Most business leaders can trace the root source of revenue leakage to this:
Not capitalizing on the full value of existing contracted commercial relationships. That includes the financial value within relationships today, and perhaps more importantly, the customer lifetime value.
Piecing together the relationship - thousands of times a day.
Where can I increase prices? What discounts are in effect? Where do we have non-standard SLAs? Which terms should we focus on at renewal time? Answering seemingly simple questions requires tracking down the right documentation—master agreements, amendments, order forms, and more—reading through dozens of documents, and piecing together precise information.
What causes this leakage throughout your business?
In more than 12 years of working with B2B business leaders, we’ve learned a thing or seven, actually, about where the most common sources of revenue leakage occur across commercial relationships. We call these sources of leakage “levers.”
These levers tie directly to areas within your commercial contracts and billing processes where revenue performance may not be matching up to the actual terms of your agreements. And when that happens, you could be losing millions of dollars every year to uncontrolled revenue leakage.
The 7 Common Revenue Levers
Entitlement & Billing Reconciliation
You struggle to compare actual usage to the contract, leaving you unsure what the customer owns versus what they’re paying for.
Result: Over/Under Charged Customers
Contracted Pricing Variables
Pricing increase decisions left to sales in the moment vs. using programmatic guidance leads to missed contractual increase opportunities.
Result: Missed Revenue Growth
Sales Process Productivity
Relationship information is located across multiple documents and systems, not readily accessible or usable, becoming dated, inaccurate and incomplete.
Result: Fewer Deals Processed
Understanding at-risk customer attributes requires sorting through years of documentation. You miss opportunities to expand the customer relationship.
Result: Excess Churn
Finding and figuring out complex service obligations challenges the whole team, so you have no real idea of your performance.
Result: Unnecessary Service Penalties
Sales is unclear what customers own vs. what you could sell them and wastes precious time tracking down the data.
Result: Suboptimal Expansion Offers
You defer way too much revenue because payment terms are too long, or you can’t find all your rev rec considerations and assess the risk.