In the December 2009 Newsletter
Personal Message for You / Ways to Increase Revenue / Events / News
Here is my personal wish for you. May you experience the magic of the holidays. Slow down, appreciate your blessings, and recharge your passion. Then, believe and take action to make 2010 all that you desire.
Theresa and the team at Technology and Management Solutions
Increase Your Top Line: Bill Howe's Four Drivers of Revenue
What is the most common challenge companies encounter these days? Many CEOs tell me their biggest pain point this year is weak revenues. Due to many factors, sales are down. The top line is suffering and as a result, CEOs and executive teams are struggling to cut costs and maintain profitability. Why not increase the top line revenues instead? It's easier said than done, however.
HOW DO YOU INCREASE REVENUES?
Good question. The answer comes from understanding the four fundamental drivers of revenue. Bill Howe, CEO of the Growth Engine Group shared the following insightful formula with me and other Gazelles business coaches at the Growth Summit in Dallas.
Revenue (R) = C x F x T x P
Pause, all you experienced business people. Do you know this formula? Given that revenue is the engine that grows companies, you should. If you don't, a business coach like Bill Howe can help you leverage these factors.
The "C" stands for number of customers. Customers are the most important people in driving your business. Without them, your revenue comes to a grinding halt. Ask yourself some questions on what you're doing to positively impact this factor.
The "T" stands for average transaction size. The larger the quantity a customer buys, the higher your revenues. What are you doing to stimulate larger order sizes?
The "P" stands for price of your products or services. Often firms believe that in challenging times, the only alternative is to lower price. Yet if you increase the perceived value of what customers are receiving in exchange for the price they pay, you can maintain and may even be able to increase price.
The "F" stands for frequency of purchase. What can you do to encourage customers to buy more often? For example, find a powerful new application of your product or service to accelerate the use-up rate. The most famous example here is the break-out success that Arm and Hammer achieved by touting their baking soda as the best way to absorb refrigerator odors.
PRACTICAL POINTER: YOUR STRATEGY TO INCREASE REVENUES
What are you doing to leverage all of these revenue drivers? This is the perfect time to review your strategic plans, conduct a brainstorming session, and get creative in how to impact these variables. Some parting advice: Most executives think they know how to facilitate brainstorming sessions or lead a discussion on the little-known inner workings of marketing and sales. In working with dozens and dozens of teams across many industries for decades, I have found this to be the rare exception. Seek expert help. It will pay for itself over and over again in higher revenues.
Upcoming Public Events
Friday, January 15, 2010. Join Theresa at the Institute of Management Consultants meeting on "Ethics and Values-Based Leadership as Keys to Business Success." It will feature nationally renowned ethics expert, Dr. Kevin O'Brien. Denver Athletic Club, 7:00 - 9:00 AM MST. Register at www.imcusa.org.
Good News and Practical Information for You
Follow me on Twitter @TheresaSzczurek.
Leverage Social Media for the Recovery. When will things be back to normal? This economy may be the new normal! Check out my latest blog posts to learn the four ways that social media can help: Learn, Find the Next Big Thing, Tune into the Back Channel, and Augment Market Research.
Do you think Theresa has persistence and tenacity? As a Gazelles business coach, she won the Never Ever Give Up core values Award from Gazelles International at the recent Fortune Small Business Growth Summit in Dallas.
Believe and Act!
Theresa M. Szczurek, Ph.D.
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CEO, Entrepreneur, Consultant & Business Coach, Speaker & Author
Technology and Management Solutions, LLC