Economic / Revenue Models

Budgets are always finite and resources are always scarce. As a result, it’s imperative to use investment dollars and resources where they really count: where they will do the most good and where they are most needed in light of market and revenue opportunities. That is why the final step before jumping into any implementation of integrated multichannel sale system is to validate the economics of the strategy and build a business case, to be presented before the management to get their buy-in.

Most organizations tend to take last year’s cost numbers and adjust them incrementally upward or downward, depending on which sales and marketing activities are doing well. This kind of conventional, incremental budget planning may work acceptably with a single channel but it doesn’t work with integrated multiple channels. Integrated multiple channels require a different approach. First, complex multiple channels systems must be managed and funded against specific revenue and market projections to ensure that channel spending doesn’t become a runaway train. Second, channels should be invested in collectively.

With scarce resources,  allocated them across the full range of channels — to ensure that each channel gets exactly what it needs to meet its projection — needs detailed planning. Such planning has four steps:

1. Define revenue opportunities by channel
2. Estimate channel resources
3. Build go-to-market cost models

This section explain these steps in detail, starting with "Define revenue opportunities by channel".

Related:

• Table of Content
• Red Queen Effect – An Introduction
  
• The Billionaire Code
  • Secret of World Class Companies
    
  • Impact of Using Secrets of World Class Companies
    
• Cracking the Code
  
  • Customer Experience
    
  • Customer Engagement Channels
    
  • From Multiple Channels to Integrated Multichannel Selling
    
  • Benefits of Integrated Multichannel Selling Models
    
  • Customer Relationship Lifecycle
  • Integrated Multichannel Selling Models
    
    • Reduced Costs
      
    • Improved margins
      
    • Broader market coverage
    • Rapid revenue growth
      
  • In Conclusion
    
• Implementation Plan
  • Renovation or Innovation?
    
  • Implementation Process
  • Baseline Current Go-To-Market Activities
    
  • Protect & Renew
    
    • You've Got Customers. Now What?
      
    • Net Promoter Score
      
    • Customer Profitability – A look from inside
      
    • Finding Treasures
      
    • Customer Life Time Value
      
    • Calculating Customer Life Time Value
      
    • Unearthing the Treasure
      
    • In Conclusion
      
  • Plan for New Sales
    
    • Targeting the Right Market
      
    • Market Segmentation
      
    • Prioritizing Target Markets
    • Align with Your Customers
      
    • Example of Customer Experience Mapping
      
    • Mapping Customer Experience
      
    • Drawing Customer Persona
      
    • Customer's Moments of Truth
      
    • Identifying Appropriate Levers to WOW Customers
      
    • Establish Channels to Deliver the WOW Experience
      
      • Applying Customer Filters
      • Channelizing a Product
      • Prioritize Channels
        
    • Market Coverage Maps
      • Channel Mix
        
      • Channel Integration
        
    • Economic / Revenue Modeling
      • Define revenue opportunities by channel
      • Estimate channel resources
      • Build go-to-market cost model