Revenue Growth and Marketplace Penetration in 2024
Ephor Newsletter
Clearly with all the political and economic disruption of recent revenue growth and penetration into new or existing markets has at best been challenging and expensive, especially over the last 2 or so years. Unfortunately, at Ephor we expect this to continue well into 2025, and potentially beyond. Therefore, what can we do differently and how should we do it?
What is clear to us at Ephor, as illustrated by the recent performance of our investments and clients, is that the “ole’ school” days of direct sales and direct selling, especially of B2B services, are simply not and are no longer cost-effective from a cost of customer acquisition and labor productivity perspective. Therefore, for consistent and scalable success to occur, transformational change is generally required.
As a recent of significant change in thinking and processes over the past 5 years our clients and investments have illustrated impressive revenue growth (and related Enterprise Value increases) by implementing and executing on a “Portfolio” of new revenue and new client acquisition venues including:
Productization of Services: by “Productizing Services” you simplify the distribution to the “Ideal Client Profile” within a vertical market for that service. Likewise, productization allows for a simple franchise effect at the service level which enables channel, referral, and strategic partners to “sponsor, support and deliver the product/service”. At Ephor we have realized significant shareholder value utilizing a “Product Management” concept for services
Portfolio of Distribution Venues: It is well known and accepted that a business model that is effective (one that illustrates a lower or scalable cost of customer acquisition) at the product/service distribution level with not just “direct selling” commands a higher Enterprise Value (EV). Therefore, Ephor’s guidance is to design and implement a distribution portfolio mix reflective of the following:
Direct Sales: 25% of all new clients and revenue growth
Channel Distribution: 40% of all new clients and revenue growth
Referrals from Existing Clients etc.: 20% of all new clients and revenue growth.
Product Marketing/Product Management: Brand Equities: Trade Shows etc.: 15%
This portfolio concept not only provides scalability and more productive “Cost of Customer Acquisition” structures, it also provides a “lower risk profile for financing sources” and results in more favorable financing terms combined with increased Enterprise Value (EV).
As such, providing tactical, and guidance on “best practices” on how to implement a “Portfolio of Revenue Sources” needs to be specific and “customized” to your company and your markets.
Therefore, we are happy to provide on a gratuitous basis an hour of our time & knowledge to “customize” some relevant thoughts on your situation. Please click the link below to schedule your time to discuss your transformation change requirements.
Garry E. Meier Strategic Advisory Practice Lead Ephor Group, Inc.