C-suite executives struggle to achieve effective revenue management, losing billions of dollars through revenue leakage, according to a survey by Model N, a provider of cloud revenue management solutions. Some 75% of the respondents believe they “leave money on the table” and must do better.
According to Model N’s 2020 State of Revenue report, 82% of the respondents said that revenue management has become increasingly difficult, estimating the impact of losses due to revenue leakage to be in the billions of dollars. Almost all of the executives agreed they face challenges with revenue management, with 73% concurring that pricing decisions leave money on the table. Pricing inconsistencies that are visible to customers embarrass 90% of the respondents.
Virtually all of the executives — 99% — feel they would benefit from additional revenue management capabilities, and can identify places they can improve revenue management. For example, almost half of the executives said real-time visibility into revenue performance, channel sales, and inventory data would help. Tech executives’ top priorities for improving revenue management include:
The results illustrate that high tech executives are hungry for more and better-quality decision-making data, Model N stated. Some 48% of the respondents reported they are forced to make decisions with incomplete information, and 41% say that they spend too much time chasing down information from people and systems. Only 36% of executives say that they have a single, integrated application for revenue management.
Among the CMOs who responded to the survey, 39% are faced with a wide range of channels and segments with different needs. A quarter of them pointed to channel management as an area that would have the greatest impact on their company’s overall business results if it could be managed more effectively. Improved speed and accuracy of doing business with channel partners is a key revenue management capability that would be beneficial to 42% of the CMOs.
“Technology companies face a complex and ever-changing global market for their goods, made increasingly difficult by poor controls over volume-based pricing discounts and poor visibility into channels sales, not to mention ‘black swan’ events like sudden shifts in trade policy,” commented Chanan Greenberg, SVP and GM High Tech at Model N in a press release. “High tech business leaders know they can do better when it comes to revenue management but remain unsure about just how to unify their process, people and systems silos to gain the visibility and control they need to be competitive.”
New methods like leveraging an end-to-end integrated approach that breaks down functional silos to control price concessions, align volume performance, and incentives as a single continuum with the power of AI can be highly effective, even in today’s turbulent times, Greenberg said.