How are Lifecycles Influencing Your Revenue Growth?

Your organization and its products, markets and buyers that produce one time or ongoing revenue streams each have a lifecycle.

A lifecycle has a beginning (birth) and a end (death). Each lifecycle includes stages of maturity. Maturity stages within lifecycles will impact your revenue balance as it relates to various lifecycles and revenue generation. In order to effectively plan for growth an organization must analyze these lifecycles and map them against their existing organization’s lifecycle and growth plans.

Lifecycles include certain influencing factors. An influencing factor could be something as subjective as analyst coverage or something much more tangible such as a buyer procurement cycle. The objective of this briefing is to expose specific lifecycles and illustrate how your organizations revenue balance and growth could be impacted based upon lifecycle stages and influencing factors.

Product and services organizations are structured and managed differently. Both have unique revenue recognition, utilization, profit and lifecycle nuances to manage. Organizations that fail to find the "right" revenue and profit balance supporting double digit revenue and value growth often find themselves struggling with cyclical cash flow issues that typically inhibit profitable growth. Identifying various lifecycles that impact your organization and creating a strategy to ensure proper revenue balance will be critical to the success of your organization.

Executive teams should consider that revenue and profit projections are dependent upon lifecycle stages and must factor the following lifecycle influencers when creating growth strategies:

The Lifecycle of the Marketplace or Market Segment:

• Immature
• Evolving
• Emerging
• Mature
• Declining

Lifecycle of the organization selling within the segment:

• Start Up
• Early Stage
• High Growth
• Mature
• Declining

Lifecycle of the product or service being sold within the market segment:

• Immature
• Emerging
• Mature
• Commodity
• Declining

Demographic and adopter cycle of buyer within market (based on Geoffrey Moore's Crossing the Chasm):

• Innovator - Leaders
• Early adopter (Visionary) - Winners
• Early majority-MAINSTREAM MARKET POPULATION - Pragmatists - Vertical Buyers
• Late majority - Conservatives
• Laggard - Skeptics - Losers

5 Quick questions to ask yourself on lifecycle preparedness:

1. Have you documented and analyzed the various lifecycles within your market segment?
2. Have you created growth and financial models for each level of those lifecycles?
3. Have you identified what lifecycle stage(s) determines high growth for your firm?
4. Have you created processes and disciplines around revenue generation and marketing within your organization to ensure lifecycle awareness and tracking?
5. Have you validated your go to market and performed a lifecycle and revenue growth gap analysis to identify inhibitors that might have not shown themselves yet?

Awareness, demand and education is often required to pull prospective clients to your organization but in order to produce effective marketing materials, sales communication and approaches within your go to market you must first understand the lifecycle of your company in relation to the product, market, and buyer.

Mastery of balanced revenue growth and lifecycle alignment is critical within executive levels of any organization. This level of knowledge is not found in educational institutions but through experience in building high performing marketing and revenue generating organizations.

Lack of experience and comprehension of revenue balance and lifecycles has fueled the following statistics:

1. Sales and Marketing turn over in the high tech marketplace was over 72% in 2004
2. In 2003 63% of Fortune 500 CEOs had been on the job less than 1 year; some organizations estimated that since 1998 nearly two thirds of the worlds companies had replaced their CEOs.
3. CFO turn over has spiked between December 1st 2004 to January 31st 2005 up nearly 200% from the same time last year
4. Hi Tech CEOs have some of the highest turn over rates
5. Debt in businesses with less than 500 employees has grown from $680 Billion to over $1.3 Trillion since 1998

*1.Culpepper 2.Fortune Magazine 3. Drake Beam Morn (DBM) 4. Booz Allen Hamilton 5. SBA

Influencers and inhibitors to revenue and value growth with various lifecycle segments can be identified and addressed through revenue and market place audits and analysis.

For more information on having VentureFuel perform and audit and analysis for you contact me at 401 475 3106 or email Paul Lavallee at VentureFuel.