If you could look 3-4 months into the future and predict how much new business you’d have and how many additional people you’d need to serve your new clients, what would those insights be worth? For professional services firms that rely on people as their product, that’s like striking gold.
But you don’t need a crystal ball or a time machine to ensure you have the right talent in place to match your future revenue growth. You just need a predictable revenue funnel.
A Delicate Balancing Act
Professional services firms invest in employees who are subject matter experts—people who not only have the capability to deliver the services their clients need, but who also differentiate the company as a thought leader. Whether you’re running a CPA firm, engineering firm, law firm, marketing firm, or any other professional services company, you know this talent doesn’t come cheap, especially in today’s tight labor market.
As a middle-market company, you don’t have the luxury of hiring boatloads of people and hoping you can keep them working at full capacity. Nor do you have the luxury of waiting until you have more business in hand before you start recruiting your next hire.
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Besides the fact that it’s time-consuming and expensive to hire and onboard new staff—with an increasingly longer lead time to get new employees in the door and up to speed—there is the very real risk that you could undershoot or overshoot your needs.
- If you hire too many people, you’ll end up with top talent sitting on the bench, which is a big drag on your bottom line. It can also cause good employees to become demotivated, anxious about their careers, or worried about the firm’s financial viability. That’s why you can experience churn even when you’re overstaffed.
- If you hire too few people, you won’t have the capacity to meet the needs of both your current clients and the new clients you’re attracting. Besides the inevitable burnout and churn, you might find the quality of your services suffering as your staff juggles too many balls at once.
How a Predictable Revenue Funnel Can Help
A predictable revenue funnel enables your professional services firm to forecast growth with greater accuracy, so you can match your hiring to your future capacity needs.
The revenue funnel is the cycle a buyer progresses through as part of the buying journey—from the time they first learn about your company/service to the time you close the sale. Your marketing must continually nurture them and move them further down the funnel, turning them into Marketing Qualified Leads (prospects who show interest), then Sales Qualified Leads (buyers who are in good position to buy and ready to be contacted by sales), and eventually closed sales.
A predictable revenue funnel is one that allows you to forecast the rate and velocity at which leads will come into the funnel and the rate at which you’ll convert those leads into sales.
Think about that for a minute: With the right revenue funnel, you can predict how many leads you’ll get, how fast those leads will come in, and how many leads will turn into sales. That’s a powerful position to be in!
What’s Holding You Back?
Given how effective a tool a predictable revenue funnel can be, you might expect that all professional services firms have one. Unfortunately, that’s not the case.
Many professional services firms have embraced modern marketing because they recognize it’s the only way to achieve a high ROI on their marketing investment. They’re likely to develop strategic marketing plans that are grounded in their business goals, using a mix of channels, campaigns, and assets to move the ideal buyer into and through their revenue funnel.
But what professional services firms sometimes miss is the science of marketing. To accelerate the rate at which new leads come into your funnel and the rate at which they turn into closed sales, you need to establish key performance indicators (KPIs), then test different approaches, measure how well they are (or aren’t) supporting those KPIs, and optimize what’s working best. That’s not a guessing game; it’s based on marketing analytics.
Employing marketing analytics is critical to modern marketing because it provides the data you need to know what’s working, what isn’t, and where to adjust to optimize your results. It’s also the only way to generate leads and turn them into sales in a predictive way. Analytics has become such an essential component of marketing that more and more companies are hiring marketing analysts as key team members, whether in-house or outsourced.
If your firm is focused on task-based marketing rather than measurement-based marketing, that’s another obstacle that could be holding you back from developing a predictable revenue funnel. Many marketing organizations are task-based (engaged in scattershot activities that don’t necessarily support the firm’s business goals) rather than measurement-based (aligning marketing actions with the business’s strategies and goals, then using concrete metrics to assess results). Task-based marketing rarely produces measurable results, and certainly not predictable results.
Putting a Predictable Funnel to Work
A predictable revenue funnel provides exactly what professional services firms need: The ability to forecast your lead generation and lead conversion rate with enough accuracy that you can time your hiring to match the influx of new business. Considering that the average salary for many professional services roles is in the six-figure range, hiring in sync with your incoming new business based on reliable metrics can make a major impact on your profitability, along with your service levels and employee morale.
Developing a predictable revenue funnel demands that you take a strategic, systematic, proactive approach to marketing. Sure, a single isolated campaign might drive more eyeballs in the short term, but it won’t deliver long-term, measurable results and it won’t provide any degree of predictability. It takes a strategic, systematic marketing effort to bring the ideal buyers into your funnel and continually nurture them all the way through their buying journey until they become closed sales—all at a predictable rate.
Developing a predictable revenue funnel takes time, commitment, and patience. It may take 12 months or more until you have the credible metrics you need to start planning your hiring around the growth your marketing generates. But when you’re playing the long game of high growth, it’s a small price to pay for an invaluable competitive advantage.
If you’re ready to develop a predictable revenue funnel for your professional services firm, schedule a free consultation with Marketri CEO Deb Andrews!