Why revenue increase

Often, SaaS companies prioritize revenue growth over churn because it satisfies certain superficial requirements meeting overheads, etc. If growth appears to be flagging, the instinct is to devote more resources and analysis to replenishing that cash flow than to anything else. This, however, is faulty logic. Churn should always be your top KPI. If left unchecked, churn eats away at your revenue growth. You'll continually be playing catch-up due to the customers you're losing.

If this company managed to keep its churn down to 1. However, as the churn accumulates, the new customers are only able to cover the older customers who have already churned, eventually resulting in a growth plateau. Over time, a subscription company with lower revenue growth and a controlled churn rate will be more stable than one with high revenue growth and a high churn rate. Company A has invested more directly into revenue growth than Company B, and for the sake of argument let's say both companies are getting customers at the same rate.

Company A's revenue growth might be high, but its churn is so high that their MRR is going down. Company B started lower, with less month-on-month growth, but because their churn is absolutely under control, it doesn't take long for them to overtake Company A.

Analyzing revenue growth doesn't just mean thinking of new ways to bring money in through every existing and potential channel possible. Diligently examine your company's financial statements : observe which internal processes or aspects of your product are responsible for top line revenue growth, which aspects are causing decreases in revenue, and how your long-term outlook is shaping up.

There are a number of different roads you can go down with revenue drivers - tailor your approach based on what you have to offer. Email Marketing : Building revenue is in many ways like building an audience for your product, and email marketing is one of the surest ways to do so. Inboxes are notoriously crowded places, but there are ways of making your emails stand out.

Freemium Offerings : Offering the basic version of your product for free is an excellent way of raising awareness of its value and gaining early traction.

Giveaways : No, don't give away the whole thing. Each of these channels can have real positive effects on your income statement, but you have to strategize. Any revenue growth strategies you do implement will only be successful if you can figure out what exactly is undermining your revenue growth in the first place.

Churn: As we mentioned above, churn is the mortal enemy of healthy revenue growth. Understanding and reducing churn are fundamental to maintaining a healthy level of revenue growth. To sum up, focusing on revenue growth is beneficial because it encompasses a bit of everything and determines the overall health of your business. Using the revenue formula, determine their revenue growth rate from December to January.

The difference between the current period revenue and the previous period revenue divided by the previous period revenue. All businesses should expect to go through stages , and revenue expectations are different in each:.

In other words, it can take years to reach relatively consistent revenue growth. So, continue to monitor your revenue growth, create new strategies, and always be willing to learn so your business can thrive. Revenue generally fluctuates every month, quarter, or year, no matter where you are in your business life cycle. Instead of viewing the dips as negatives, view them as opportunities.

How can you strategize to increase your revenue growth? Keeping an eye on your revenue growth can keep everyone employed, customers and investors happy, and your business growing—even with short-term dips. This is why revenue is a strategy and not a goal. Revenue growth strategy should be proactive rather than reactive, so get started now and reevaluate whenever necessary.

Unfortunately, this focuses more on cost-cutting than growing revenue—which will likely make employees, investors, and customers nervous. Though the best overarching strategy for revenue growth is ensuring each team is working together, there are more specific strategies for increasing revenue growth. Here are three of them.

As teams are made up of people with different opinions and concerns, the first step in any revenue growth strategy is to get buy-in. Motivate your employees to buy in and do their best work by showing them you trust them no micromanaging! When your employees feel motivated—not to mention more competent thanks to the professional development—they may be more willing to listen and adjust to new methods. To expand your market and keep your current customer base engaged, find new ways to reach your clients.

Outreach methods can be part of your marketing, sales, or customer experience strategies—but ideally, the teams would work together for this. These new ways could include developing a well-written blog , maintaining an active email list, investing in social media campaigns, or using paid advertising.

As business technology has evolved over the years, many companies have found themselves piecing together technology as needed. Perhaps it started with word processing and spreadsheet software. Then came email. A basic website. An internal chat software. A more advanced website. Some social media. A customer relationship management system. You'll need to research your market to see if there is a desire for your proposed offering.

Consider using some of your existing clients as a test group. Getting feedback from a test group can help you manage some of the risks and learn how the product or service can be improved. Pay special attention to marketing and promoting your new products or services so that people know about them. Expanding into new markets can be costly, but it can increase your client base. Market research will help you understand the potential new market and help you devise a strategy.

You'll also need to consider marketing, sales, distribution, and increasing your production to meet the new demand. Evaluating and optimizing your sales channels could help you reach more clients, increase your market control, and improve profitability. For example, you could:.

You may be able to improve the efficiency of your marketing activities. Track the outcome of your current marketing or advertising and be prepared to change your strategy if you are not seeing your desired results.

Study your intended clients to know how best to reach them, and plan your marketing strategy accordingly.