versus other diverse sources, what your cost per acquisition is, and then how that compares to the first-year value of your customer or the lifetime value of your customer. And there are some specific metrics within that diagnostic tool to guide you, which will then help you identify which of those 3 systems is the fastest path to growth for your business. So I'm very excited to share these with you. I hope you'll find them to be good resources. I want to take a few moments to jump in and answer some of the questions that have come up. So I see in here, out of the 3 systems, is one more important for the other? Or actually, let me expand that. Do they hold equal weight? That's a great question. And in fact, in our experience, it varies based on where you are and sort of the lifecycle of your business. As well as where you are in each of the 3 different systems. If you're doing a great job of bringing in leads and closing those leads, but they're all leaving out the back door, you have what we call a leaky bucket. And while that might look good for revenue growth, you can never really dominate a marketplace like that. So you have to plug that, that hole in that leaky bucket. And so by looking at those 3 different systems, it allows you to identify and focus where you are sort of having your biggest challenges and biggest opportunities for growth. Michelle asked what some of the key metrics are for revenue performance, and I talked about those. There are a couple key ones that we find to be very good because they actually include multiple metrics, and that's sort of pipeline quality and velocity. And that includes the volume of leads that you have coming in, how long it takes them to move through your sales pipeline, The revenue that you get from your average order value and then the percentage that you close. That's a typical sort of pipeline velocity measure which does a good job of including both those attraction systems as well as acceleration systems on bringing in and then closing that first contract. The thing that the classic sales velocity or pipeline velocity metric is missing is quality. And so we absolutely insist on putting in there a measure of quality. What percentage of your deals actually align to your ideal customer profile? What percentage of those opportunities that you're bringing in, uh, fit with what you target in terms of an average order value or average contract value for clients? Because without that quality piece, you can be bringing in those clients that are likely to kill your business. Likewise, there's a net revenue retention metric that includes things like your growth from organic, so renewals and upsells, as well as your churn metric so that you can see how many of your customers are leaving on an ongoing basis. And so looking at that net revenue retention, you can get a really good sense of how, how good of a job are you doing at keeping and expanding those existing customers. So by just those 2 metrics on a dashboard help teams really come together. But we find it's important to break those down into leading indicators and submetrics that will allow the team to really come up with creative ways to optimize against different things within your revenue systems. James asked what the best way is in creating a cross-cultural atmosphere. Aligning incentives is key, and that's why we really recommend the shared revenue scorecard. That everyone is held accountable to. But their compensation might be structured differently and they might be weighted against different things that they have more impact on. But it's very hard for marketing to look to send over bad leads on an ongoing basis if they have to meet with the sales team on a regular basis and justify the leads that they're delivering to them. Likewise, it's very hard for sales to sell deals that could never be renewed because they're making promises that no one can keep, if they have to meet with the customer success team on a regular basis and hear about their challenges with renewing those contracts. So bringing everyone together on a regular cadence really helps. The other thing that really helps in creating this cost, this, you know, sort of cross-functional atmosphere is to emphasize that you're building systems together. So that if you don't hit the objectives that you're trying to hit from the volume of leads or the size of organic growth from upsells or the percentage of close from sales, if you're not hitting those, then the team can come together and collaborate on how did the system let us down? It's not that an individual let you down, but the system failed you. And so that creates much more of an environment of collaboration than if it's, well, you're the sales leader and you didn't close as many deals as we wanted, so you let us all down. Instead, it's how can we work together to improve our system? The next question from Vera is around when should you start in your org's development implementing these systems? I actually recommend from the very beginning. And even if you're just defining the way that your process works today, that does a good job of starting to create an environment where you can Separate yourself from the business. Even if you're sort of a founder or solopreneur that's running everything, start to describe the activities that you do as part of generating revenue when you have your marketing hat on. Start to describe the activities that you do in your sales process. Put these into sort of what we call a critical client flow, which captures how a client moves from becoming an anonymous prospect to becoming your best customer. That entire flow you want to capture. And then once you have that documented, that gives you the opportunity to bring in help or to bring in automation or to bring in artificial intelligence and generative AI, things that can really help you accelerate your success against each of those different things. Until you document it, you can't start to hand it off and remove yourself from the scenario. And you're really sort of held captive in delivering that within your business. Well, thank you so much for the time. I really enjoyed the opportunity to share some of these things with you. I do hope you'll take advantage of the opportunity to download the book, as well as those, as well as those different solutions and tools and templates that exist in there. And if there's ever anything I can do, please don't hesitate to reach out, mark@modernrevenuestrategies.com. Thank you, Mark.

Thanks so much, Mark. That, that was great, a great way to finish off the day. Yeah, thanks everyone for your attendance today and your participation and your questions and your engagement. And yeah, once again, a big thanks to Mark. Thanks so much. Thank you.