revenue drivers


In this business era, the revenue drivers are redefined with a new element of addition which actually contributes a tremendous impact for the business.

Revenue = C x F x T x P

Revenue Defined

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 are doing to positively impact this factor:

What are you doing to keep your customers happy and loyal? You do have an ongoing customer relationship program, right? What is the level of customer satisfaction and loyalty?

What are you doing to attract new customers? You do have a sales or business development effort, right? How effective is it? What are you doing to continually working to improve your efforts?

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 lowering 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 rotten refrigerator odors.

Elements to enhance the Revenue Drivers