What to Do When You Hit the Invisible Sales Revenue Ceiling

Posted by Nick Niesen on October 28th, 2010

Have you ever hit a level of revenue that you just couldn't seem to break through?

If you have, then you know how frustrating it can feel.

You may even spike above this ceiling periodically. But, like water seeking its own level, your revenue results seek a sub-par level.

I once walked into a situation much like this. I assumed the position of Vice President in a relatively young company. I was immediately tasked with making the changes needed to solve the revenue problem.

The company, after nearly 2 years of business-to-business selling of their service, had met only 40% of their revenue expectations.

Finance told me they were "behind" projections and needed to catch up. And the executive team wanted to know how long it would take. And the CEO said we didn't have much time.

In this case, corporate had created a unique and valuable position in the marketplace. They had a sustainable competitive advantage. The service application worked, the product was needed and their offering was dramatically different from its competitors. Their Strategic Positioning was in place and healthy.

So why the invisible ceiling?

Sales leadership had failed to understand their meaningful business metrics. This was the primary reason, as it is in most cases. They had not isolated the essential competencies and components. Therefore, their people couldn't self-compete to reach and maintain revenue goals.

They failed to develop practices and processes that allow an individual to identify, train to and measure their own competencies and performance metrics.

In other words, they attempted to shortcut the "Blocking and Tackling" process to routinely meet revenue goals.

When you hit a revenue "ceiling," you have to go into diagnostic mode.

Ask the critical questions:

Which one of your Key Performance Indicators is causing you to fall short?

There may be several, but only one is the main culprit. As an example, the company I mentioned was fundamentally fine in turning first appointments into proposals. And they were maintaining an "average" closing ratio. Their sales cycle was within acceptable benchmarks.

Both competencies had room for improvement, but they were not the "smoking gun" at the scene of the crime. So what was the one culprit in this case?

What if I told you they were only generating 2 new appointments per week per sales rep?

Their average revenue per sale at this level of activity, when related to other competency and performance numbers, produces a 40% return.

Anyone can understand that something has to change operationally to grow the revenue. And what one item jumps off the page? In this case, as in many others, activity is the path of least resistance. They just needed to be taught how to generate routine opportunities in the least amount of time.

Everyone settles to his or her own level of "result".

That may be OK, but only if your comfort zone is consistently at or above the company's expectations. And when it's not, "Houston, we have a problem."

These kinds of problems cause a shortfall of revenue and unnecessary employee turnover, both of which carry "hard-dollar" consequences. I attribute it to having a "comfort zone" that is not all that comfortable.

So, there you are. You're having a hard time figuring out where it hurts. So you take an aspirin and hope it goes away.

Seek to understand how to break through this undefined ceiling. View your job as a business, your business, and evaluate it. Use the kind of diagnostic lens entrepreneurial business people use to scrutinize their enterprises.

Now, you can develop your own systems and processes, if you want. But maybe you'd rather not try to re-invent the wheel.

In which case, invest in mine.

Either way, the first step in busting through an invisible revenue ceiling is to identify and measure your essential core competencies. Then, develop powerful training systems to improve those competencies.

And you'll outperform your "comfort zone," your peers and your competitors.

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Nick Niesen

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Nick Niesen
Joined: April 29th, 2015
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