Every now and then we look back at our articles and see some that we consider CLASSICS. They were relevant then and are relevant now. This is one of them.
There is a simple Revenue Science™ formula that assures the growth of sales and profit to the greatest state possible.
There is no magic required and no one needs to be a Mathematics Professor. The “Revenue Generation” formula is like the formula to be healthy and live to over 100 years old:
It is simple, easily understood, with a deployment discipline required that extends into the endless future.
Like “E=MC2” the Revenue Science™ formula is simple to state and share, so everyone willing to apply the required discipline can use it.
Revenue Science™, tells us that Net Profit = (Execution x Brand). This is so simple and obvious a formula it seems worthless. The money you make is dependent on the success of your Brand to drive prospects and customers to you and how well you Execute your business model to convert prospects into customers and customers into delighted repeat customers who are willing to pay for the full amount of value received.
Since it is up to Brand to find ideal buyers who are compelled to have you solve the problem you are prepared to uniquely solve as well as nurture those ideal buyers to the point they opt-in to the role of “prospects” with a high probability to become customers this function needs its own formula that when followed is predictable.
This formula is Brand = (Strategy x Alignment). Those certified in “Revenue Science™” and those who follow Revenue Science™ blogs know exactly what a Revenue Strategy is and for those who don’t it is the result of answering these 5 questions:
- What is our brand promise?
- What’s the customer “problem” that we solve that no one else solves?
- What niche/s do or will we dominate?
- Who is our ideal customer?
- Which are our key offers for dominating the niche?
These answers produce (if even if answered in a rough way) an Aligned deployment to achieve the corporate strategy’s revenue goals.
It is clear to everyone that to control Brand (the brand promise to the customer describes the experience the customer will receive 100% of the time) requires an intentional customer-focused Strategy. When there is an intentional strategic organizational Alignment it produces that intentional Brand experience promised to the customer and the market.
When there is no Revenue Strategy or there is a Revenue Strategy (regardless the quality) but there is no operational alignment the Brand will be random and chaotic (think “Cost of Chaos” as a result) with no opportunity for systemic continuous improvement.
If Net Profit = (Execution x Brand) and by using a second formula Brand = (Strategy x Alignment) we can control our Brand what does it take to control our Execution?
Revenue Science™ tell us Execution = (Structure x Leverage) so how is this operationalized? This is easier than the Brand equation. Structure is any resource committed to achieving the Revenue Strategy. Common examples are trade show investments, salespeople, CRM software, training, marketing material, customer service or support and so on.
A formula for a future post is Revenue Resources Required which starts with determining every Revenue Resources committed to achieving the Revenue Strategy and that is exactly where the Structure numbers come from. Whatever revenue and Net Profit we get today is a result of this exact formula today.
Every time we change an investment in structure we should expect a change in Net Profit. If we change the Revenue Resources Required with a change in Structure we want the Net Profit to go up, but it might go down. If it goes up that is positive Leverage and if it goes down that is negative Leverage.
When investments in Structure are requested the CRO or other leadership must ask the person requesting the investment the degree of Leverage expected from this change in Structure, the enabling process to accompany the Structure that creates the Leverage and the outcomes measured proving the Leverage (more opt-ins, more prospects from opt-ins, more qualified leads from prospects, shorter cycles of sales and delivery, etc.).
This intentional model includes intended outcomes and other metrics is the foundation for both continuous improvement and comparisons between Structure options.
Control over the growth of sales and profitable revenue is in Net Profit = (Execution x Brand) with the two supporting formulas. Applying this takes a little work and the discipline to do the work, which is easier, safer and much more profitable than not having the disciple and doing the work.
Revenue Science™ creates the greatest growth from your
Marketing, Selling, and Delivery resources deployed.
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deployment and certification.