By: Jonás Spellman
In these last 15 months, in which the world has lived through a pandemic, the majority of organizational improvement or transformation projects have been biased towards cost and expense control. However, the increase in sales is particularly important when the transformation takes place in the midst of an economic downturn or an industry-specific crisis. Our experience shows us that companies with strong revenue streams are better positioned to respond to the risks associated with any transformation and the urgency created by disruptive events. Therefore, the use of tools and initiatives aimed at revenue growth can greatly increase the chances that the organizational project will achieve its financial objectives and generate a strong and lasting impact.
At SYNERGOS we have worked with companies from various industries that have used sales enhancement tools to improve their growth trajectories during the first year of a transformation, and even during a crisis. The key to their success was knowing which tools to use and how to implement them for maximum impact. While our focus in this article is on organic revenue growth for B2B and B2C companies through pre-planned purchases by consumers, these same tools we describe can also be applied to companies that offer retail products or services. impulse.
We have found the following six tools to be the most effective in driving rapid and sustainable impact on the P&L of companies across a wide range of industries. Implementing these tools can help maximize revenue earned and realized by, for example, expanding the number of customers, increasing the average ticket, increasing the frequency of sales, increasing recurring or subscription-based sales, improving unit margin per sale. , optimizing pricing, accelerating the sales process and preventing customer churn.
Six powerful tools to increase sales.-
a) Strengthening the sales force: The effectiveness of the sales force can be improved, for example, by increasing inbound marketing, improving account planning and sales funnel management, and optimizing incentive schemes.
b) Channel optimization: The efficiency of the sales coverage model can be increased by expanding the size and capabilities of the sales management or planning area to target underserved or underserved customer segments, clarifying the roles and types of vendors (hunters versus farmers, for example) or partnering with third parties to increase penetration in markets with limited commercial presence.
c) Pricing optimization: the sales process can be accelerated and more value captured through standardized pricing and rigorous pricing discipline, for example by automating pricing rules and incorporating them into revenue management systems, and implementing regular price adjustments contractual.
d) Review and improvement of contracts: contractual agreements can be standardized and their profitability improved through, for example, the introduction of big data tools and process improvements to simplify and speed up decision-making in their reviews and negotiations, and honest service agreements with actual delivery capabilities to avoid incurring penalties.
e) Specific sales programs: Sales of strategic products or services, or sales to specific customer segments, can be increased by bundling components of existing offers to meet the needs of target customers, converting one-time sales to signups, or improving the effectiveness of specific promotions and loyalty programs.
f) Revenue Retention: Revenue leakage can be identified and stopped by applying automation and machine learning tools to quickly find revenue that is disappearing (using a Product-Customer matrix), and fix systemic billing issues when revenue is lost.
These six levers outlined begin to make an impact approximately three to six months after their launch.
Increasing revenue during a transformation can be quite challenging. Because the various stages of the revenue life cycle are interconnected, applying a tool at one point in the cycle can affect other points. However, in most transformations, companies focus on only a few parts of the cycle. Taken together, these six revenue tools address the interconnected stages of the cycle and allow companies to address the interdependencies between them.
How to implement these tools.-
To ensure maximum P&L impact during and after a transformation, we suggest following this simple three-phase sequence:
- Phase 1 – Rapid Assessment: Identification, assessment, and prioritization of revenue tools, taking into account projected impact and speed of implementation.
- Phase 2 – Quick wins: design and execution of pilot plans to test the effectiveness of the tools, demonstrating a tangible impact on the P&L, evaluating the lessons learned from the pilots and iterating solutions to maximize value capture.
- Phase 3 – Roll out: application of the tools that have proven to be more effective to new geographies, clients, segments or products.
Ultimately, the key to successfully driving rapid and sustainable revenue growth through this approach is capability development. At SYNERGOS, we think of capabilities in terms of four components that we help clients implement: processes, human competencies, technology, and governance model. We have concluded that strengthening the capabilities of these four components is essential to achieve a strong and sustainable impact on the income of an organization.
Sources:
- How to Grow Revenue Quickly and Sustainably in Transformations (BCG, August 2020)
- How precision revenue growth management transforms CPG promotions (McKinsey, July 2021)
- Managing revenue growth management in consumer products – Unexplored areas of opportunity (Deloitte, May 2019)
- SYNERGOS own cases