Financial Literacy: Money Wheel Analysis
View more presentations from Development Corporate
Although we live in world where many product managers are heads down working with customers and engineering, it is important not to forget some of the foundational analysis that help turn a good sales organization into a selling machine through the application of carefully targeted marketing programs. Money Wheel Analysis is one such tool, and is thoroughly described in this short presentation put together by my colleague John C. Mecke at Development Corporate.
To summarize, Money Wheels are great tools to help management see where their most profitable transactions are, identify where the best repeatable sales cycles are for specific products/services and provides a framework for assessing where to invest marketing lead generation dollars and resource. If you are looking for funding, providing elements of a money wheel analysis can help shine light on the most lucrative opportunities.
Money Wheel Analysis is also very useful for Chief Revenue Officers - helps focus the sales force on the highest yielding opportunities, identifies opportunities in one region which can be replicated across others. Where it excels, however, is in identifying the lead generation requirements for a specific product or service. To see how it is worth explaining two elements of the money wheel - the spokes and the spoke lets.
- Spokes - These are the categories of repeatable transactions that occur, including sales to existing customers, net new customers, add-on deals, migration deals etc...
- Spokelets - Specific events that cause a customer to purchase your product or service - within a specific repeatable transaction e.g. purchase of your solution because the company just bought a new financial accounting package
Once you have constructed a money wheel, then you can identify how many sales transactions are needed for each spoke/spokelet, then by applying historical conversion ratios it is possible to model how many opportunities are needed at each sales stage to hit your target revenue goals.
Having had to build money wheels myself I know how difficult they are to complete without the right stats from sales, however once you have them they are easier to keep current and are a great input into the marketing budgeting and lead generation planning process - get your product managers to maintain these, sales will love you.
To learn how to create one, take a look at the presentation from Development Corporate and reimagine how to help your revenue warriors win big.
View more presentations from Development Corporate now.