Sales Capacity

Sales Mastery: Managing Risk and Embracing Diversification for Optimal Growth

Sales is an endeavor that requires a healthy ego and aggressiveness. Timid, risk averse individuals are less likely to thrive, particularly in tech sales where the market for new products can be extremely volatile. And yet, a healthy awareness of risk is necessary to capitalize on opportunity.

“If you are not aggressive, you’re not going to make money, and if you’re not defensive, you’re not going to keep money”
-Ray Dalio

Renowned investor and thought leader Ray Dalio extensively discusses risk. Dalio emphasizes managing risk as a key feature of his business in a twofold manner: Identifying low-risk, high-gain opportunities and diversifying one’s portfolio.  

Instead of hindering forward-leaning revenue teams with micromanagement, how can revenue leaders help their teams follow Dalio’s advice?  

Sales and customer success teams are often the first to identify new opportunities, new messages that resonate, and capabilities or impacts that speak to the customers, especially those in more experimental segments for a company’s product. Balancing growth by optimizing for proven segments and experimenting in newer segments gives the business a diversified portfolio (aka pipeline).

To truly make the most of the diversified portfolio and manage risk, teams must be able to focus and deliver based on insights from customers.

Military theoretician Werner Von Clausewitz referenced the concept of “Schwerpunkt,” which means ‘focus’ or ‘main effort.’  Later, German military innovators adopted this concept to create Blitzkrieg, or “Lightning War.” The idea of Schwerpunkt in Blitzkrieg is that a forward unit would find a gap in the line. The commander would then deploy available forces to exploit this discovered weakness. Personal note: it helps to have been surrounded by military people who talked incessantly about strategy at the beginning of my career.  ;) 

Similarly, using processes and tools to support these revenue teams is the way for the company to quickly identify gaps and exploit them.   

While almost every company uses tools like CRMs (e.g. Salesforce) and agile project management tools (e.g. JIRA) to track progress on the revenue and technical teams, far fewer integrate these tools and examine resulting insights to enable continual opportunity identification and risk mitigation. 

Two questions you should ask yourself are

  1. Do my sales and customer success teams use Salesforce just to record contacts with potential customers, or do they use it to identify and track the revenue-potential of needs and trends in both existing customer segments and possible new ones? 
  2. Do my sales and customer success teams continuously communicate with technical teams about insights emerging from the data above so that product teams can prioritize the highest gain opportunities for development?  

Sales and customer success teams are encouraged to know that logging their interactions and highlighting needs by current and potential customers is more than just a chore to show rate of contact. It’s a method for the business to understand the voice of the customer, identify new growth strategies, and improve customer satisfaction and retention.  

This customer-centric development approach gives the business confidence that the revenue and capacity plan they have documented and operationalized (in tools like Revcast!) reflects Dalio’s principles: sound assumptions about where to get aggressive to make more money while minimizing risk of loss.

Drive revenue performance by getting planning and forecasting right.

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