Revenue generation refers to all the activities a business undertakes to generate revenue — these activities include (but aren’t limited to) sales and marketing. Revenue generation is a critical goal and should be at the very top of your list.
In this article, we’ll walk you through the basics of revenue generation as shown below:
- What is revenue generation?
- Revenue generation process
- How to create a profitable revenue generation process
- How to move from revenue collection to revenue generation
What Is Revenue Generation?
A business has two types of activities: non-revenue-generating tasks and revenue-generating tasks. Revenue generation indicates the latter, specifically, activities that help create income and profitability.
As said earlier, revenue generation isn’t simply sales and marketing. It also includes operating plans, strategies, and practices that are designed for increasing revenue. This means every part of an organization can contribute to the revenue generation process.
Here are some examples of what a business often does to create revenue:
- Applying sales automation to improve sales’ productivity and free up time as well as resources for communicating more potential leads.
- Improving marketing campaigns’ performance to reduce customer acquisition costs, identify new customer segments, and increase ROI.
- Conducting market research to find out customers’ problems and develop product ideas that help solve those problems.
- Providing exceptional customer service experience to increase customer satisfaction, brand loyalty, and retention rates.
A company can have different revenue streams, depending on the industry, type of business, products, target audience, and more. As they grow and scale, they can also add new revenue sources.
Revenue Generation Process
Now that you’ve understood revenue generation meaning, you can follow these steps to build a revenue generation process:
Step 1: Determine your goal and target audience
Your revenue generation process should start with understanding what you want to achieve, what you’re selling your product or service to, and what actually helps generate revenue. By doing this, you can come up with activities that will help you achieve your target.
Step 2: Define which departments take charge of generating revenue
While everyone in your company plays a vital role in creating revenue, it’s crucial to determine who will be directly responsible for this goal.
Typically sales, marketing, and business development are three main functional areas that generate revenue for companies.
- Sales: Identifying leads and guiding prospects through sales funnels. Your sales team handles converting leads to clients and maintaining relationships with them going forward.
- Marketing: Communicating your company’s value proposition to clients, partners, internal departments, and the target market. Your marketing team takes charge of building brand awareness, developing go-to-market strategies, analyzing competitors activities, and more.
- Business development: Developing strategic relationships with potential partners that bring more business opportunities for your company.
Apart from these areas, customer service becomes increasingly crucial in revenue generation strategies. The reason is that customer service is a major contributor to customer satisfaction across channels, from phone and email to social media. When you focus on improving customer service, you can make your customers happy and strengthen their trust in doing business with you.
Step 3: Create a revenue generation plan
Once you understand where you are and where you’re headed, it’s time to outline strategies and tactics for creating and growing revenue. Read on to learn best practices that will help you do that.
How to Create a Profitable Revenue Generation Process
Here are some tips that can help you build a sure-fire revenue generation process:
1. Review your pricing strategy
Product pricing isn’t “set it and forget it.” You should constantly review your product strategy to make sure it aligns with your business status, revenue goals, and market situation.
When developing your pricing model, think about offering incentives like discounts and free shipping to encourage purchases. A good practice is to talk with your customers about what has driven them to buy from you and what motivates them to make more orders. Don’t just offer a discount without knowing if it matches your customers’ expectations.
2. Analyze your profitability regularly
Looking at your profitability can tell a lot about how you can grow your revenue. When doing that, pay attention to data like your high-paying clients, high purchase intent, and lost deals. Also, analyze what products and services are the best selling and generate the highest revenue, what is selling well but doesn’t contribute much to your sales, and more.
By leaning on data, you can have a clear picture of your revenue growth, improve sales and revenue forecast, and make more informed business decisions.
3. Prioritize high buying intent
Those having high buying intent are the ones who will be more likely to purchase your product or service — they might just need a little push to take action.
In this case, you can proactively reach out to them and offer support. Tell them you can answer their questions and give them a product demonstration, which will help remove doubt and increase buying confidence.
How to Move From Revenue Collection to Revenue Generation Process
As said above, analyzing revenue data will give you insights into sales performance, sales opportunities and risks to inform your day-to-day decision-making. That said, to turn those insights into actionable strategies, you need to adopt technology, specifically, a revenue generation tool like Revenue Grid.
For example, Revenue Grid allows you to combine digital coaching with guided selling to improve your sales operations. This strategy-tool pair helps you identify patterns that drive wins and losses and provides contextual guidance on what you should do to capitalize on the trends.
In-time coaching is also beneficial for your sales reps as it helps enhance their skills, reduce human errors, and close more deals. Top companies that lead in revenue generation always put more emphasis on sales coaching to their sellers, according to McKinsey.
See how Revenue Grid can accelerate your revenue growth.