Using the Power of Algebra to Influence “Revenue Generation”
The science of “Revenue Generation” has uncovered a formula for CEOs and CROs (Chief Revenue Officers) to use to successfully manage the growth of profitable revenue.
This formula has 5 variables that determine the revenue outcome. The 5 variables aren’t optional the only question is how are they managed – intentionally or unintentionally? If you influence the variables then you have control over the revenue outcomes, which is how to exercise control over the growth and profitability of the business.
The CEO’s Formula:
Alignment (Revenue Strategy + Execution) x (Leverage x Structure)
Variable 1 – Revenue Strategy
Everyone understands that winning The Revenue Game is about success in the market. Revenue leaders need clarity about what needs to be accomplished and the value accomplishing that brings to the market. Telling that story to the leadership team and customers is critical. The Revenue Strategy variable and the clarity it creates is a key way to assist in the execution of the dream as opposed to no clarity where each situation is treated as one of a kind.
The quality of the strategy determines the maximum value of the offer, what can be charged and ultimately the profitably of the offer and the business. If the strategy has no value on its face the seller can’t ask a lot of money for it from the buyer and the seller will receive even less.
Intentionally developing value and clarity make the engagement safer for the customer and more profitable for both the buyer and the seller. To have a strategy that safely delivers high value requires answering these 5 questions:
- What is the brand promise (the experience the customer, partners and staff can count on every time)?
- What’s the customer “problem” that that is solved that no one else solves?
- What niches are dominated or will be dominated in the near term?
- How is the ideal customer defined?
- What are the key offer(s) to dominate the niche?
When these 5 questions are successfully answered there is a framework to link the next variable in the formula which we will discuss next week in the second part of this 3 part series.
i had been so interested in your publications, the revenue game. i am a government employee and happened to be designated as the local economic investment promotion officer, i would ask ideas, theories or concept that will help me in to assist in the formultion of policies to enhance the revenue collection of our city. thank you. sarah.