Quick wins are crucial to any growth strategy. They build momentum and fund investment for longer-term growth initiatives. Cost cutting, acquisition and restructuring are important tools in improving short-term gains, but they often distract organizations from building revenue organically.
Immediate, customer-driven revenue gains are often overlooked in the search for quick wins. When combined with prudent cost reduction they yield tangible results and keep employees focused on the customer. They also build the marketing, sales and innovation competencies needed to grow even faster in the future. At Prophet, we’ve developed a checklist of ten rapid revenue drivers based on the repeated achievements of successful growth organizations.
1. Sell more to your best customers
It’s easy to believe your biggest customers are also your best customers. But usually it’s a myth. A rapid analysis of profit contribution, cost-to-serve and growth potential can highlight key customers worthy of an intense, cross-company focus. We’ve repeatedly seen that type of full-court press on just 10 to 20 percent of the customer base (the best customers) boost bottom line profit by 5 percent or more.
2. Exploit the first 90 days
The early days of a new relationship are critical, and yet one of the most overlooked parts of the customer experience. Clients across categories consistently express the greatest willingness to buy more and to try different products just after they come on board. Why not take advantage of that honeymoon period, offering more products, services and accessories? There’s a long-term benefit as well. Our studies on behalf of clients have found that on average, customers who make a second purchase within 90 days of the first purchase are more than double the lifetime value of the average customer.
3. Put more feet on the street
For immediate impact, adding or beefing up the sales team is one of the most effective growth drivers ever. This is especially true in industries with multiple sales channels. We’ve seen it work for a national insurance company, which got immediate results by resisting the urge to cut costs and instead adding sellers to its highest-growth market. And we have also found a consistent pattern of profitable revenue gains from targeted sales-strengthening moves in Fortune 500 companies. Many didn’t even increase headcount, but rather redeployed existing resources, using better training and better processes. Redeploying resources generates an almost instant payback versus the typical six to 12 month payback from new sales hires.
4. Double down on an upcoming launch
Too many line extensions and not enough blockbusters scheduled for launch next year? Prioritizing the most important introductions and focusing on execution is one of the simplest ways to boost revenue. It won’t create best sellers, but it avoids having a plethora of small launches dilute impact among customers. It doesn’t happen as often as it should because it takes day-to-day diligence and a willingness of functional teams to work together. But when leaders focus on cross functional priorities, time-to-market improves an average of 20 to 30 percent, mostly from avoiding the delays that build up in over-extended organizations. These gains require little to no incremental investment.
5. Raise prices
While across the board price increases may be inadvisable in competitive markets, there are usually groups of customers or clusters of products that can withstand a price increase without slackening demand. Our clients have repeatedly identified 20 percent of their lines with lower elasticity due to a different competitive set or different buyer profiles. Selective price increases are one of the fastest and lowest risk moves a company can take because almost all the benefits flow to the bottom line and the investment in analysis takes only a few weeks.
6. Redeploy to measurable media
Insufficient data is no excuse for not being able to assess the impact of media investments or failing to conduct marketing mix analysis. If media isn’t measurable, shift the mix to media that is. If it is measurable, dig in and start optimizing. We have found that companies who have shifted marketing dollars to digital mediums have been able to quickly launch, test and learn new value propositions and pricing, which can add 10 to 15 percent incremental revenue.
7. Put a one-year moratorium on organizational changes
Nothing distracts leaders and employees more than preparing for, executing and adapting to organizational change. Even though organization restructuring is often intended to improve working efficiency, it creates upheaval and usually takes far longer to pay off. The cross-functional dependencies required to innovate, sell and market are easily disrupted—why rock the boat now, when you need to focus on growth? Instead, concentrate on encouraging and supporting the work of informal multi-functional teams.
8. Refresh best-selling products
When times are tough, supply chain leaders want the sales force to focus on over-inventoried products. Finance frets about margins. And product engineering looks to the newest thing – even if it doesn’t have a benefit. Don’t indulge. Take your best-selling products and focus on selling more of them. Crayola increased crayon sales 50 percent in a single year by renaming a few colors. Samsung boosted washing machines sales 15 percent, simply by making them in bright reds and blues. Find ways to refresh the products through color, materials and packaging. Explore new marketing avenues through brighter merchandising, sharper messaging and more inspired promotions.
9. Rework the sales pitch
It’s usually just a few highly-skilled members of the sales team who produce the bulk of incremental sales. Use their experience and customer understanding to rework the pitch for the rest of the team. A sharper pitch, particularly when it shifts focus to customer issues and delivering solutions, can have an immediate payoff. Avery Dennison generated remarkable results by doing just this for their reflective materials division. A single pair of salesmen sold five times the average. It turned out they talked about the advantages of the product in a totally different way than their colleagues. The revelation changed the way everyone else went to market and transformed the marketing message.
10. Go faster
It is amazing what people can do if they have a concrete goal to speed up a launch or introduce an important initiative. Detailed process redesign may be crucial to long term speed-to-market improvements. But in the short term, there is no substitute for asking teams to go faster, celebrating their success and rewarding them for the additional effort. The secret sauce? Growth leaders at these companies take the time to find and unclog administrative and process bottlenecks their teams are facing.
Of course, none of these quick organic revenue drivers diminish the need for long-term planning and innovation. Beyond the power to profitably boost revenue in the short term, these customer-driven wins also provide key insights into your customers and their motivation. This customer focus will help sharpen your strategy every step of the way.