As competitive conditions change, even successful companies may face disruptions that require adjustments to their business model. Typically we see businesses shifting left and right along a business continuum as they pursue greater margins or scale.
On the left, the “Luminary Consultant” model is driven by high deal values, low volumes, high margins, and low scalability. The emphasis is on thought leadership and senior professional selling and referrals. On the right side, the “Commodity (or Standard) Products model is driven by low unit prices at scale, with typically lower margins. The emphasis is on digital marketing, repeatable sales process, and often product-led growth.
Between these two extremes, each model requires different marketing, sales, customer success, and account management models to suit the unique characteristics of the model. Many organizations may be executing different business models along the continuum at the same time.
As a business shifts left or shift right along this continuum, we often see that they fail to fully adjust the underlying revenue architecture – the building blocks of sales, marketing, and customer success – creating disruptions in revenue performance.
To illustrate the point in a simple example, a SaaS business that obtains strong performance and market leadership in a small business sector might decide to “shift left” to leverage its success with larger accounts to realize greater margins. Yet, the larger account segment requires a more complex team-sell-to-committee-buy process centered around an account plan. Product-market fit is more challenging in the larger account segment. Without retooling the product, positioning, marketing, sales, and customer success models, the strategy will likely fail. The Revenue Architecture methodology helps teams align the critical components of revenue operations, marketing, sales, and customer success to fit the business model, helping drive more accelerated, predictable, and sustainable revenue performance.