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Sales Consulting & Increased Profits

Customers Are at the Core of Profitability

How to create a customer-centric approach to executing your revenue strategy

Since the introduction of CRM and ERP systems over a decade ago, revenue strategies have become increasingly elaborate. As companies strive to motivate their customers to increase purchases, they have adopted a broad array of pricing strategies, including discounts, price tiers, product bundling, and life cycle-based prices, as well as a wide range of incentives built from revenue calculations like promotions and rebates.

Companies using these strategies to maximize revenue are beginning to realize that their success has created a new challenge. The complexity of these strategies and the purchasing growth they have driven have strained the organization's ability to determine pricing, negotiate beneficial customer agreements, calculate incentive terms, and track customer compliance with agreed upon terms. Spreadsheets, offline databases, and homegrown point solutions no longer suffice to help sales operations and finance groups ensure that customers are paying the right price and receiving the right incentives. Companies are finding that they can no longer verify and enforce adherence to their own revenue strategy. This inability to track and ensure customer compliance with contract terms creates a real risk of leaving significant revenue on the table.

It is important to note that customer-centric approaches to revenue strategies assume ongoing customer relationships. Customer-centric companies offer better terms to customers in exchange for ongoing buying commitments and higher purchasing levels. Since customer relationships drive revenue strategy, should a company turn to its CRM system to execute its revenue strategy when it has outgrown spreadsheets and offline databases?

CRM systems, designed to capture, store, and manage customer information, evolved from two sources: sales force automation and call center solutions. The systems that originated in sales force automation focused on the sales process--on knowing what it takes to advance an opportunity through the sales funnel. The systems that began as customer call-center solutions focused on products or services purchased--on tracking the people with whom the company interacts and the nature of these interactions.

While CRM suites have broadened significantly from their roots as point solutions for sales and service organizations, they remain incapable of executing the financial terms of a customer agreement. The automation and successful execution of a company's revenue strategy clearly requires a different focus.

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