Growth Driver #5 – Identify Growth Themes

Granular analysis of growth  yields valuable insights into growth themes and informs Sales Model adjustments.

In today’s low growth and volatile economy, it is difficult to identify persistent growth themes and realign the Sales Model to achieve more persistent growth. What’s needed is a more granular pattern of analysis to identify where growth is occurring. To get granular, we recommend Win, Grow, and Own Analysis (WGO).  At its highest level, WGO analysis identifies the provenance of revenue growth  from three sources:  (1) recurring business with existing customers that you retain or “Own” year-over-year; (2) new business with existing customers that represent “Growth” within existing accounts; and (3) new business with new customers that represent incremental customer “Wins” for your company.

Then WGO drives deeper  to identify growth themes within each source. To do this, iterative analysis is performed  at finer levels of detail, within each source, such as by:

  • Customer segment
  • Sub-segments
  • Geography
  • Region
  • Sales channel or team type
  • Sales territory
  • Product/Service

Let’s take a look at the example  of how iterative analysis can enable the identification of growth themes and adjustment of one’s sales model.  In this example previous year’s sales were $10 million and  this year’s sales were $10.72 million.  How did this growth come about and, equally importantly, could it have been greater?

The first thing that stands out is the $2.35 million of customer “churn” experienced.  Some of this non-recurring business may be natural; i.e., there always has been and always will be a certain number of one-time buyers. But, in this case, churn is clearly the first area of investigation. If churn can be  minimized with effective customer retention strategies, then the company stands a much greater chance of efficiently achieving year-over-year sales growth.  “Owned”  revenue forms the foundation upon which revenue growth and  sales efficiency are built.  And, in this situation, the company has proven itself very capable of generating $2.45 million (24.5% growth) in revenue growth from further penetration of existing accounts. Lastly, while “Win” revenue represents a much lower component of overall revenue, closer inspection shows that 6.2% growth through new customers is a an extremely competitive rate of growth, compared to the competition. This makes the acquisition of new customers, that are not “one-timers” but are sticky and more likely to buy more, a top priority along with more effective account retention.

Let’s take a look at how the WGO analysis can be applied, with more granularity, to sales reps.  The table below further breaks-down the revenue analysis we initiated earlier by analyzing the revenue and profit contribution of individual sales reps. This level of analysis offers terrific insights on which reps are leading performers and which reps are lagging performers.  Sales leaders can build upon these insights, particularly with the addition of sub-segment and product level analysis, to identify best practices that can be used to refine strategy and tactics.  This knowledge also empowers sales leaders to define credible performance benchmarks that are supported by fact versus being simple “wet finger in the wind” aspirations.  The implications for coaching, training and personnel decisions are apparent.

For instance, Jowan Petrovic in the above example is clearly a standout at retaining revenue and penetrating existing accounts. However, new business generation is not his strong suite. With this insight, his manager should dig deeper and further profile his revenue. In this instance, further profiling revealed that the products Jowan sells into existing accounts are different that those he attempts to sell into new accounts, highlighting either a need for potential training or the segmentation of Jowan’s role, to exclude selling new accounts. In contrast to Jowan, there is Joe Bong, who is great at winning accounts, but terrible at owning accounts. In Joe’s case, there’s clearly a need to dig in and analyze the types of accounts he is acquiring, as well as his account management skills and approach.

If you have not granularly decomposed where and how growth is occurring in your company, it’s time to get busy and apply WGO analysis, it will help you quickly identify growth themes, provide a fact base for high value conversations between Sales Managers and Reps, and it will enable you to make adjustments to your sales model to achieve higher levels of efficiency and effectiveness.

We are half way through our 10 Growth Drivers for 2013. Catch up on the first four tips here:

  1. Growth Driver #1 – Confirm Your Revenue Model
  2. Growth Driver #2 – Increase Your Value
  3. Growth Driver #3 – Sell the Way Customers Buy
  4. Growth Driver #4 – Pursue a Mix of Revenue Gains and Drains


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