Aaron Ross' Predictable Revenue turns nine

During the midst of a global pandemic, we revisit “The Sales Bible of Silicon Valley,” Aaron Ross’ Predictable Revenue, for advice.

 

Predictable Revenue: Turn Your Business Into a Sales Machine with the $100 Million Best Practices of Salesforce.com

By Aaron Ross and Marylou Tyler 213 pages. Pebblestorm Publishing, July 2011.

 


"The Sales Bible of Silicon Valley"

Predictable Revenue was self-published in 2011 by Aaron Ross, Co-CEO of PredictableRevenue.com, keynote speaker, and 2020 inductee to the Sales Hall of Fame.


From 2002-2006, Ross was a Sales Director at Salesforce. In September 2002, the four-year-old company had 5,000 customers and 70,000 users globally. By 2004, Salesforce IPO’d. By the end of 2006, Salesforce had ~$500M in revenue, and was being hailed as “the leader in the Next Big Thing in its industry: on-demand software”—what we now call SaaS.



From 2002 to 2006, Salesforce’s sales efficiency metric was >1, meaning the company made $1 or more on every dollar of sales and marketing than they spent.  Ross had joined one of the fastest growing SaaS companies on record.




Source: Tom Tunguz



What is Predictable Revenue about?

Predictable Revenue is targeted to sales leaders and their teams, and occasionally has callouts for CEOs. Its aim is to help companies shift from organic to proactive growth. The core idea is that consistent top of funnel activity + consistent process = predictable revenue. This is especially true when you are first to market with a classic disruptive technology (e.g. SaaS CRM).

Chapter 1 introduces us to Ross’ experiences before and at Salesforce.com, and sets up his belief that the secret to year over year growth is to generate high-quality sales leads. A constant flow of new customers helps create predictable revenue.

Chapters 2-3 focus on “cold calling 2.0” techniques. Chapters 4-6 address creating repeatable and scalable sales process, and chapters 7-11 cover sales hiring, leadership and management themes. Now-familiar ideas such as “don’t sell too low” within an organization, “shift your fiscal year” to maximize end of quarter closing opportunities, and “sales-customer success pods” are introduced.


Three takeaways

  • Identify your ideal customer profile: be laser focused on targeting the right prospect

  • Specialize your sales teams, with SDRs doing prospecting (outbound)), MDRs (inbound), Account Execs closing new logos, and Customer Success Managers “farming” existing customers.

  • Empower salespeople to be “mini-CEO’s” of their territory. Create “self-managing” sales systems and repeatable processes.


Flash-forward to August 2020

Predictable Revenue was published nine years ago. It reflects B2B Enterprise sales techniques used fourteen to sixteen years ago, during a period of explosive growth and innovation at Salesforce when the company was the first cloud CRM offering.


Some of the core tenets of Predictable Revenue are just as relevant today as they were when the book was originally published in 2011. However, “consistent top of funnel activity + consistent process doesn’t always equal predictable revenue.” What happens if your Ideal Customer Profile (ICP) has evolved over time? Or you don’t have product-market fit?


Two current market trends are worth noting:

  • As venture capitalists continue to invest in SaaS companies, the market has become increasingly competitive. With increased competition, the customer acquisition cost (CAC) or cost of acquisition (COA) are increasing to the point where the traditional strategy of driving as much top of funnel traffic is no longer feasible.

  • High CAC combined with cautious spending during Covid-19 has accelerated the adoption of Account Based Marketing (ABM) and Account Based Selling (ABS) methodologies.


While the SaaS market has changed since Salesforce’s rise in the early 2000’s, viewing your business from the perspective of your ideal customer remains solid advice. Prospects and customers are ready to spend time right now, not money. Revisiting your ICP and the customers who love your product is an investment in future growth.