Do You Know the People Behind Your Revenue Goals?

When you set your revenue goals for the year, do you truly know what’s driving those numbers?

When organizations set revenue goals, they often look at broad numbers: how many tickets need to be sold, how much needs to be raised, or how many subscriptions should be renewed.

But do you know the people behind those numbers?

This is where people-based budgeting comes into play. Instead of treating revenue as a faceless number, it focuses on understanding the audience segments and the specific relationships that contribute to your financial goals.

Watch this clip below from Leading the Way, where the team explores how shifting focus from revenue to relationships can transform your approach to budgeting, audience engagement, and long-term growth.

What is People-Based Budgeting?

People-based budgeting is a strategy that focuses on the relationships (the people) that contribute towards your revenue streams and budgets, rather than just looking at revenue or unit totals. It shifts the focus from abstract financial figures to the specific people and segments driving those figures.

Rather than simply asking “How much revenue do we need?” the focus shifts to: “Who are we engaging with, and how can we deepen those relationships?”

People-based budgeting is about understanding which segments contribute to your organization’s goals and how to invest resources to engage those segments more effectively. These segments could include new buyers, loyal patrons, multi-buyers, or lapsed customers who may require re-engagement.

This strategy not only leads to a more targeted and personalized approach to budgeting, but it also helps you identify growth opportunities and areas of risk within your audience pipeline. By understanding which segments need more attention and which are already thriving, you can adjust your campaigns and budget allocations to ensure you meet your specific financial goals.

Key Elements of People-Based Budgeting:

• Audience Segmentation: Identifying key audience groups (new buyers, loyal customers, lapsed patrons, etc.) to tailor investment and marketing strategies.
• Relationship-Driven Decisions: Budget decisions are directly tied to specific audience behaviors and how these relationships contribute to revenue.
• Data-Driven Forecasting: Using data from past interactions and behaviors to predict future revenue and guide budgeting decisions.

Why People-Based Budgeting Matters

People-based budgeting is a more strategic and sustainable approach to financial planning. Here’s why it matters:

1. Improved Resource Allocation
   By knowing which audience segments are most profitable or require more attention, organizations can allocate resources more effectively. For example, if new buyers are underperforming, more budget may need to be allocated to marketing and engagement strategies to convert them into repeat customers.
   
   
2. Better Decision-Making
   People-based budgeting allows organizations to move away from arbitrary financial targets and focus on tangible relationships. Understanding the people behind the revenue makes it easier to identify areas that need more focus, such as increasing the frequency of visits from loyal patrons or re-engaging lapsed customers.
   
   
3. Predictable, Long-Term Revenue
   Rather than relying on fluctuating revenue or broad sales targets, people-based budgeting helps predict revenue more accurately by focusing on behaviors and long-term relationships. For instance, you may forecast growth based on multi-buyers who tend to return year after year, rather than solely relying on new ticket sales.
   
   

The Role of Data:

Data plays a crucial role. 

"Revenue goals are made of many parts... but what we really try to do is pivot that away to focus more on the people, on the relationships."

By digging into the data behind each audience segment, you can unpack your revenue targets and build campaigns and strategies designed to meet specific segment goals.

Watch or Listen to the Full Episode

In this episode of Leading the Way, we explore how shifting from revenue-based planning to relationship-based budgeting can transform your organization’s financial strategy. If you're ready to stop guessing and start building financial plans that are proactive, measurable, and sustainable, this conversation is for you.