It's a beautiful story — Aaron Ross transformed the Salesforce.com sales team without any traditional cold calling and scaled the business into a $100 million sales machine. But the truth is that most sales reps still don't have time to sit and read the best practices he developed in his award-winning book, Predictable Revenue.
That's why I read and summarized his best-seller for reps who have limited time to spare — but still want to sound like they've kept up with the latest sales reading list.
What is Predictable Revenue?
Predictable Revenue is a framework to create consistency year-over-year and provide business growth based on a formulaic process — not last-minute hustling and guessing. That way, you're 'predicting' how much revenue your business is constantly generating.
The authors stress that the approach needs to be systematic if it's going to be leveraged effectively. Achieving Predictable Revenue takes three key activities:
- Understanding Your Funnel
- Determining an Acceptable Average Deal Size
- Defining Time Frames
Once you cover those factors, you can start to start to put your Predictable Revenue strategy in place. You start by understanding the nature of your funnel — figuring out the key points during the transitions from preparing, prospecting, and ultimately starting your sales cycle. From there, you start to put together a series of repeatable steps to facilitate its progress.
Next, you determine your average deal size to ensure you can accurately anticipate your revenue. Then, you start to estimate the time windows required for most key elements of your sales org's operations — including how long it takes to ramp new reps, your prospecting cycle length, and your sales cycle length.
Once you have all of those elements accounted for, you can set yourself up to effectively leverage the framework.
Ross and Tyler also touch on a few other key terms that play into the predictable revenue model. Here's a look at five of them.
Predictable Revenue Terms
1. Cold Calling 2.0
"Cold Calling 2.0" is a prospecting strategy where a rep gets in touch with the direct manager of a decision-maker they're targeting and asks them to refer them to the right person.
The hopes here are that you'll know you're connecting with the right prospect, that they'll already know who you are when you finally connect, and that they'll have already set some time aside to speak with you before your conversation.
2. Hot Coals
The term "Hot Coals" refers to a sales cycle's uneasy, stagnant, uncertain period a sales org faces before it breaks through from limited organic growth to proactive growth. The Predictable Revenue model is tailored to help see companies through those kinds of stretches.
3. Layers of the Onion
This is an analogy to help teams think through how to "layer out" their products or offers. The goal here is to make it easier for prospects to choose how they get to know a company and its products — step-by-step.
4. Market Response Representative
Market Response Representatives qualify incoming leads that reach the company through website or phone. They route qualified opportunities to the appropriate quota-carrying salesperson.
5. Sales Development Representative
These are reps that specialize in "Cold Calling 2.0" and "outbound sales." They're responsible for generating outbound leads — not closing deals or qualifying inbound leads.
Predictable Revenue Model
The Predictable Revenue model leans on three key principles:
- Don't cold call.
- Focus on results — not activities.
- Everything needs to be systematically process-driven.
Don't cold call.
The processes that comprise Predictable Revenue — as a system — are tailored to locate and effectively connect with decision-makers. Traditional cold calling doesn't lend itself to making that happen consistently.
Predictable Revenue's answer to those more conventional methods — referred to as "Cold Calling 2.0" — bypasses the initial awkwardness and ineffectiveness of cold outreach.
With the "2.0" strategy, reps essentially prospect into cold accounts, allowing you to focus more on productive research, manage your number of dedicated outbound reps, and develop reps' expertise as they progress.
Focus on results — not activities.
The Predictable Revenue model is inherently results-driven, meaning you don't gauge your success by relying on activity metrics — instead, you focus on the results of those activities. For instance, you want to look less at how many mapping calls a rep makes and more at the response rate those calls generate.
Everything needs to be systematically process-driven.
This principle is ingrained in the name of the model itself. A predictable model leans on how easily you can predict the results of your org's efforts. Letting reps sort of wing it — without establishing clear, standardized processes — makes your results harder to anticipate and account for. If you want to leverage Predictable Revenue, you need to make sure everything is systematically process-driven.
Predictable Revenue presents an interesting framework any struggling sales org should consider leveraging. Though its implementation might have some growing pains, it can be an excellent model for both seeing and anticipating the results you want to see.