Revenue Management
UNDERSTAND IT
Revenue Management
⚡ Revenue management optimizes revenue growth and profitability through data-driven decision making.
It involves understanding customer behaviour, pricing strategies, and product offerings to maximize revenue across the customer lifecycle.
Revenue management has its origins in the airline industry while also widely practiced within B2B SaaS, eCommerce, telecommunications, media, entertainment, and other industries characterised by B2C subscription services.
With the right help, it is easy to get started with revenue management. It guarantees transparency of revenue growth and risk areas, and clear visibility of cause-and-effect of corrective actions .
IS THIS RIGHT FOR YOUR BUSINESS NOW?
When you need it.
⚡ All types of businesses can benefit from a strategic revenue management approach.
However, Revenue Management is particularly good at addressing these problem statements:
- Flat or declining revenue performance, and you are unsure how to improve it.
- Customers are only buying your entry-level, lowest margin products or services.
- You are losing more customers every month than what you are gaining.
- Your existing customers are spending less and less money with you.
Revenue management will give you transparency to really know what is going on in your business, and clarity on how to improve it.
how it works
Revenue Management
My 6-Step Process
01
Revenue Health Analysis
First, we’ll consider the volume and value of new customers versus churned customers to analyse the overall revenue health and identify the revenue drivers. We’ll also look at the revenue trend of your existing customer base, evaluating specific cohorts representing the best and worst of revenue and profitability.
02
Revenue Mix Analysis
Next, we’ll look at the make up your revenue in terms of specific customer segments, products or services, and distribution channels. This information is used to identify areas where you can improve your pricing, product offerings, and marketing strategies.
03
Identify Opportunities and Threats
From the analyses in Step 1 and Step 2, a pattern will evolve as to which areas represent a threat to the sustainability of your business, or, on the other hand, an opportunity to flex and gain incremental traction in another area.
04
Define and Prioritise Interventions
This step will evaluate the threats and opportunities considering overall business goals and inherent sales cycles. We’ll define detailed interventions and prioritise them according to ease of execution, potential revenue impact and strategic importance. This prioritisation will guide the final action plan.
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05
Execute with Excellence
Now is the time for the interventions to be taken to market with diligence and excellence. Each intervention should have clearly defined goals, time frames, expected outcomes and a detailed plan as to how it will be executed.
06
Implement, Track Results and Adapt
Next, we’ll track the results and adjust as needed. However, revenue management should be an ongoing process of analysing, implementing and evaluating the impact of interventions. Institutionalising this will give you clarity and control on forecasting your performance and taking your business to the next level.