Revenue Intelligence is an important aspect of any business. It is what helps you figure out where your money comes from and how to invest it so that you can grow as a company and be as profitable as possible.
The simplest definition of Revenue Intelligence is “the awareness of the financial performance of your business.” Or, put another way, Revenue Intelligence is the ability to accurately analyze and understand your company's financial reports so that you can make smart decisions about allocating your money.
For example, you might be considering opening a new location for your business, but you’re not sure if it’s a good idea financially. The best way to figure that out is to look at your revenue intelligence reports.
When you use the revenue intelligence reports, you'll see how much revenue the new location would generate and whether or not that amount is enough to justify opening the store.
More on Revenue Intelligence
For a growing business, revenue intelligence can help in three key areas: forecasting, budgeting, and prioritization.
Forecasting helps a company predict what its revenue will be for future periods, which allows it to plan ahead.
Budgeting is a way to set goals and decide where the money should go, while prioritizing focuses on the most important things that need to be done.
The strategic role of revenue intelligence within the business, and how to put it into context, will help you better understand its importance. This strategic role of revenue intelligence can be broken down into two areas: external driversand internal drivers.
External revenue intelligence helps a company respond to environmental factors ,such as regulatory changes or market shifts.
Internal revenue intelligence, on the other hand, looks at the things that a company can control, like product development and pricing decisions.
Steps to Get Started with Revenue Intelligence in Your Organization
In order to get started with revenue intelligence, there are a few essential steps that should be taken. The first step is identifying where your data comes from.
From there you will want to identify which tools are needed for analysis and reporting, and then finally decide on the content and reports that will best help you meet your organizational goals.
There are multiple ways to measure revenue intelligence, but the most important is the idea of predicting revenue. To do this, it is very helpful to use a rolling average.
The rolling average essentially lumps together data from the last 12 months and normalizes it against the current month. This way you can identify what your trends are in actual numbers instead of percentages.
This is a great method for identifying whether or not you will be able to achieve your goals for the current month and actually helps
Benefits of Revenue Intelligence
According to CRMzone, revenue intelligence can help businesses with driving predictable revenue. The many benefits of using this information include:
- Knowing how customers behave: Revenue intelligence allows you to know what customers want and when they'll want it
- Understanding trends in customer behavior: This will help you predict future trends and give better projections
- Knowing what prices would work best for your specific business: You'll be able to see which price point is most profitable for your company and product
- Better customer targeting: You'll know what your customers want and how to give it to them, this will lead you to better customer satisfaction
- Customer retention: Knowing how your customers act and target them specifically will help you retain customers more effectively
- Lowering the cost of acquisition: You'll be able to lower the costs of acquiring new customers by knowing where they are, what they want and how much they're willing to pay for it.
By utilizing data intelligence, you’ll be able to better measure, predict, and manage your revenue. You’ll find insights you can act on to not only generate more revenue, but also understand what the data is telling you and how that data can work with other data.
That way you can make strategic changes that will grow your revenue predictably.