Many B2B companies are heading into 2023 with sales targets based on a desired growth trajectory. The logic is something like this: “Take this year’s bookings number and increase it by 50%. That’s our target next year. Does everyone feel good about that? Do you think we need more sales reps? Ok, let’s hire 3 more sales reps and give them each a $1M quota. That will do it.” I call this the “hunker” method, and I’ve seen it many, many times. The executive team huddles up and swears they can bring in that much more revenue if they hunker down.
Using RevOps to predict 2023 sales performance
Companies with a RevOps foundation approach goal setting a little differently. Their logic is something like this: “Using our current RevOps model and this year’s sales performance metrics, we will close $X in bookings next year. If we want to close more than that, our RevOps model tells us we can close 5% more bookings if we improve our Proposal sales stage conversion rate by 8%, and add 3% to our bookings number by increasing our average deal size by targeting retail businesses over $100M.” This is the RevOps method, and B2B companies are catching on to the power of this approach.
As you lay out your goals for 2023, ask yourself these questions.
- Do I have evidence my pipeline is large enough to hit my bookings target?
- Do I know exactly how many deals each rep needs to be working in each stage in their pipeline to hit target?
- Do I know how many leads marketing needs to produce to maintain the correct pipeline size?
If your answer is “no,” you may be using the hunker method.
The good news is you still have time to put a RevOps model in place for 2023. And your first RevOps model will be able to answer the above questions. It will actually tell you the exact goals for every step of your RevOps process – from marketing to inside sales to sales.
Once you have your models in place, you can add your optimization analytics so that next year, you can answer even more questions:
- What are the characteristics of target prospects that are more likely to close, more likely to close faster, or more likely to have a bigger deal size?
- Where in our RevOps process are the most significant problems? Where are the bottlenecks? What do we need to fix?
- What marketing programs are producing deals that close? How should we reorient our marketing budget to target higher potential prospects?
- What improvement scenarios will have the largest impact on our growth?
- How do I reduce wasted sales and marketing efforts and get the most efficiency from my growth function?
Kick-Start Your RevOps Annual Planning
If you haven’t started your RevOps transformation, 2023 is the year to do it. In uncertain times, having certainty over your near- and long-term forecast, good or bad, is essential. And knowing exactly what resources will produce what results help you make informed tradeoffs.
Take advantage of our RevOps Annual Planning Package to help you build your RevOps foundation. With ayeQ, you can document your RevOps process and model your annual bookings in just a few days. Reach out now to learn how you can accelerate your planning for 2023.