At the beginning of the month, we discussed our proprietary business development methodology, the Revenue Factory. Well, today concludes our “Revenue Factory” month here at Vizquest Ventures. To wrap-up the month, we thought it’d be nice to summarize the highlights of our articles throughout the month, then discuss how each methodology component fits together to operate and run our Revenue Factory. For those of you who have followed us throughout the month, you’ll find this article to be a nice review. For the new-comers to our blog: Welcome! If you’d like the full run-down of our Revenue Factory, I highly encourage you to read our blog posts from January. With that said, let’s take a look at how the Stage-gate, Lean, and 6-Sigma models collaborate in order to provide quality VSOs and maximize yield-on-sales capacity.
First and foremost, the founding principle of the Revenue Factory is to improve the yield on sales productivity with quality VSOs, as opposed to generating leads. The yield on sales capacity represents the actual revenue produced/maximum potential revenue capacity, which is indicated by a company’s highest potential revenue per sales rep. In other words, the maximum revenue capacity of a company with a potential of $1M in revenue per sales rep and 5 sales reps would be:
($1M potential revenue/sales rep) x 5 reps = $5M maximum revenue capacity
One of the ways that our Revenue Factory maximizes revenue capacity is its ability to generate VSOs as opposed to leads. A VSO is a “Validated Sales Opportunity,” which means that instead of getting a lead/contact that might result in a sale, we’ll find the direct way to the decision maker that can implement your product, increasing the chance of closing a deal. Typical “leads” convert 1-3% of the time, while VSOs convert 30-50% of the time. To relate it to our allegory, the better the material (VSO > common lead) you put into the factory, the better the quality of the product (maximum revenue capacity).
Now the question becomes this: “How can you determine who the VSO is?” We get that a lot, but we’ve done it time and time again to the point where we’ve mastered the process. The backbone of finding the VSO comes from the way we run the Revenue Factory: The Stage-Gate Sales Process. We run every new campaign using a stage-gate model in order to ensure the highest, quality results. The stage-gate process can be broken down into 5 stages:
- Gather Info: First, we gather all the necessary information: what’s your product? What makes it superior? How do you want your product to be presented? etc.
- Immersion Framework: Here is where we create the value proposition, but also determine possible objections and obstacles. We sit with our client to go through the immersion framework in order to fully understand their exact needs.
- Independent Research: After that, we conduct independent research with the target market, as well as analyze trends with competing products; we find a need in the target market that competitors cannot satisfy.
- Campaign Set-up/Train Team: Once the research is complete, our development team validates each contact across multiple sources like Jigsaw, Linkedin, and InsideView. At the same time, our sales team is trained to ensure their effectiveness during the campaign.
- Run Campaign: Once all of the previous steps are complete, at 110%, we’re ready to hit the ground running.
However, just because we went through The Stage-Gate Sales Process, that doesn’t mean the job is done. After we launch a campaign, our team keeps an eye out for ways to improve our current processes and produce better results. Vizquest accomplishes this task through utilizing principles from two methodologies: Lean and Six Sigma. Though not originally made for business, both Lean and Six Sigma’s popularity have grown in business because of their actionable methods to produce better results. Vizquest utilizes Lean’s methodology of improving workflow by reducing waste; its methodology believes that waste can appear in 3 forms:
Mura: uneven workloads
Muri: overburdening people, equipment, or the system
Muda: waiting, overproduction, and over-processing, among others
Alongside reducing waste, Vizquest uses Six Sigma’s methodology to reduce variation and defects, thus improving process yields; we’re able to do this through Six Sigma’s DMAIC model. DMAIC stands for Define, Measure, Analyze, Improve, and Control. First, we define the problem when it occurs and ensure everyone knows the purpose of the process. Then, during the Measure phase, we collect data to establish a baseline for improvement. Once we have a baseline, we identify, validate, and select root causes of the problem, thus determining how much each root cause contributes to the problem. After that, we implement the solution(s) that correct each root cause to the problem. Finally, we sustain our improvements by establishing a control plan. Once we measure the post-DMAIC results, we compare those metrics to the data gathered in the measured stage; this determines how significant our improvements are.
By utilizing the Stage-gate, Lean, and 6-Sigma models, Vizquest Ventures can help you maximize your yield-on-sales capacity. We create a steady stream of VSOs thanks to the Stage-Gate process that runs our framework. Once we create a steady stream of VSOs, you can accurately calculate your maximum revenue capacity based on your maximum potential revenue. After we lay out the framework, we can launch the campaign and guarantee its success. During our campaign, we will use Lean and Six Sigma to continuously improve performance by systematically eliminating waste. All of these methodologies (Lean, Six Sigma, and Stage-Gate) fit together seamlessly to create the Vizquest Revenue Factory; the Stage-Gate process symbolizes the set-up, layout, and production process, Lean and Six Sigma are the quality control of the machines (our sales team) in the factory, and VSOs are the highest quality materials that drive the factory, but the only part you need to worry about is the product that our Revenue Factory produces- your maximum revenue.