Too many business owners think one dimensional when it comes to revenue production. Their focus and their goal is 'increase revenues'. And while this can serve a specific purpose, this approach can also limit how you think about revenue – and ultimately, have you reduce your ability to exceed revenue goals.
The three pillars of revenue generation include:
1. Increase new customers
2. Increase the transaction amount
3. Increase the transaction frequency
When you think about these three pillars of revenue generation, you start asking more specific questions about your marketing and sales plans. You also expand the possibilities of when each of these strategies is most effective.
For instance, as a start up, your ONLY focus should be on Pillar #1: Increasing new customers. Worrying about increasing prices will come later once those new clients are recurring clients. And obviously, focusing on increasing the transaction frequency isn't the best use of a start up company's resources.
As your company moves from start up to more growth, depending upon your size, you will want to refocus your marketing and sales efforts to the other two pillars, Increasing the Transaction Amount and Increasing the Transaction Frequency.
All three pillars are important and setting up your strategic plan to utilize and focus on all three should be every CEOs goal. As with other aspects of growing a successful business, it's all about focusing on the right things at the right time!
To give yourself a quick overview of how you might view your focus on these three pillars of revenue generation, take this quick quiz.
As you read each statement, give yourself a rating. Do you:
4 = Strongly Agree
3 = Agree
2 = Disagree
1 = Strongly Disagree
Your answer will reveal to you where you might want to put more resources or realign those resources.
Increase New Customers
1. You target your marketing efforts by having an extraordinarily clear understanding of your company's ideal customer profile.
2. Your company's marketing and sales activities effectively stand out from the competition through the use of a highly differentiated and value-rich messaging about your products and services.
3. Your company has an extremely effective method of gathering information from your sales prospect about their real needs prior to presenting your products and services during the sales process.
Increase the Transaction Frequency
1. Your company's customers clearly understand the full range of your products pricing.
2. Your company insists on disciplined and clear 'after the sale' follow through communication with the customer.
3. Your company is particularly successful at communicating to the customer what it is best at delivering.
Increase the Transaction Amount
1. You have effectively repackaged some portion of your product and service line in the last year in order to better emphasize or reposition your products or services value in the customer's mind.
2. Your company is adept at offering combinations of your products and services that provide particularly attractive value pricing.
3. Your company is very successful at communicating the good, better, best alternatives during the sales presentation.
How are you doing? Old hat? Or new? Use to do it but stopped? Are any of these worth talking about among your staff?
I find that while the concepts aren't necessarily new, too often we lump all our sales approaches under one roof: increase revenues!
By understanding these three Pillars of Revenue Generation, your organization can understand that it isn't always just about adding new customers.
By the way, anything LESS than Strongly Agree means you have some work to do!
Laurie Taylor, a business growth specialist, and president of FlashPoint! focuses on helping business owners, with fewer than 500 employees, uncover the 'hidden agents' that are creating obstacles to their growth. Using her own experience of taking a company to over $12M in sales, and a model called the 7 Stages of Growth, Laurie effectively helps business owners 'stay ahead of their growth curve'. She has spoken to Forum groups across the U.S. and Canada on topics that improve productivity, performance and profitiability. You can reach Laurie at laurie@igniteyourbiz.com and visit her websites at www.igniteyourbiz.com and www.growthcurvespecialists.com. Follow her blog at www.igniteyourbiz.com/blog
Email Address: laurie@igniteyourbiz.com
Web Site: http://www.igniteyourbiz.com
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