Welcome to the first of a three-part series on maximizing revenue moments where we’ll unpack a new strategic approach to growing your top line, the new class of Revenue Execution Software Platform you’ll need to do it, and, lastly, how this approach helps you ensure regulatory compliance.
It is harder than ever to know and grow your true top line, and still as important as ever. While growing top line revenue is critical for every business, the digital era has obscured and exponentially increased the complexity of managing your true top line. Capturing hidden revenue and eliminating revenue leakage to maximize your top line are a strategic imperative.
In the digital era, the business landscape has changed. Speed is the new currency. There are infinite variations of price, configuration, and contracts. And your customers are bringing their high expectations from their consumer lives to work in what we call the “Amazon effect.” The fact is most companies are ill-prepared to execute revenue in the face of these new B2B market realities.
In short, digitization is compounding the complexity of maximizing your true top line. The days of multiplying list price times volume to get your top line revenue are over. You have multiple pricing variables at play—markets, regions, channels, products, and a mix of business models—and infinite end-customer price points. Plus incentives, rebates and chargebacks that are managed across siloed systems. At the same time, demand for pricing transparency is at an all-time high from customers and regulators.
The harsh truth is we are in a growing revenue execution crisis where companies are uncertain about the accuracy and integrity of their top line revenue. Money is left on the table in 30% of pricing decisions, and companies accidentally overpay incentives to the tune of 1% to 2% of total revenue. The overall cost of poor revenue execution is astounding; McKinsey estimates revenue leakage worldwide at over $1 trillion. To put that figure in perspective, it’s enough to buy each and every one of San Francisco’s close to one million residents a $1 million apartment.
The question becomes: how do you maximize revenue at speed and scale across billions of revenue execution moments every day?
After managing more than $500 billion of revenue last year for the world’s most demanding growth companies, we have a strong viewpoint about what it takes to grow the top of line of your business in the wake of digital disruption.
Winning companies are operating by a different set of rules to know and grow their true top line. They’ve recognized that traditional approaches to revenue execution will not work. Top-line growth requires a systematic, rigorous way to maximize revenue at every moment. You would not run any other part of your business without precision, accuracy and certainty. You wouldn’t manage your financial data without an ERP system, or your customer data without a CRM. Revenue execution is no different—you need a commercial system of record to maximize your true top line.
That’s what customers get with Model N. This new class of Revenue Execution Software is an end-to-end platform enabling you to maximize every revenue moment, scale to infinite possibilities, and change at speed. Customers gain certainty and visibility that result in demonstrable top-line growth. One customer in the life sciences industry identified $400K recoverable revenue leakage on their first day using Model N, while another avoided $125 million over three years from Medicaid claims processing, and a high tech company eliminated $2 million in overpayments.
Between false revenue due to exposure, liability or risk of commercial and government penalties, and unrealized revenue from leaking revenue or leaving money on the table, your true top line can be difficult to pinpoint. But it doesn’t have to be. Learn more about knowing and growing your true top line with Model N.
In my next post, I’ll dive into Revenue Execution in more detail. Stay tuned.