Performance — Operational Revenue Management

Are we driving revenue growth effectively?

Executive Management must manage current revenue goals and find new, profitable revenue opportunities. This performance management approach requires cross-functional cooperation among Marketing, Sales, Product Development, and Customer Service.

Executive Management looks at these four areas for better Operational Revenue Management:

Use integrated decision areas to get the Operational Revenue Management information you need for these four performance measures.

Operational Revenue Management
Market Opportunity Value ($)
Customer Acquisition (%)
Customer Retention (%)
Realized Value ($)
Market Opportunity Value ($)
Decision areas from across departments bring market opportunity information to the fore.
  • Revenue opportunities cut across Marketing, Sales, and Product Development. Clustering decision areas associated with market opportunities allows more complete and aligned decision-making.
  • If market opportunity value tracks below an acceptable level, Executive Management may look for new market opportunities.
Select any decision area to learn more about the performance information it offers.
Customer Acquisition (%)
Decision areas from across departments deliver critical plans, metrics, and reports to meet the demands of customer acquisition.
  • Revenue management is also concerned with the effectiveness of customer acquisition strategies.
  • Management must closely scrutinize product life cycle management to see if new products deliver the projected sales results. Most companies launch new products with high optimism. Executive Management must be particularly attentive to early performance indicators. If projected sales are not delivered, you must find out why and communicate this to all levels of the organization.
  • Sales plan variance becomes an essential information sweet spot for determining the why and where of problems, allowing for a decision regarding the what.
Select any decision area to learn more about the performance information it offers.
Customer Retention (%)
Get the plans, metrics, and reports you need from decision areas across your business, to meet the demands of customer retention.
  • If your customer retention index is low, you must focus on the issues that directly affect customers.
  • Early indicators of potential problems are likely to come from inadequate on-time delivery performance and from complaints and claims. Monitoring these early indicators informs the team and helps ensure accountability from those responsible.
  • Service benchmarks also offer insights into customer service problems.
  • Despite positive numbers in these early-warning measures, the sales results decision area may indicate poor results, with decreasing sales to existing customers. The solution may be rebalancing sales tactics.
Select any decision area to learn more about the performance information it offers.
Realized Value ($)
Decisions areas supporting realized value provide an overview of the effect on profit of the effort going into driving revenue growth.
  • You must review unprofitable customers and pursue different strategies if they are important to the business.
  • A pricing review may indicate that increasing product prices for a large but unprofitable customer would be a bad decision, since this would accelerate the competition’s penetration of that market.
  • Reviewing the service cost of the service value metric could highlight too much spending on service support. In that case, you might attempt to negotiate a higher service charge to maintain existing service levels.
Select any decision area to learn more about the performance information it offers.
 
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Additional Resources:


The Performance Manager Book
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This book, Proven Strategies for Turning Information into Higher Business Performance uncovers 42 information sweet spots. Understand these areas, and you can drive performance excellence.
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Cognos Performance Manager
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See how plans, financial reports, and scorecards can help you manage performance across all data sources.
Performance Manager Book Abstract
Abstract
The Performance Manager, Proven Strategies for Turning Information into Higher Business Performance Book.
 
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