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The goal of marketing and sales is revenue growth.
It is important to know the fundamentals
behind revenue growth and how to go about it.
Revenue growth conditions
Revenues can only grow when the following 3
conditions are met:
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Customers need and
want this type of products or services and are
capable of paying for it.
-
Customers know that
you offer this type of product or service.
-
Customers want more
of your company's products versus your competitor's.
Revenue improvement schedule
There are many methods to improve revenues. However,
growing revenues at any cost usually does not make any sense
from a business perspective. To improve revenues most cost-effectively,
growth strategies need to be implemented in the given order:
-
To warrant your
company's presence in a certain market, this
market must be big enough and growing: Step 1 is
always necessary. If Step 1 shows that the market is too
small or decreasing, a company might directly jump to Step 5.
-
Increase revenues
from existing customers through customer satisfaction
and loyalty efforts and marketing communications: If
Step 1 shows good enough market conditions, a company
needs to look at customer satisfaction and loyalty to
prevent customer defections. Loyalty gaps need to be
filled. It then can increase sales from existing
customers.
-
Increase revenues
from non users through marketing communications, product
repositioning, and increased sales efforts: Market
penetration efforts increase sales from non-users. These
market penetration efforts only make sense if the
company can guarantee high levels of customer
satisfaction and loyalty. If market penetration is high,
the action of choice is step 4.
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Convert your
competitor's customers into your customers through competitive
actions: Acquiring customers from competitors is
based on addressing each competitor's loyalty gaps.
-
Develop new
markets: Developing new markets becomes the action
of choice if market penetration is high and Step 4 does
not improve revenues.
The costs associated with each step increase
from Step 1 to 5.
Revenue Improvement Action Plan
The Revenue Improvement Action Plan from Steiner
Marketing addresses the three revenue growth conditions and
follows the revenue improvement schedule.
The Revenue Improvement Action Plan first
assesses the situation and determines critical factors, then develops a strategy and improvement plan and
may help implementing it.
Get Your Questions Answered
If you have any questions about increasing revenues, give us a call or
send us an email.
We will be happy to answer your questions.
Other Marketing Strategies from Steiner Marketing
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