Do you have the right revenue model?

Despite the economic uncertainty, there is a clear difference between market leaders and laggards in terms of sales performance, human capital productivity, and revenue growth.

In fact, the best run organizations are outpacing rivals in financial performance as well as creating long-term assets in several key areas such as quantity of revenue sources, quality of distribution channels, global reach, and brand market share (i.e. awareness and recognition by top buyers and influencers within key industry segments and communities).

You’ve heard this one before…the sales team wants leads. business leaders want revenue growth….and when these objectives aren’t achieved at the desired, and typically unrealistic  pace, marketing takes the brunt of the blame.

Too bad too, because marketing cannot fix a revenue model. However, marketing does often take the fall; as according to numerous surveys from MarketingSherpa, AmericanMarketingAssociation, SpencerStuart, and our own middle-market research; marketing executives have the shortest tenure of any senior executives, barely two years on average and even less for many technology and outsourcing firms.

 

So, do you have the right revenue model?

Unless your company is outperforming the competition and owners are satisfied with the earnings and valuation then the answer is : “NO.”

 

If you haven’t been approached for strategic alliances, and/or acquisition in this economy, then there is a high probability you don’t have the best revenue model.

Despite the recent economic uncertainty, M&A corporate development in the USA through the first three quarters of 2011 was 41 percent higher than in the first three quarters of 2010 and already ahead of the full-year 2010 total of $796 billion.

 

Of course, depending on the maturity stage of your organization; the complexity of the revenue model builds upon itself creating predictability based on overlapping constructs (multiple players, multiple distribution channels from both direct and indirect channels, multiple verticals, a portfolio of products and solutions, and client lifecycle management).

In summation, marketing cannot fix a product, revenue model, nor a company.

Here’s a quick test we do when interviewing companies or conducting due diligence.   Is your revenue model more efficient that your direct competition as well as your potential strategic alliances and channel partners?