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How I determine if a revenue goal is feasible.pdf

Garrett Ira
Garrett Ira

This document discusses how to determine the feasibility of a $20M revenue goal by analyzing historical data on pipeline and revenue sources. It presents two extreme scenarios: 1) relying on the "default plan" of increasing all sources equally without regard for their effectiveness, and 2) focusing only on the top two most efficient sources and removing all other investments. The document argues that the right plan lies between these extremes and that analyzing source-level data helps uncover key questions to have an informed discussion about feasibility and the optimal strategy. The analysis arms stakeholders with data to determine whether the goal is feasible based on resources, execution ability, and other factors.

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How I dissect a revenue goal to determine feasibility [B2B Analysis]
Lets use an example scenario. The business needs to grow by $20M this year.
Net New vs. Expansion Determine what % will come from net new vs. expansion. Then, what % of net new will be sourced by marketing.
Use the historical win rate to determine pipeline $ needed to hit the revenue target. Youll use these figures whether youre goaled on pipeline or revenue. Uncover Pipeline Target
I label this the default plan because its often the first plan finance comes up with. Marketing needs to create $25M in pipeline. But the conversation shouldnt end here. Lets keep going Default Thinking
Source-level analysis uncovers the truth about your ability to drive pipeline & revenue with any given big bucket investment. Next, pull historical pipeline & revenue contribution by source.
Website & Events drove 82% of the revenue on just 54% of the pipeline.
All other sources combined to drive 18% of revenue on 46% of pipeline.
And it exposes a flaw in the default plan. The default plan assumes we need $25M in pipeline to hit $5M in revenue without regard for pipeline sources. Some programs are performing much better than others. We need to account for that. Weve just uncovered a key insight.
Lets see how the default plan pans out before we come up with a new one.
Extreme #1 Default Plan We need to hit $25M in pipeline. Thats 36% higher than last year. Each pipeline source needs to contribute 36% more to get there.
Extreme #1 Default Plan Lets keep doing the same stuff. Well either need more resources or bet that efficiency will improve.
Extreme #1 Default Plan Questions this should spark: Do we have evidence that each source can scale predictably? Are we increasing budget across sources to drive improvement? If not, what evidence do we have that efficiency can improve? Is it optimal to mirror the same activities as last year?
Website & Events are crushing it, both in total contribution and efficiency. Theyre delivering ~4x more in revenue for every dollar in pipeline vs. other sources. Now consider an alternative plan.
Which begs the question: What if we only put our eggs in the two proven baskets (website/events)?
If we can invest in programs that drive website & event pipeline, and historical funnel efficiency holds, it would take just ~$17M in pipeline to hit the $5M revenue targetnot $25M. Removing inefficient investments
Extreme #2 Alternate Plan Since were only relying on efficient sources, the pipeline requirement is reduced significantly...
Extreme #2 Alternate Plan ...to yield the same 36% increase in revenue YoY.
Extreme #2 Alternate Plan Ditch all the inefficient sources. Well only invest in proven business drivers.
Extreme #2 Alternate Plan Questions this should spark: Do realistic approaches exist to scale at this level using 2 sources? If we make this bet and find out they cant, how will we pivot? Is a plan this narrow sustainable, given the lack of diversification? Can we shift strategies in ABM and Partner to improve outcomes?
The default plan could be viable, but assumes we need to keep investing in inefficient programs. The alternate plan could be viable, but leaves zero room for error and severely limits your options. The right plan typically falls between the 2 extremes.
Whether or not the goal is feasible depends on many factors resources, category momentum, audience, program maturity, execution ability, & more. Using data to set context and uncover the right questions will help you and your team form a more unified answer, together. The point: Youre now armed with data to have the conversation.
Build a strategy that creates predictable pipeline. DM me or book a consultation at methodrevenue.com

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How I determine if a revenue goal is feasible.pdf

  • 1. How I dissect a revenue goal to determine feasibility [B2B Analysis]
  • 2. Lets use an example scenario. The business needs to grow by $20M this year.
  • 3. Net New vs. Expansion Determine what % will come from net new vs. expansion. Then, what % of net new will be sourced by marketing.
  • 4. Use the historical win rate to determine pipeline $ needed to hit the revenue target. Youll use these figures whether youre goaled on pipeline or revenue. Uncover Pipeline Target
  • 5. I label this the default plan because its often the first plan finance comes up with. Marketing needs to create $25M in pipeline. But the conversation shouldnt end here. Lets keep going Default Thinking
  • 6. Source-level analysis uncovers the truth about your ability to drive pipeline & revenue with any given big bucket investment. Next, pull historical pipeline & revenue contribution by source.
  • 7. Website & Events drove 82% of the revenue on just 54% of the pipeline.
  • 8. All other sources combined to drive 18% of revenue on 46% of pipeline.
  • 9. And it exposes a flaw in the default plan. The default plan assumes we need $25M in pipeline to hit $5M in revenue without regard for pipeline sources. Some programs are performing much better than others. We need to account for that. Weve just uncovered a key insight.
  • 10. Lets see how the default plan pans out before we come up with a new one.
  • 11. Extreme #1 Default Plan We need to hit $25M in pipeline. Thats 36% higher than last year. Each pipeline source needs to contribute 36% more to get there.
  • 12. Extreme #1 Default Plan Lets keep doing the same stuff. Well either need more resources or bet that efficiency will improve.
  • 13. Extreme #1 Default Plan Questions this should spark: Do we have evidence that each source can scale predictably? Are we increasing budget across sources to drive improvement? If not, what evidence do we have that efficiency can improve? Is it optimal to mirror the same activities as last year?
  • 14. Website & Events are crushing it, both in total contribution and efficiency. Theyre delivering ~4x more in revenue for every dollar in pipeline vs. other sources. Now consider an alternative plan.
  • 15. Which begs the question: What if we only put our eggs in the two proven baskets (website/events)?
  • 16. If we can invest in programs that drive website & event pipeline, and historical funnel efficiency holds, it would take just ~$17M in pipeline to hit the $5M revenue targetnot $25M. Removing inefficient investments
  • 17. Extreme #2 Alternate Plan Since were only relying on efficient sources, the pipeline requirement is reduced significantly...
  • 18. Extreme #2 Alternate Plan ...to yield the same 36% increase in revenue YoY.
  • 19. Extreme #2 Alternate Plan Ditch all the inefficient sources. Well only invest in proven business drivers.
  • 20. Extreme #2 Alternate Plan Questions this should spark: Do realistic approaches exist to scale at this level using 2 sources? If we make this bet and find out they cant, how will we pivot? Is a plan this narrow sustainable, given the lack of diversification? Can we shift strategies in ABM and Partner to improve outcomes?
  • 21. The default plan could be viable, but assumes we need to keep investing in inefficient programs. The alternate plan could be viable, but leaves zero room for error and severely limits your options. The right plan typically falls between the 2 extremes.
  • 22. Whether or not the goal is feasible depends on many factors resources, category momentum, audience, program maturity, execution ability, & more. Using data to set context and uncover the right questions will help you and your team form a more unified answer, together. The point: Youre now armed with data to have the conversation.
  • 23. Build a strategy that creates predictable pipeline. DM me or book a consultation at methodrevenue.com