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Why Revenue Governance is Critical to the Future Economy

Why Revenue Governance is Critical to the Future Economy

Marshaling two seemingly-opposing forces—Revenue Collaboration & Governance—delivers an enterprise revenue process with huge impact.

In good times, revenue teams create demand, win deals, expand and renew existing business, like clockwork.

Staying afloat when the economy falters requires a different path. Every dollar, every deal, becomes critical. Not every company will survive.

But others will thrive. There’s talk of recession now, but if past studies predict the future, up to 10% of firms today could emerge even stronger once the macroeconomic environment stabilizes, according to Harvard Business Review.

Put another way, “If your company is lacking basic business fundamentals and burning cash, well, maybe you’re in for a reckoning,” notes TechCrunch. But well-run businesses will be well-positioned to excel.

Clari CEO Andy Byrne sees the key to success in what he calls Revenue Collaboration & Governance. That means aligning every revenue-critical employee to focus on the same goals, use the same vocabulary, and rely on the same real-time, precise data to meet and exceed business objectives.

“If you don’t have clear governance across the business, you don’t have a clear path to success,” Byrne says. “It’s the science that elevates the art of sales. At the same time, if you don’t foster collaboration throughout the organization, working as one towards those goals, you’ll never unleash the company’s true potential.”

This isn’t just about meeting a forecast. Successful businesses have an outsized economic impact, helping shorten a recession, employ thousands of employees, and support the type of communities we all want to live in.

“The next generation of leaders will balance the responsibility to drive incredible shareholder return with the responsibility to serve their customers, employees, and community,” according to Steve Singh, managing director of Madrona Venture Group, and former CEO of Concur and Docker.

But they can only do so with Revenue Collaboration & Governance, Byrne says.

Investing in a Revenue Platform may not be the first fix that comes to mind during tough times, but without clarity from the bottom up, executives don’t have the right data and signals to drive successful enterprise business leadership.

Clari has seen the impact of this first hand: by putting a Revenue Platform into place, Clari customers save, on average, $28 million in Revenue Leak after 2 years. They also boosted their win rates by 12%, which has translated to over $10 billion in additional revenue across some 550 customers.

The Promise of Revenue Governance & Collaboration

Businesses of all sizes have evolved over the last 20 years in part because of the availability of new data and customer signals. Now, these metrics make it possible for leaders to run their businesses much more holistically.

Revenue Governance means having control over all revenue-driving activities by being very specific about metrics, definitions, swimlanes, and processes.

Revenue Collaboration requires every revenue-critical person, process, and system to work seamlessly together to minimize Revenue Leak, build Revenue Precision, and ultimately maximize every opportunity to capture revenue.

Identifying revenue-critical team members, bringing them together, and rallying them around a common goal is imperative, but it’s not enough to reach Revenue Precision and the forecast accuracy that comes with it.

Consider the following scenarios:

With Revenue Collaboration & Governance:

Revenue Governance does not mean leadership micromanages employees or monitors every step of their process. Quite the opposite. Revenue Collaboration requires every revenue-critical person, process, and system to work seamlessly together on minimizing Revenue Leak, maximizing revenue capture, and building continued Revenue Precision.

Revenue Governance & Collaboration in the Real World

Theoretically, all of that sounds great. But what are the real-world results of Revenue Governance & Collaboration?

Imagine that a company has standards for running sales cycles, managing one-on-ones, and issuing revenue guidance, and everyone works to make those standards better. When a source of Revenue Leak is found, a process is improved, and that improvement becomes part of the new standard. That’s governance and collaboration.

And because those leaks have closed tight, imagine your sales team increasing win rates by 12% because they have better signals, better data, more visibility across teams, and more reliable playbooks. Imagine the impact that has on their quota attainment, and the company’s revenue.

This isn’t hyperbole. Within a year of implementing a Revenue Platform, Clari research demonstrates that lost deal rates drop from 15% to 9%, and drop further to 6% by year 2, saving companies an average of $28.3 million in Revenue Leak each year. Why such a dramatic improvement? Because you can’t have Revenue Governance & Collaboration without a holistic, data-driven platform that supports precise decision making at every level of the organization.

That’s the type of revenue retention and solid business practices that weather a recession. When companies have strong Revenue Governance & Collaboration, they earn the confidence of investors from equity firms to The Street. These companies rise to the top in the face of uncertainty, emerging stronger than ever to support their communities and the economy at large.

Learn how to navigate any downturn and protect your revenue with Clari’s guide.