Revenue improvement is the difference between watching your company grow and starting to consider cutbacks and layoffs. In tough economic times, forward thinking and planning for Revenue improvement will lead to greater overall success for a company at a time when the competition may be considering scaling back their business.
Revenue improvement is based on a method of increasing the number of customers that come into a given business. In traditional supply chain cost cutting efforts, a company might work to take 10% of distribution costs. The gain they will see on their balance sheet rarely will exceed 10 or 15% if the efforts are successful. A study by Mercer Management consulting revealed that companies who engage in cost cutting to increase shareholder value rarely regain market dominance over the five years following expense control initiatives. On the other hand, Revenue improvement allows companies to focus on growing the top line, or demand chain, rather than cutting bottom line expenses. The number of customers that Revenue improvement efforts can attract into a business is free from caps or ceilings. And who would turn down more customers at their door?
The type of forward thinking that results in Revenue improvement is unfortunately the exception rather than the rule. CEO's may talk a good game, however few senior management teams stick to the Revenue improvement method of investing the company's assets into a long term model of customer attraction over a short term model of expense reduction and cost control. However, so strong is the desire to satisfy shareholders and a Board of Directors that Revenue improvement falls by the wayside, even if cost cutting, or "fire fighting" efforts erode the company's overall strategy.