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2020 State of Revenue Report: 95% of companies are leaking revenue

April 14, 2020

Despite recent advances in technology, particularly around data and analytics, 95% of companies are leaking revenue, and 82% of executives say managing revenue has grown increasingly more difficult in recent years. Those are scary thoughts, especially considering how critical revenue management is to a company’s overall success and profitability.

Recently, Model N commissioned a research study to identify the key trends impacting revenue management today. We surveyed senior executives responsible for revenue management at large companies within the high tech, semiconductor, medtech, and pharmaceutical industries. Specifically, we wanted to know how these executives were dealing with the challenges of revenue management, what they could do better, and how technology could help deliver better outcomes.

The results, detailed in our 2020 State of Revenue Report, indicate that optimizing and managing revenue is a constant struggle for executives across the board. And the impact is staggering: A remarkable 81% of executives believe their industries are losing trillions of dollars because of revenue issues such as leakage, inefficient pricing, and offering lower prices than needed.

Closing the leaks requires an understanding of what caused them
According to the executives surveyed, revenue management has grown increasingly complicated over the last five years, in part because the number of individual revenue execution moments have skyrocketed. Companies must continuously set and update pricing strategies on a global scale, generate quotes, manage varying and complicated incentives, and comply with increasing regulatory pressures. Unfortunately, something is bound to fall through the cracks – and most likely it’s hard-earned revenue:

  • 98% say their customers are exposed to conflicting pricing
  • 90% report regulatory compliance has a direct contribution to revenue loss
  • 73% agree their pricing decisions leave money on the table
  • 65% of executives are less confident in the accuracy of their revenue reports today than they were a few years ago

Executives know their revenue management practices can be improved
Virtually all (99%) of the executives can identify places where they can improve their revenue management processes. And they know doing so could substantially help their organizations. In fact 63% expect that closing all revenue leakage would impact revenues by 4% or more.

Download the 2020 State of Revenue Report to discover where these improvements can be made and how executives expect technology can help them drive better business outcomes.

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