Predictable Revenue
Aaron Ross & Marylou Tyler
I've spent the last 10+ years together with commercial and marketing teams analysing the quality of leads that come in. During that time of helping getting dialogues over the finish line to become customers, one thing that I've never heard is:
"Our pipeline is so full, we can't take any more meetings."
That was the dream that was presented when you read Predictable Revenue by Aaron Ross. Building a sales pipeline so effective that the prospecting, cold calling and lead generation would take care of itself. Your lead magnets and marketing would fill up your calendar with highly qualified leads, and all you needed to do was show up and take the money.
Oh how wrong we were. And fast forward to today with all of our fancy AI tools, we're still wrong.
AI enters the chat.
It is faster, more targeted, costs less. You can hire 20 of them in a blink of an eye for the cost of lunch.
Had we followed the pattern, it would be the logical step forward.
But there is a trap hidden inside Aaron Ross's Predictable Revenue. The book is a masterclass in building a lead generation engine, turning the "cold call" into a cold email and separating hunters from farmers. It's the blueprint for the $100 million revenue machine.
Yet, many companies follow this blueprint to the letter only to find that while their revenue is predictable, their loyalty is non-existent.
Applying this with AI still is not getting the promised results as the fundamentals are still flawed.
Fuel for the engine.
The Prospector Mindset
In business, we often slip into 'prospector mode.' We treat customers like a quota and not as a multi-year, long term commitment. A bit like fuel for the engine. Once they've been burned to create a spark (the sale), we're already looking for the next refuel.
We tell ourselves that a signed contract is the finish line. We assume that if the onboarding went well, the customer is 'loyal' and is going to stick around. If they don't, well clearly customer success didn't do their job properly. We mistake a predictable pipeline for a predictable relationship.
The reality? Building a massive lead pipeline doesn't impact your loyalty one bit. In fact, if you aren't careful, the 'Predictable Revenue' model creates a factory mindset that treats human beings like data points.
I've seen it more often than not. The biggest leak isn't actually that the customer is wrong. Most often than not they have purchased something that they believe is going to be the right fit. It's more often that the white-glove treatment that they've received during the sales process is dropped, and a handover to an account manager is neither properly documented or prepared for this partnership.
Very few companies have mastered this handover process, and thus a large reason of a lot of churn due to unmet expectations.
We should rethink the "Farmer" Role
Ross talks about 'Farmers' (Account Managers), but in the quest for predictable growth, these roles are often under-resourced compared to the 'Hunters.'
To keep them forever, our hypothesis needs to shift:
The Old Way
Revenue is the result of a great sales process.
The New Way
Revenue is the byproduct of a customer who feels continuously served long after the commission has been paid.
The future doesn't belong to the company with the loudest outbound engine. It belongs to the one that uses that engine to find the right people, and then spends the next decade proving they made the right choice.
That warm fuzzy feeling inside.
What I got out of it
Fundamentally, the book is brilliant, and an essential read for anyone trying to scale. The 'Cold Calling 2.0' framework is well crafted and effective. But it left me thinking about the void that occurs once the Predictable part of the revenue is achieved.
If you build a business to find customers but don't have a sustainable and scalable way to keep them, you've just built a very expensive revolving door of customers.
What you can think about for your business
Here are a few questions to get your mind racing:
- Is your "Success" team just a "Retention" team? (Are they solving problems or just stopping cancellations?)
- What happens to your customer 18 months after the sale? Do they still feel the same "love" they felt during the prospecting phase?
- If you stopped all outbound activity today, how long would your current customers stay?
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