By: Don Gray

Have you ever looked at your business’ revenue generation process? Do you realize that there is a process to go from the interest level in your company/product to the revenue and satisfied customer state? Even for a small business, we need to look a the whole process to ensure that we maximize our ability to influence the market and secure good customers.

In the mid 1990s I was challenged to come up with a way to better manage the sales forecasting process to drive much more predictable sales forecasts and results. As I looked into the challenge more deeply, I realized that I could not look at just the sales component to drive predictable results.

So when I developed my revenue generation model, I looked at how my business actually generated revenue. I found there were four key parts that are always in place:

  1. Demand Creation – your marketing and branding initiatives
  2. Sales Process – your selling engine
  3. Implementation – the successful deployment of your products or services
  4. Customer Retention – maintaining satisfied and repeat customers

Though research and analysis, the Sales Engineering Group Revenue Generation and Sales Process Model was born. As I work with clients today to improve their sales forecasting, we begin by discussing what they sell and how they see the customer’s buying process or decision-to-buy process. Once that is understood, I use that knowledge to define the key sales stages for the process.

The closer the sales stages can reflect the buying process, the more reliable (and accurate) forecasts become. After I define the sales stages that match the customer buying process, we define the sales activities within those stages by asking: “What buying decisions do you want to accomplish at this stage?” When the key activities are decided upon, we then look at how you determine how to move an opportunity to the next stage. So the next component is to define the criteria that one would use that essentially says that the key activities have been accomplished. This then is the advancement criteria that validates that stage’s key activities are accomplished and I advance the opportunity to the next stage.

Putting these three components in place and managing to them greatly enhances your ability to exactly where your sales forecast is.

Additional Guidelines & Factors

There are a few more guidelines and factors to consider when building a sales process model:

  1. Do not put a time factor into the model. Selling times vary. One deal might take six months. Another deal of the same size and solution could take 12 months. They both go through the same buying and selling process.
  2. Forecast based on the key activities you are performing. It is realistic that a sales representative may be performing key selling activities in different stages simultaneously. There is a tendency among sales representatives to forecast the opportunity in the stage that is the most advanced sales activity they are performing. My operational guideline is that you can only forecast the opportunity in the sales stage where you have completed all of the advancement criteria from all previous stages. If advancement criteria have not been satisfied, then you cannot forecast into the next sales stage.
  3. Sales Stage Forecast Percentage. Many organizations apply a percentage to each stage to indicate the likelihood of an opportunity closing.
  4. CRM Systems. I personally am CRM indifferent. Every CRM comes predefined with a set of sales stages. Most organizations do not change the stages supplied by the vendor. For the CRM to give you reliable information, you must replace the vendor-supplied sales stages with your own defined sales stages.
  5. Lastly, don’t forget to manage your new process. Adhering to the process– particularly the advancement criteria– will dramatically improve your forecast accuracy.

About Don Gray

Don Gray is the Founder and President of Sales Engineering Group, a sales performance consultancy. Don has worked with a variety of small, medium, and large B2B organizations to help them develop their distinct value messaging, identify how customers buy their solutions, and skill their sales teams to drive predictable sales results. You can find him leading the monthly Sales & Marketing Shared Interest Groups.