REVENUE

PRICING, FORECAST, AND CUSTOMER PROFILES

WADE LARSON
WHAT IS REVENUE IN THE FIRST PLACE?

THE CHEAPEST AND MOST

SUSTAINABLE SOURCE OF FUNDING
FOR YOU COMPANY! 

2
REVENUE AND BUSINESS MODEL

DEFINE YOUR CLIENTS

B2G B2B B2C B2B2C 

SaaS
Licensing
Commissions
Referral Fees
Freemium …..
Many more 
3
Pricing Strategy
Strategy Description
Cost plus Take the cost of providing the service/product and
add margin.
Value based Set the price based on the perceived value.
Hourly For service businesses you can do time & materials.
Fixed A set price for a pre determined amount of time.
Performance Charge customer based on a pre-determined
outcome.
Need to Know
Key Financial Relationships
Revenue - Cost of Goods Sold = Gross Profit
Gross Profit – Expenses = Profit

Major KPIs
CAC = Cost to Acquire a Customer
LTV = Lifetime Value
ARPU = Average Revenue per User
ACV = Average Contract Value
Margin
Pricing Bands
Price Range Impact on Impact on Impact on
(annual) Sales Marketing Support
0 – 0.5K - Drive revenue - Content based
0.5K – 1K N/A generation - Email support
- Organic &
1K – 5K Referral as - Live chat
primary tactics
5K – 15K - Inbound - Ad spend shifts - Phone support
15K – 50K - Lead grooming to a core
- Extension of strategy
Marketing team
50K-100K - Outbound - Account based
100K+ - Relationship marketing - Dedicated
Selling - Extension of
- Long sales Sales team
cycle
First Revenue – Where to start?
Positioning
- Persona (individuals)
- Their problem(s)
- Demographics
- Responsibilities
- Habits
- Competitors
- Value proposition
- Product features/Services
- Funding
- Revenue
- Marketing Tactics
Validating
 Interviews
 Confirm persona
 Deeper understanding of the
problem
 Buying habits
 Funnels
 Customer Journey
 Channels
 Assumptions
 Experiments
First Revenue
Not all customers are created equal.

Type of Customer Value

Personal Friend NONE
In your network Some
Referred Good.
Cold Amazing!
Referred from Cold You have a business!
Scaling Revenue Fundamentals
• Market Positioning
• Product Validation
• Customer Journey per Channel
• Analytics & Reporting
• Planning & Goal Setting Process
• Know your weaknesses
Who is Responsible for Revenue?

EVERYONE!!!!
Who is Responsible for Revenue?
Department Responsibility
Sales Relationship Management
Marketing Demand Generation
Support Retention
Leadership Key Accounts & Markets
Product Referrals
Investors Introductions
IT Service Availability
HR Employee retention and company network
Finance Cash flow
Operations Experience
REVENUE FORECAST: TOP DOWN
CONTEXT

Estimate market potential Top-down often assumes

Determine adoption rate that you’re relying on
Predict your market share market data rather than
internal historical data to
generate forecasts
Revenue target potential
REVENUE: BOTTOM UP
TACTICS
Inbound, outbound, partner
Pipe x Win% x Velocity
Historical data + new strategy
Revenue achievement plan
Based on estimating a
company’s future
performance by starting
with low-level historical
company data and
working “up” revenue
REVENUE PLAN
MINDING THE GAP

TOP THE BOTTOM

DOWN GAP UP

TAM, SAM, SOM1 Channel tactics & budget Pipeline estimates

Investor/exec assumptions Performance optimization Historical quota achievement
Adoption lifecycle2 New sales hires (quotas) Historical channel performance
Sales quota allocation Revenue levers (win rate, New revenue sources
velocity increases)
WHERE WILL PIPELINE COME FROM?
MARKETING FORECASTING LEADS

Why measure in Opportunities?

Create and track monthly forecast by channel

Are there gaps between target monthly pipeline and OPPORTUNITIES

forecasted opportunities?

How will they be covered?

Is there additional budget or do you need to think

outside of the box?
 Marketing Plan Example – Monthly Targets
Jan Feb March April May June July August Sept Oct Nov Dec
PPC 2 2 2 2 4 5 5 5 5 5 5 4
Paid referral 2 2 3 3 3 3 3 3 3 3 3 6
(Capterra )
Tradeshow 0 0 0 0 4 2 0 0 0 0 0 0

Social/ 0 1 1 1 1 1 1 1 4 2 2 2
Resource
Organic 3 4 4 4 4 5 5 5 6 5 5 4

Outbound 1 2 2 2 2 4 4 5 5 5 5 4

Opps 8 11 11 12 18 20 18 19 23 20 20 20

30 50 60 60
MONTHLY TARGETS
Tactic/Campaign Goal Actual Difference
Industry emails - Tourism 4 4 0
Industry emails - Higher Ed 4 3 -1
Tradeshow 6 2 -4
eBook/Key resource 2 1 -1

Website Inbound 14 17 +3
Outbound Call outs 8 4 -4
Paid Social 2 0 -2
New Webinar 3 0 -3
Internal Referral 0 1 +1
Total 44 32 -11

How can you still reach the target? Track against goals every week & adjust
Target another industry? Arm BDR’s with new content? Increase social budget & target webinar
attendees?
WHO IS YOUR PLAN TARGETING?
SEGMENTS

Buyer + Context + Reach

• Identify a sufficient customer group
Similar product / service needs
Similar buying process
Accessible (access to lists, contact info)
Large enough for business success
Experiment with small sample-> invest & expand if you see results

• Understand what initiates the buying process. What context is required to prompt
buying decision

• Establish whether you have access to the buying group:

Lists/Associations/Tools/Social Connections/Existing database/Referrals
WHO IS YOUR PLAN TARGETING
IDEAL CUSTOMER PROFILE
Role
What is their job role? job title?
How is your job measured?
What skills are required?
What knowledge and tools does the buyer use?
Who do they report to? Who reports to them?
How does the buyer research new products
Goals
What are they responsible for?
How is their success measured?
What are their biggest challenges?
How can they overcome these challenges?
What is impact on other roles/organization?
Company
Industries with highest win rate/opp volume
What is the size of the company (rev, employees)?
How do they learn about new information?
How are major purchasing decisions made?
What approval process legal/IT/exec is mandatory?
Triggers
What drives the purchase in the organization?
New hires associated with the project
Related technology upgrades
Acquisition/merger events
Geographical/location expansion
EXAMPLE: VISITOR MANAGEMENT
IDEAL CUSTOMER PROFILE

Profile Type Profile 1 - Best Profile 2 - Good Profile 3 - Caution

Action Proactively campaign Qualify from inbound Approach with caution,
into, expand on inbound disqualify early

Industry Manufacturing, Tech Biotech, Oil & Gas Higher Ed, Government
Titles Compliance Officer, EHS Security, IT Procurement, Reception
Tech Salesforce, Lenel Everbridge, Okta Microsoft Dynamics
GEO North America, EMEA South America, Australia East Asia
Core need Compliance, Contractors Brand, Digital Office Employee check in
Corp. Structure 5+ sites, Campus, Owned >5 sites, lease Multi-tenant lease
Triggers Regulations, geo Merger, New construction,
expansion, Facilities/compliance physical security project
standardization Director Hire
QUESTIONS
REVENUE FORECASTING
CONTRIBUTION

#Opps x Win Rate% x Velocity E.g. B

% of contribution 50% Marketing
30% Outbound sales
E.g. A 20% Channel
- 70% Marketing
- 20% Outbound sales E.g. C
- 10% Partner 90% Marketing
10% Outbound sales
Correlate budgets/headcount with
expected % of revenue contribution!
REVENUE FORECASTING – 12 MONTHS
EXAMPLE
Eg. Marketing Calculation
$2M – Total Revenue Target, 67 New Customers
75% - Marketing, 25% Outbound Sales 2M x 0.75 x 4 = 6M Required Pipeline
25% - Win Rate
$6M - Required Marketing Pipeline 6M / 30K = 200 Opportunities/year
$30K - Avg. Sale
Q1- 30 Opportunities
Y: 200 - Marketing Opportunities/year
Q2 - 50 Opportunities
Q: 30/50/60/60 Opps each quarter Q3 - 60 Opportunities
M: 8/11/11 in Q1 Q4 - 60 Opportunities

25% - Outbound Sales Contribution Q1 Monthly targets:

8 + 11 + 11 = 30 Opportunities/Q1
$30K AOV, 25% Win Rate, 2M – Required Pipe
67 Sales-driven Opps/year