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Revenue Precision Holds the Key to Surviving Any Downhill Ride
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Revenue Precision Holds the Key to Surviving Any Downhill Ride

Revenue isn't just an outcome. It's a process that delivers precision.

In the mountains outside Park City, Utah, the phone rang. Kevin Knieriem stood poised to mount his bike, but when his chief executive officer called, he answered.

Early morning amid nature wasn’t exactly where Knieriem, the chief revenue officer of Clari, expected to discuss company performance with his CEO, Andy Byrne. He raced down, then sped home, where he pulled up the numbers. Within an hour of Knieriem taking off his helmet, before he’d even showered, Byrne heard what he needed.

“Andy, not only are we going to hit the number, but we’re going to blow the number away,” Knieriem said. “What should we do about it?”

“I’m going to go raise money,” Byrne said.

Clari went on to raise a $60 million Series D round at a half-billion dollar valuation.

This was way back in 2019. Before Clari reached unicorn status twice over. Before the pandemic, even before what some economists and business insiders are predicting will be “a summer of hell” with “near Biblical” reckoning, according to Business Insider.

Having such a precise view of the entire enterprise revenue process proved key to building Clari. And it might be what gets smart companies through whatever the next year has in store.

Imagine if every CEO could have such confidence in their revenue, at any point in the quarter, in real time. That’s called Revenue Precision.

At a time when spooked investors are looking for profit-forward places to park their money, precision that leads to understanding exactly where the business stands at any given moment becomes a key differentiator. That holds true for venture capital funds looking for a rare opportunity in a downturn, or a public company staying afloat during market upheaval.

Revenue Precision, defined

Revenue Precision means that every revenue-critical employee has full visibility into their revenue process, which allows them to control the process to deliver reliable outcomes.

Revenue-critical refers to any employee who in some way impacts revenue - from sales and marketing, to finance and supply chain - which in most companies can be up to 50% of the staff or more.

For example, consumption usage businesses, where customers pay based on usage instead of a set fee, rely on precision forecasting to plan and build capacity. Can the chief revenue office accurately assess how much revenue the business will pull in, despite monthly fluctuations? Sales may know they need a certain amount of pipeline. But are the numbers aligned so everyone is working towards the same metrics, tied to an accurate forecast? Finance needs to sign off on budgets, but do they understand the business needs and goals in order to make informed decisions that support the health of the business?

Research by Clari lays bare the consequences of poor handoffs and wasted time: every time a deal slips - meaning its close date pushes further out into the future - its likelihood to close drops by a whopping 66%. If a company’s average win rate is 20%, that plummets to a 6.8% win rate for deals that slip. By using a Revenue Platform, teams can boost win rates by 12%, which has translated to over $10 billion in additional revenue across some 550 companies.

Revenue Precision represents the difference between ad hoc measurements and siloed teams versus teams working together with full visibility toward a shared goal that benefits the entire business.

As a business grows larger and more complex, the ecosystem required to generate and capture revenue also grows more complex. All revenue-critical employees need a way to collaborate. And if we’re heading for a downturn, every dollar counts.

Three big ideas drive Revenue Precision.

Visibility and transparency

The more visibility that every revenue-critical employee has into the business, the faster everyone can spot Revenue Leak and take steps to correct it. Transparency in data and metrics puts everyone on equal footing to know exactly what is being managed to deliver predictable revenue.

For sellers and managers, visibility and transparency means knowing exactly which deals are coming in, when, so they know how they will hit quota, and if not, where they should focus their efforts to turn deals around. Executives need to see the entire business at a glance, meaning reliable readouts on projected revenue at any time in the quarter — such as Knieriem’s readout to his CEO, still in bike shorts. They need to understand the pain points quickly at every level, in real time.

Collaboration

Once everyone has the same viewpoint on the data, they need to come together to collaborate on the processes. Every junction between people and teams must be revenue tight. The more complex your business, the more junctions there are.

Revenue-critical employees don’t just work in sales. Improving the handoffs between marketing and sales, for example, is just one key to limiting Revenue Leak. Everyone needs the same playbook, or shared source of truth. If marketing’s definition of a qualified lead differs from sales’, potential customers can fall through the cracks. If different sales teams all have their own definition of steps in their funnel, finance or customer service may not know when they’re needed, or jump in at the wrong time, also putting deals at risk.

Governance

Governance might conjure nightmares about audits and compliance reports, but forward-thinking leaders know it can be a plus too.

Governance provides the structure that supports collaboration and precision, and reduces Revenue Leak. With governance, you can ensure that everyone who touches revenue runs the processes that you want them to run, giving structure to collaboration. With governance, you can trust that everyone in the business followed the best practices to align with the forecast that executives see — providing them with confidence in that number. Compare that to a disjointed, manual process with disconnected results that leads to quarterly and annual guidance that no one trusts.

Executives need to feel in control of the business. They need to be able to understand everything going on in order to make informed decisions, and to cascade those decisions throughout the entire organization so every employee understands what their goals are, what meeting and exceeding performance looks like, and how to do it consistently, time and time again. Revenue with predictability and repeatability — that’s Revenue Precision.

Successful leaders ensure collaboration and governance are implemented across the depth and breadth of the revenue organization. From the front line to the C-suite, and across every part of the business, Revenue Leak needs to be identified, stopped, and optimized.

Unifying the data and metrics, connecting everyone around revenue, and continually monitoring and improving processes, allow businesses to sharpen their forecasts and stanch Revenue Leaks — key drivers to surviving even when your downhill sprint turns into a Tour de France-style uphill climb.

Learn how to navigate any downturn and protect your revenue with Clari’s guide.