Revenue generation is the backbone of every business — without revenue, companies can’t operate, let alone grow.
But today’s rapid pace of business and crowded markets require more than just straightforward sales to earn competitive revenue. Business leadership teams have to implement full-scale revenue generation strategies that encompass multiple streams in order to be financially healthy and able to navigate ebbs and flows in demand.
Read on to explore what a revenue generation strategy entails, plus 5 methods for diversifying your revenue streams right now.
- Revenue generation encompasses go-to-market strategies, marketing and sales approaches, and customer loyalty and retention efforts.
- Buyer incentives and rewards programs motivate purchase action by offering discounts, free products, or other perks valuable to the target audience.
- Companies earn significant revenue from cross-selling and upselling to current customers.
- Revenue generation is most reliable when revenue streams are numerous and diverse.
What do we mean by revenue generation?
Revenue generation is the overarching, end-to-end process of strategically managing revenue for your business. It encompasses go-to-market strategies, marketing and sales approaches, and customer loyalty and retention efforts.
It requires finance and business leadership teams to think innovatively about how they can earn revenue reliably and maximize the potential of the revenue streams they have in place. More than ever, it now also involves the use of predictive data analytics to understand not only how a company is performing currently, but how it will perform in the future.
Ultimately, the goal of revenue generation is to put effective, consistent, and reliable revenue streams in place for a business to drive ongoing growth. In most cases, this means one primary income stream — direct sales — supplemented by additional streams established over time.
Let’s explore 5 revenue generation methods every business should consider to diversify income and create more resilient growth trajectories.
5 Effective Strategies for Revenue Generation
Sometimes, even potential buyers who love your brand need an extra boost to actually make a purchase. Incentives can be the way to do it. By definition, a buyer incentive is anything that motivates a buyer to take timely action to make a purchase. The most common incentive is the discount, which offers a lower purchase price during a particular time period.
But you can get creative with incentives, too — things like membership perks (especially for SaaS and other subscription-based businesses), freebies offered alongside a purchase, or special deals for additional purchases in the future can all be motivators for buyers to make a purchase.
The key to successful incentives is compelling messaging. More specifically, you need to create a sense of urgency around the incentive deal so buyers don’t put it aside for later.
Brand collaborations happen when two brands work together on a joint offering or marketing initiative. In both cases, they have powerful revenue-generating benefits such as cross-promotion opportunities and audience expansion.
Even better, consumers like when brands collaborate — 71% say that they enjoy when multiple brands come together to offer a unique product.
Most brand collaborations happen when someone has an idea and reaches out directly. If you think this kind of partnership could be right for your business, start by making a list of companies you’d want to work with, brainstorm potential ideas, and reach out to see if they’re interested!
Referrals are a huge source of income, particularly in the B2B space. Nearly 90% of B2B buyers seek out referrals before they make a purchase, and 75% say that referrals are a key influencer in their purchase decisions.
Of course, the happier your current customers are, the more likely they’ll be to refer your business to others. But you don’t have to leave that up to chance. A formal referral program is a winning revenue generation strategy for many businesses across industries.
You can easily put one in place by offering an incentive for current customers to make referrals (similar to buyer incentives we covered earlier, this can be a discount or additional perk), and put a reliable process in place for tracking them as they come in (for example, a “Referred By:” field on a lead-gen form).
Cross-Selling and Upselling
There’s no more engaged audience than your current customers. Often, when they are happy with their experience with your company, they’ll be willing to buy additional products and services from you when they can add value for them.
There are two main ways to do this for revenue generation — upselling, which increases the value of the customer’s current purchase, (ex: a subscription upgrade) or cross-selling, which is selling additional products in addition to those already purchased (ex: updating a blog marketing services contract to also include a targeted ads campaign).
Companies today are generating a significant portion of their revenue through cross-selling and upselling, with the highest percentage of companies earning around 10-20% of their revenue through these methods.
Rewards programs are a key driver of customer retention and loyalty — two essentials for keeping revenue consistent and reliable over time. Rewards programs are designed to motivate customers to continue buying, add upgrades, renew subscriptions (etc.) by offering rewards in exchange for these behaviors.
Rewards might include discounts, free products, gift cards, or even experiential perks like tickets to an entertainment or industry event.
According to McKinsey, the impact of rewards programs on revenue generation is significant — they boost revenue 15-25% annually from participating customers, either through increased purchase frequency or purchase size.
Revenue Generation: The Big Takeaway
Direct sales is the primary way most businesses earn revenue — but it’s not the only way to do it, and companies who depend solely on sales for revenue generation are at risk of greater negative impacts when the market goes on a downswing or they experience other types of sales challenges.
Executing a proactive, innovative, diverse revenue generation strategy with multiple streams in place is the best way to keep your business agile and resilient even in uncertain conditions.
Increase Revenue with High-Performing Marketing and Sales
Your marketing and sales teams play a critical role in revenue generation — they’re the teams engaging with customers and executing the strategies built to drive growth.
Today, many companies are turning to outsourcing to ensure they can execute both functions at the highest levels possible while staying laser-focused on product/service development and other mission-critical activities.
Televerde provides comprehensive marketing, sales, and customer experience solutions for every stage of the pipeline rooted in industry best practices and customized to meet the unique business needs of each client.
To learn more about how we can help you grow, contact our team today.