Don’t let revenue leak damage your business
Every quarter, thousands of pounds (if not millions) are slowly leaking out of your business.
We are talking about breakdowns across your revenue process resulting in revenue leak. So what exactly is revenue leak and what can be done to fix it?
What is revenue leak?
It’s the biggest business problem hiding in plain sight, impacting all companies across all industries. It represents the revenue you’ve already worked hard to earn but have yet to capture. And according to Forrester research, 14.9% of revenue is lost every year due to revenue leak.
It can show up in a handful of scenarios. Maybe the high-visibility enterprise deal you needed to come in slipped to next quarter. Maybe your win rates have decreased slowly over time without a clear culprit. Or maybe that huge customer you thought you could count on churned or downgraded.
Revenue leak is more pervasive than ever before and we need to understand why consumers and businesses have changed over the last few decades and how it’s affecting the way you operate today.
So, what exactly has changed and how has this impacted or accelerated revenue leak?
Buyer expectations have shifted from “waiting in line” to “I want it now”
The emergence of new technology and more connectivity has caused buyers to want (and expect) a more personalised buying experience. If companies can deliver on this, it will transform their customer relationships from “strangers” to “close friends.”
Thirty years ago, you couldn’t just hop on your mobile phone and get your customer success manager to troubleshoot a problem. Twenty years ago, you couldn’t visit a website and expect a sales rep to reach out to you immediately armed with details about your business.
But this transformation requires companies to be more human, more available, and more knowledgeable about customer needs. On its own, this doesn’t cause revenue leak (more on that later), but it does highlight the need for organisations to collect more comprehensive data and work to bring revenue-critical teams closer together under one source of truth.
Organisations respond: From disparate to centralised revenue-critical teams
Because of this shift to the here and now, organisations have responded in two ways. First, they’ve had to leverage massive amounts of customer data to be more methodical in their responses. Their Sales, Marketing, and Services teams have made it a point to understand customers more than customers understand themselves.
Second, organisations have had to break down silos between revenue-critical teams so customers can experience a seamless, connected process. This means enforcing new methods of collaboration and integrated work streams.
Why revenue leak
Businesses have rightly moved to centralise their revenue-critical teams, which has exposed breakdowns in revenue processes, data, and technology. This isn’t a bad thing! This is the visibility necessary to find previously unrecognised revenue leak and unattributed revenue loss.
Until businesses manage to centralise their revenue-critical teams, they continue to rely on systems that are three decades old: CRM, Excel spreadsheets, and BI. Unfortunately, these tools and systems are manual, complex, siloed, and outdated. Put simply, they weren't built to support the end-to-end revenue process.
Disparate data, disconnected handoffs between departments, poor deal health, lack of forecasting visibility, and other challenges exist in many organisations. These all equate to revenue leak and lead to missed opportunities and lost revenue, which is totally avoidable.
Every company, even the most established, has some form of revenue leak. The good news is that new methods exist to identify and reduce its severity. You can use advanced tools to spot and monitor revenue leak in your organisation. But first, you have to understand what it is, where it’s hiding in your organisation, and how you can stop it.
Spotting the risks and stopping the leak
So, how can you stop it? Spotting the risks early can only be done once you have visibility into what’s happening in your pipeline, then it can be managed and prevented from happening again. Your organisation can take several actions to stop losing revenue now and prevent future leak. Examples include:
1. Automate your data capture by using tools to ensure accuracy
A revenue operations platform can cull data from a variety of sources, including email, calendars, CRM, and more, creating that shared source of truth that is up to date at all times.
2. Ensure data transparency and leverage AI insights
Revenue teams should regularly review deals in their pipeline to prevent deal slippage, looking for signals of whether they are healthy. By using sophisticated AI and machine learning, you can also analyse current and historical data to produce actionable insights for teams.
3. Streamline communication and improve handoffs
The entire revenue team needs to work together to move a prospect along the sales funnel. This requires excellent communication. Everyone from marketing to sales to customer success needs to be on the same page, looking at the same information. Automation helps ensure that deal information is accurately updated in real time. Tools that gather this information and present it in a single, unified format across teams are critical for promoting effective communication and collaboration.
Finding the solution
It’s critical to identify where your organisation is leaking revenue so that you can diagnose the problems and plug the holes. It’s also important to assess the impact it can have on your business and recoup the lost revenue, which is particularly critical for SaaS businesses, as they rely on this money to fund top-notch customer service, innovation, research, and growth.
Revenue leak doesn’t have to be a thorn in your organisation’s side as long as you have the right processes and tools in place to manage it and prevent it happening in the first place.