Predictable Revenue Model

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A Predictable Revenue Model enables a company to become a market leader by unleashing its full revenue potential so it can consistently achieve a high growth rate, year after year.

Why High Growth Rate Matters

Companies that grow at a high rate tend to be market leaders. Market leadership is important because brings with it strong financial rewards, such as high valuation and high profitability.

  • Customers generally prefer to buy from market leader, as they feel it is less risky to do so. This naturally reduces the cost of marketing and selling for the market leader. Furthermore, customers expect to pay a premium for buying from the market leader. Higher prices at lower marketing and sales costs translate into higher margins.
  • Vendors as well prefer to work with market leaders and are willing to give favorable pricing and terms to gain their business. This further enables the market leader to keep input costs low while charging premium prices for its products and services.
  • Finally, market leaders have less recruiting and hiring costs compared to their competitors, while still attracting the best talent.

More profits and better talent will eventually result in greater competitive barriers being erected, enabling the market leader to become dominant for possibly a long time.

Clearly, high growth rate matters. The real question might be how does one achieve it. And how much should that rate be? And how much will this expensive initiative cost?

A Predictable Revenue Model attempts to provide answers to these critical questions.

Structure Predictable Revenue Model

A Predictable Revenue Model (PRM) has three main phases: plan; execute, and learn. Each has its own role to play, but all three have to work together to deliver the true power of PRM.

  • Plan
    • Targets
    • Metrics/KPIs
    • Resources
    • Execution Plan
    • Budget
  • Execute
    • Setup
    • Nail
    • Scale
  • Learn
    • Measure
    • Analyze
    • Adjust
    • Document

These are the components of a Predictable Revenue Model, whose purpose is to enable a company to become a market leader by unleashing its full revenue potential so it can consistently achieve a high growth rate, year after year. It is agile, constantly renewable and repeatable, and it should work in any company.