research brief
The Revenue Value Chain is an academically vetted and financially valid way to connect growth investment to firm value and financial performance. This proprietary model helps CEOs, CFOS and growth leaders to create a common purpose for growth investment, prioritize actions and initiatives based on their contribution to firm value, and develop measurements and KPI that tie activities and actions to financial performance.
Academic research has proven there are 18 “causal” ways growth investment drives firm value and financial performance. Unfortunately, quantifying the return on sales and marketing investments is very difficult for leadership teams. And most measurement approaches organizations use are flawed and do not reflect the full value growth investment creates.
Our proprietary Revenue Value Chain Model explains, quantifies and proves the financial contribution of growth investment to firm financial performance. We use this common sense model to help boards, CEOs, CFOs and the growth leadership team to understand the “math of growth” and a common economic purpose for growth investment in your business. This provides a financially sound basis for developing business case, budgets, fact-based measurements, and validation research to improve the contribution of growth investment to firm value and financial performance.
The Revenue Value Chain is unique because it balances short and long-term considerations while linking marketing actions and investments to financial outcomes and firm value. The biggest benefit of this approach is it’s simple for everyone to understand. No black box models. No magic algorithms. No vanity metrics.
We believe the first step to executing a growth strategy is to achieve consensus across leadership by ensuring plans are easily understood, financially sound, externally validated. We use the Marketing Value Chain Model to create a buy-in for a consensus business case to support investment in long-term growth investment with leadership. In our experience has taught us establishing a clear understanding about the core drives of value and assumptions underlying the business plan is a critical success factor – relative to “black box” models that promise precision but are poorly understood by leadership.
Without a financially valid, externally validated and easy to understand way for your company to talk about the contribution of growth investment to firm value and financial performance, measuring the value of growth investment is like “nailing jelly to the wall”.
- Sales waterfall and funnel-based models diminish marketing as a lead generation function
- Bottoms up attribution models overweight last touch tactics vs. upstream investments that yield referrals, traffic and choice
- Top down marketing mix models optimize media allocation and impressions but are only correlated to traffic and sales – not causal
- Front of the funnel metrics are regarded as vanity metrics disconnected to financial metrics
- Bottom of the funnel metrics overweight actions and activities that can destroy firm value
- Digital and social metrics are difficult to attribute to downstream actions and riddled with fraud and transparency issues
Our expert faculty helps owners, CEOs and CXOs prove the financial value of long term growth investments to the business so they can make better growth investment and transformation decisions. We take a step-wise approach to creating an agreed upon, externally validated, and financially sound growth investment strategy and governance system. Our experience is having agreement on the fundamental ways your business creates profitable growth is far better than being precise about any individual tactics or investments. In about four to six weeks our approach will provide a consensus economic framework as a common financial foundation for your growth strategy, business case and performance KPI.
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OUR METHODOLOGY
Read how business leaders are proving the financial contribution of long term growth investment and assets to firm value and financial performance by creating a common economic purpose for growth investment across their leadership teams.
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Get a free chapter form our new book Revenue Operations and learn a financially valid formula for building a business case for your system for growth and prioritizing initiatives that contribute most to firm value and financial performance.
ASK OUR EXPERTS
Contact our expert faculty to discuss how your leadership team can use this model to build a financially valid consensus on the business case for long term growth investment