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HOW REVENUE MODELS GROW BUSINESSES



 All businesses are involved in value creation. Once value has been created, it is necessary to appropriate the value that has been created and thus guarantee the sustainability of the value creation process by the Business.
 Several tools are utilized by Winning Entrepreneurs, Business owners and CEOs to appropriate value.  One of such tools is the Revenue Generating Model which is also a veritable tool to grow your  business.
 What is a Revenue Generating model and how does it grow businesses?
Revenue generating models are means through which a business appropriates value that it has created from its target customers. Businesses utilize various Revenue models to capture back value from its customers. The more models available to your business, the more the chances of providing and capturing value from more satisfied customers of your business. The purpose of the revenue model of a business is to ultimately optimize the value creation and consumption process resulting in a satisfied customer and business. An effective revenue generation model ultimately ensures the sustainability of the value creation process by the business.
Since the purpose of a business according to Peter Drucker is to create and keep satisfied customers and marketing is the business function that acquires, retains and develops satisfied customers (Prof. David Skipp Smith of Lagos Business School), the revenue generating model ensures that   the value created by the business is delivered in tandem with the value aspirations of the customer. It ensures that the business has multiple ways of providing same or more services to its customers and thus multiple sources of value from the customer. The more value sources from the customer, the better for the customer and the business.
Optimizing the revenue generating model of a business is critical in today’s super-competitive business world for survival and growth and may be all that you require to improve your competitiveness. It is one tool through which a business can increase its share of the mind and ultimately of the wallet of its customers.
An effective business revenue model  achieves the following for your business:  
·         Ensures the conversion of more prospects to sales  
·         Shortens the lead generation to lead conversion loop  
·         Generates more value to the customer  
·         Appropriates more value from the customer  
·         Provides the business with more ways to  productize its intellectual properties  
·         More customers 
·         More sales!  
·         Business Growth
                  A business revenue generating model is always a work in process as Winning Entrepreneurs, Business owners and  CEOs are always up-scaling and improving their revenue generating models to improve their value delivery and appropriation processes.
                  A lot of times, businesses look for more customers to grow their businesses. In some cases, the business may not need more customers but a more robust revenue generating model to grow its business and get more profitable.
                  If your revenue generating model is faulty and not optimized to capture more value from your customer, more customers will not lead to growth. It may in fact imperil your business cash flow and profitability. What may be required for business growth and increased profitability in such situations is the optimization of your revenue generating model.
                  Is your revenue generating model serving the purpose of your business? Does it lead to sustainable growth?
                  Here are signs that you need to review your business revenue generating model: 
                  ·         Flat or dwindling sales  
                  ·         Sub-par performance relative to potential  
                  ·         Need for growth  
                  ·         High customer attrition  
                  ·         Low customer acquisition  
                  ·         Low customer retention  
                  ·         Sub-par profitability  
                  ·         High Lead generation to lead conversion lead times  
                  ·         Low client referrals
                                    Companies and whole industries have been revamped solely with a review of their revenue models and aligning them more in tandem with the value aspirations of the target customer.

                                    The Author, Dr. Kennedy Ononaeke, a business growth strategist  is the Managing Consultant /CEO of Winning Edge Consulting Limited, a healthcare consulting and training firm. For a free complimentary consultation on how to optimize your business revenue model, call him on 2348035875796 or 2348056316263 or email: [email protected].
                                    For Free Business Success Newsletter, TIPS, Go to: www.winningedge.com.ng





                                    This post first appeared on GROW YOUR BUSINESS WITH Kennedy Ononaeke, please read the originial post: here

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                                    HOW REVENUE MODELS GROW BUSINESSES

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