Maximising Your Professional Services Firm's Profitability: A Guide To Balancing Your Revenue Ecosystem

ACCELERATE THE PROFITABILITY OF YOUR PROFESSIONAL SERVICES FIRM. 

This is Part 2 of the Revenue Ecosystem Series 

If you haven't already, Read Part 1 - Revenue Ecosystem: The Modern Way To Grow The Profitability Of Your Professional Services Firm here

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Viewing revenue creation and growth as an Ecosystem gives SMEs the advantage they need to succeed at consistently finding new opportunities and ultimately growing their revenue. But while ecosystem thinking is critical, it's only the first step.

In this blog post, we cover:

• How A Balanced ‘revenue Ecosystem’ Can Accelerate Your Revenue Growth
• What A Revenue Ecosystem Looks Like In Action
• Pointers On How To Apply This To Your Business

A ‘Balanced’ Revenue Ecosystem = Accelerated Profit Results

A balanced Revenue Ecosystem benefits all functions and components of your business, as we all understand from the natural world, how destructive an imbalance in an ecosystem can be.

A Revenue Ecosystem grows your profits incrementally across a range of areas so it increases your results and success and lessens your risk. 

As global business EY states:  

“Not all ecosystems are created equal. High-performing ecosystems drive on average 1.5 times the cost reduction, and generate 2.1 times the incremental revenue growth, compared to low-performing ecosystems.” 

A balanced ‘high-performing’ Revenue Ecosystem, finely tuned to your business goals and needs is the key to predictable revenue growth. 

As we mentioned earlier in this article series, there are 14 key revenue-influencing areas that make up a typical Revenue Ecosystem.

And while every business already has many, if not all components already, developing an ecosystem means all these revenue-influencing functions will work in sync or balance for the desired results to occur.

It's important to note and understand that there isn't a set hierarchy of areas to address. Your unique goals and revenue outcome adjectives determine the prioritisation of areas and ultimately how to ‘balance it’  This balance typically evolves over time and is tweaked and adapted and adjusted based on data and metrics and evolving goals and market influences.

Your Revenue Ecosystem In Action

In terms of a practical example of a Revenue Ecosystem in action, as we’ve mentioned before, implementing an ecosystem approach requires you to look at and consider how a change in one area of your business can or will impact all the other areas of the ecosystem. 

So in a practical sense, If for example, you were considering altering your pricing…

Many businesses believe their options are simply twofold - dropping them or raising them. Both of these strategies come with their own set of issues…

If you were to, however…

Look at it through a broader lens and consider a range of factors that will deliver you better long and short-term results. We refer to this as ‘A CRO [Chief Revenue Officers] View, ‘you might look at it as a wider inclusive view of the factors that influence your profitable revenue.

So under pricing, you would also consider - 

• The various types and models you could run, 
• What the market could  reasonably afford
• Your revenue goals, and what impact will this have on them  
• Your product or service  (what's happening with it in the next period of time) that could influence your decision
• How changes can affect your messaging and status positioning 
• How your marketing could be positively tweaked which runs through to how sales discuss it with clients, 
• How do you measure it, and 
• The upsell or on-sell effects pricing considerations will have.

The key message is that if you look more broadly when you make decisions the options and opportunities greatly increase to incrementally find additional revenue options in your business. 

And it's important to take into account not just the now, but what your revenue and business goals are, the direction you wish to take your business in and what market and client trends will be moving forward.

Applying The Ecosystem Approach To Your Business…

So how do you practically take advantage & get the results of thinking broader via the ecosystem approach?

The Revenue Ecosystem approach means: 

1. Exploring each of the 14 key revenue-influencing components to

• Understand where your business currently sits. 
• Understand what you want to achieve in your business from a revenue perspective. 

Outcome: Understand Your Current Position

2. The next step is then to consider how each of the core areas impacts or influences its interdependence on the other areas (this is the ecosystem) in order to realise your unique business and goals

One of the advantages of embracing an ecosystem approach is that it can be done incrementally.

While the Revenue Ecosystem is a methodology to apply to your business in growing predictable and sustainable revenue,  the practical manifestation of this is a revenue engine… a series of systems and processes built and finely tuned for your business. 

Simply put every business making revenue already has one.

A Revenue Engine is the practical step-by-step implementation of your revenue ecosystem and is fine-tuned specifically for YOUR business and covers every step in the attraction, conversion, retention and expansion of your business's revenue.

When performed in the right manner and consistently it will lead to more predictable and consistent revenue growth and control.

What Type Of Business Benefits From This Approach?

While many of the broader concepts underlying the ecosystem approach are used in large businesses & Enterprise, it translates and is highly applicable to ambitious SME’s, because all businesses regardless of size or industry need, and in many cases already have, all the same, core components to be successful. The differences typically relate to the scale and complexity of the function as some will have or need fewer people, internal resources, individual areas of management, and current scale.  

Key Takeaway

Understanding the concept of a ‘revenue ecosystem’ has helped many Professional Services business owners and managers take control of growing their revenue options and opportunities, their profitability, and solving diverse business challenges.

The underlying principle is to start to view revenue as an interactive “ecosystem” and not just consider areas singularities such as sales or marketing or a number or a function,(  while these are very important and we work heavily with them they are only part of the story)

In Summary

By looking at revenue as an interactive ecosystem your business can make more informed aligned decisions, and gain short and long-term revenue growth along with greater control in a fluxing world. 

By adopting even just a few ideas you will gain greater control, predictability, and sustainability, profitability and open many new doors and options for your business. 

Embracing a Revenue Ecosystem is critical to keeping up with…and staying ahead of the pace of change…Because let's face it, these past few years have added a layer of complexity to consumer behaviour, meaning that businesses need to be more resilient and responsive than ever. Thinking in terms of interconnected ecosystems can help even the most established or sophisticated brands become more future-capable. 

And businesses that don't embrace Revenue Ecosystems risk falling behind. By adopting a Revenue Ecosystem approach, businesses in any industry can evolve ahead of expectations, and be flexible in response to shifting client demands and market dynamics. 

By adopting even just a few ideas you will gain greater control, predictability, and sustainability, profitability and open many new doors and options for your business.

#RevenueReimagined  #RevenueGrowth   #Alignment  #Business #RevenueEngine

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If Profitable Revenue Growth is a priority for your business…

Whenever You're Ready, There Are 3 Ways We Can Help You:

1. If you want direction RIGHT NOW that you can implement into your business…

Our Revenue Snapshot is a quickstart action plan that helps professional services businesses quickly understand the revenue blockages, identify where profit opportunities lie, and highlight priority action steps to help you achieve your profit goals.

2. If you want to grow your profitable revenue...

Our Profit Growth Advisory Service, The CRO Experience shows you how to build a custom long-term revenue engine for your business…solve your revenue challenges so you can consistently grow your profits, achieve your profit goals, and be in a position to successfully handle whatever the market throws at you.

3. If You Want To Get Your Managers On Board To Contribute To Revenue Generation…

The Rainmaker Workshops are Interactive + Practical Profit + Revenue Growth Workshops aimed at making revenue a company-wide responsibility. 

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