An Introduction to Revenue Management Solutions
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Revenue Management Solutions: An Introduction
Revenue is the paramount concern of all business enterprises. While branding, business model, sales tactics, product offerings, and other aspects may be vital to the success of a company, revenue is what fuels it and keeps it afloat. As such, knowing how to drive revenue intelligently and reliably is a core concern in every field of business.
What it means to drive revenue, however, has been rapidly changing in recent decades. What was once the fruit of guts, experience, and acute mental faculty is now dependent upon vast arrays of data and the state-of-the-art software that crunches it.
Markets and the prospects which make them up have always been volatile. It has only been recently, though, that tools have been developed which can enable a business to keep up with these rapid shifts and complex dynamics. Data analysis software now exists which can examine and monitor the most minute aspects of both the market and businesses themselves. This knowledge can be compiled and assessed to provide companies with unprecedented levels of agility and foresight. What was once the realm of guessing and gambling is now a science.
These technologies are now being adopted by all sectors of the business world. This has revolutionized what it means for a business to be successful and what it means to be competitive. The benefits to be gleaned from this new software are growing in tandem with the risks entailed in ignoring it. To help, in this article we are going to discuss some of the basics of software-based revenue management solutions. We’ll look at how a revenue management company system might function, what kinds of revenue management tools are out there and what they can do, what the revenue management process might look like, some of the software solutions on the market, and look at some examples of how the whole operation might look together.
Revenue Management System
Revenue management systems (RMS) entail the use of software solutions to help management better drive profits for a company. Revenue management systems examples are numerous and each system will be specially tailored to fit the brand and model of the company of which it is a part. Nonetheless, we can outline a general structure which most enterprises will follow to a greater or lesser extent in using data tech to drive revenue.
Data Collection Software
Revenue management is founded upon data. The first stage in a revenue management system, thus, is to obtain that data. This can be done by manual entry, but due to the inaccuracies and slowness inherent in this method, most companies will implement automatic data cataloging and uploading.
The core of every revenue analysis system is its suite of analytic software. Once data is collected, it is fed into programs which analyze it in a variety of ways. Some programs might just build daily snapshots of data, while others use historical and contemporary data to generate forecasting to model future trends.
These data are then smoothed and presented to management. This is often done with the help of special visualization tools which use graphics and charts to make the information simple and straightforward. The more informative and easy to read the data is, the easier it is to leverage.
The information which is presented to management is then interpreted. Problem areas are identified and solutions brainstormed. Management decides what the data means and what should be done to improve it.
The initiatives formulated by management might then be approved by the c-suite and then steps will be taken to realize these projects. If they are successfully implemented, revenue figures, trends, and rates will improve.
Once new solutions are applied to target areas of a business model, new data will be generated. This can then be compiled, analyzed, visualized, and revisited by management to see whether their solutions have yielded tangible progress.
Revenue Management Tools
There are many tools for revenue management software companies and other b2b-based businesses might utilize in driving profit figures. Here are a few of the major types of programs which can be helpful in leveraging data.
A CRM is a database that contains information about clients and prospects. This includes basic things like contact info, location, and business type, but also stores data on behaviors, needs, and preferences. Knowing how clients and prospects act during the sales process is important for streamlining and optimizing your pipeline and training sales teams to improve performance.
In order to drive revenue, it is vital to understand every monetary facet of your business. As such, an effective accounting program is one of the most important revenue management tools. Knowing opex, salary, subscription, pricing, and investment data is imperative for creating the most accurate financial models and understanding what kinds of background expenses are affecting net profits.
Knowing how to drive revenue today is just the first step. Understanding future trends and shifts before they occur is key to remaining competitive and profitable in dynamic market environments. Forecasting software uses complex algorithms to generate models of what data will look like in the future. The most powerful forecasting programs have in-built AI capabilities which enable them to run autonomously and constantly revise their statistical parameters to fit new data and improve accuracy.
In revenue management, it’s important to compile as much data as possible. However, in order to make informed and effective decisions about strategies and models, this data must be consolidated and clearly presented. Visualization tools and dashboards filter out irrelevant and low-priority data and help management focus their attention on the information that really matters. They also allow for constant monitoring which ensures managers are always aware of new changes and challenges.
Revenue Management Process
The revenue management process consists of a continuous cycle of goal-setting in order to maximize profits in fluctuating markets. Though we already outlined these activities when talking about revenue management systems, it is important to understand the process by which rms improves the way a company runs.
As soon as a revenue management team knows the current fiscal state of a company, it can begin setting goals to improve. They might set quantitative goals involving meeting a certain figure by a certain date, or they could make qualitative goals like decreasing opex or increasing sales.
Collecting and Compiling Data
Data will then be sourced from one or several relevant departments of your business. It will be compiled and smoothed and, finally, presented through visualization software back to management.
Analysis and Planning
Management will then look at this data and begin to identify opportunities for change which can be targeted to advance the company as a whole towards their established goals. They will also determine how best to institute these changes.
Implementation and Monitoring
Revenue management will work with the relevant departments to implement new practices and tactics. It will then monitor the data and look for signs that these solutions have succeeded. If they haven’t, new strategies will be formulated. If they have, management will begin thinking about new goals, and the cycle will begin again.
Revenue Management Software
We’ve discussed the different kinds of revenue management software necessary to efficiently leverage data and drive profits. But how are these tools presented and which providers offer the best solutions?
RMS software is usually offered in suites which cover all the fundamental aspects of collecting, analyzing, forecasting, and presenting data. While these bundles are powerful and are built to supercharge almost any type of business, it is important to keep in mind the special needs of your own company and make educated decisions about what you really need.
Domo offers a number of data programs for tracking financial data and provides industry-leading solutions for software integration. This can be especially helpful for companies which already utilize analytics software but want to streamline their process and optimize their workflow.
Salesforce is known for their state-of-the-art software gallery and offers comprehensive solutions for just about every problem and opportunity which can affect a business. They also offer coaching to help with improvements when it comes to personnel.
For a truly powerful suite which can revolutionize the way your business drives revenue, however, the answer is Canopy. Canopy offers a wide range of data tools to help with KPI monitoring, forecasting, marketing intelligence, and pipeline analysis. Their augmented revenue analysis engine uses machine learning tech to generate unprecedented insight into the fiscal dynamics of a company and is an invaluable resource for any team or initiative focusing on revenue.
Revenue Management Examples
To wrap up, let’s look at a couple hypothetical revenue management examples to demonstrate the benefits rms can bestow on your business.
A company realizes the operational expenses incurred for each sale it makes are quite high and that this is eating into profits. Analysis of the sales pipeline indicates that cycles are quite long, leaving sales reps with extra time usually spent completing low-priority tasks. Management considers downsizing and redistributing clients among fewer team members, but elects instead to launch new ad campaigns and explore new markets to increase the total number of clients and offset wage costs by expanding its prospect base.
A company specializing in saas notices that its software packages are not selling as well in some regions as they are in others despite uniform demand. CRM data on clients in high and low-performing regions is analyzed, and it is discovered that the latter is populated by smaller companies with lower profit margins. Management drives an initiative to improve segmentation models and adjust pricing depending on business size and revenue. This drives sales by making their software packages affordable in all regions.
These are just glimpses of the benefits to be incurred by investing in RMS. To find out more about what you can do to drive revenue and supercharge your business model, visit our website and explore Canopy’s range of cutting-edge software solutions.