Revenue Management and its operational support by way of Revenue Operations is a relatively new concept that reflects the reality of changing business models. The rise of the subscription and usage sales models is a driving factor in the change, along with e-commerce and omnichannel selling. The result is that the traditional emphasis on new business from new customers has now expanded to include a renewed and equal focus on customer retention, customer success, and expansion and upsell into the existing customer base. Together, these stand as three pillars that enable a more unified Revenue Management approach: new business and customers; customer retention; and expansion and upselling supported by organization-wide customer success efforts.
Effective Revenue Management recognizes the varying priorities and time horizons of short-, medium- and long-term needs to address new business, renewals and retention, and expansion within existing customers. Organizations typically have mechanisms to address all three of these pillars, but they are often siloed activities that are not aligned with each other or to the organization’s revenue management objectives. This can cause overemphasis on one pillar at the expense of others, for example when an organization skews resources and focus into new business only, thus putting customer experience and retention at risk.
