If this is the case, figure out how you can upsell to them once again and create plans that generate more revenue and prove their worth in value. Essentially, you want your customer lifetime revenue to be staying steady or preferably on the rise as a key performance indicator to successful revenue management.
Expanding RGM across the organization can help translate pockets of excellence into a truly global capability, potentially including rolling out strategic RGM or precision RGM. Developing this organization-wide capability is dependent on broad capability building, achieved through “belt”-like training and certification across RGM practitioners and the broader marketing and sales organization. This requires effective central coordination, often through a global “center of excellence” (CoE).
Product or service value analysis
Because order management is based on the order information found inside contracts, the process is smooth and seamless when integrated with a contract lifecycle management (CLM) tool. Historically, order management has been managed in an enterprise resource planning (ERP) tool. Today it is migrating over to management within a CRM system or in a dedicated order management tool because of the importance of catching on-the-fly order changes and the need to tie into front-end tools like CLM. Revenue churn rate goes hand-in-hand with CCR unless you have flexible, monthly pricing plans.
Simultaneously, contractual information about the billing schedule is sent to accounting. Products are generally invoiced upon shipment or installation, but services may get billed upon finishing the job, completing a certain percent of the work, or hitting certain milestones. If you sell software subscriptions, these may be invoiced based on the number of users or usage data, like number of minutes used or processed transactions. Again, if a customer has multiple orders or changes, invoices must be coordinated so customers aren’t receiving dozens of invoices a week. A value analysis of a company’s product or service offering puts it in context among competitors by comparing its features and reviews against those of the competition.
The bones of keeping any customer around come down to the quality, consistency, and usability of your product. Your product team should be working closely with other departments and running various tests of their own to identify ways to optimize your current product and build features people need. Partha Chakraborty is a venture capitalist turned entrepreneur with 17 years of experience. He is the founder of Tactyqal.com, a startup that guides other startup founders to find success. He loves to brainstorm new business ideas, and talk about growth hacking, and venture capital. In his spare time, he mentors young entrepreneurs to build successful startups. The aim is to maximize circulation and advertising revenue based on market demand.
Maximize Revenue from Existing Inventory
It’s advisable to develop a disciplined pricing strategy that anticipates the value a product or service creates for customers and sets targeted prices to capture it. Of course, you may decide to price against the competition, but the greatest value comes from prices that closely follow prevailing market conditions and demand. This allows you to optimize prices for different segments and minimize price changes to generate customer loyalty when done correctly. Once you understand your churn rate, you can start optimizing customer retention metrics. Plus, selling to a current customer is 60–70% more likely to be a success, as opposed to 5%–20% success rates with new customers.
Many businesses try to sell higher-priced versions of the products in which customers have initially expressed an interest. This is quite common in car dealerships, where the sales staff routinely tries to draw the attention of customers to more expensive models. Similarly, a hotel might offer its customers an upgrade to a suite from its standard room. Up-selling can result in substantial increases in profits, especially when the products to which customers are being directed have a higher profit margin than what they were originally interested in buying. With a complete quote-to-cash solution on one platform, you can track contract details from contract signing to order fulfillment all while maintaining an accurate record of the value the company has earned from the deal.
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