Therefore, when companies follow an inclusive approach and develop RM capabilities broadly – for example, by ensuring everyone has an understanding of the trade-offs between volume growth, revenue growth and profit growth - the time and effort needed to make RM. For example, revenue drivers for an outpatient clinic include the number of people receiving services, the type of services delivered, and the amount charged for delivering services. Cost drivers for the clinic include staff/labor costs, administrative costs, and facility costs. Revenue and cost drivers are what really define the business model. Sep 05, 2013 Simplest way to identify revenue drivers is to think what are the variables when mathematically operated might give you the revenue. Let’s look at few examples below: Airlines Industry. Revenue should have following components: Revenue from Passenger Movement; Revenue Cargo Movement; Others – Foods & Beverages sold inside the flight (in case of lo cost carriers), any. Examples of Drivers. An example of a macro driver might be a U.N. Trade embargo on all of the countries in Africa. This would affect a large portion of the market, as natural resources that come out of Africa wouldn't be able to reach their usual importers.
Revenue Driver. Definition: This term refers to something that generates revenue for the company. Example: Marketing is now thought of as a revenue driver. Variations?: Usage of 'Revenue Driver' by Country. Words Related to Revenue Driver. Retail Investors. The Drivers May Not Be What You Would Expect. For example, a top performing bank has credit quality that is more than 4x better than the average bank and risk-adjusted net interest margin that is about 1.5x better (77bp of NPAs vs. 3.31% for the average community bank).
What Is a Driver?
A driver is a factor that has a material effect on the activity of another entity. Drivers affect change in their targets and occur at many levels of the economy and stock market. Macro drivers cause changes at the overall market level. Micro drivers cause change at the company level.
Macro drivers affect large areas of the market at a time and often include large, widely-sweeping events such as wars, trade agreements or other geopolitical events.
A micro driver is anything that could materially affect either a company's earnings or the price of its stock. Every company will have its own unique drivers, although some of the most common drivers include the release of new products or services, new financing, commodity or resource prices, activities of competitors, legislation, regulation, and product diversification versus competitors.
Stock drivers have no pure quantitative units of measurement, but are more qualitative in nature.
Drivers Explained
Macro drivers are a big area of interest for fund companies running top-down strategies, as they're often concerned with what the global investment themes will be over their time horizon. Fundamental investors may be more concerned with micro drivers that affect the earnings and stock prices of the companies they are analyzing. The best fundamental investors will identify the three or four key drivers for the stocks they own and follow the status of those drivers religiously, knowing that they hold the key to the overall performance of the stock.
Examples of Drivers
An example of a macro driver might be a U.N. trade embargo on all of the countries in Africa. This would affect a large portion of the market, as natural resources that come out of Africa wouldn't be able to reach their usual importers. This would potentially have a negative effect on the industrials and materials sectors, as well as emerging markets stocks.
An example of a micro driver would be if a company like Coca-Cola acquired a large up-and-coming beverage maker that was stealing large parts of the total beverage Coca-Cola market share. This may have a positive effect on Coca-Cola stock and influence the stock price upwards. For a grocer, like Albertson's, wide margins are a large driver of company performance, while relative market share is less significant.
The following guest post is by Chris Kuenne, founder of Rosetta and of Rosemark Capital Group.Chris Kuenne
As an entrepreneur, I’ve long been fascinated by the forces that drive market acceptance and commercial success – particularly in what I call the IP-centered and tech-enabled ‘sector,’ which is comprised of those companies that have cracked the code on addressing a material economic problem and scaled that solution through technology to accelerate impact and drive rapid enterprise value.
It’s been 15 years since I founded Rosetta, a digital marketing agency that falls squarely in that sector. Rosetta experienced exponential growth, leading my team and me to realize that in order to globalize the firm we had built, we needed a strategic partner; we selected the In the eight companies that we chose for our beta round study, annual revenues ranged from $5 million to $183 million; the oldest was 14 years old; all but one is still being run by its founder. The focus of this study group is wide-ranging, from marketing technology, software and programmatic ad buying to pharmaceutical clinical trials, home appraisals, pre-paid wireless, ad tech and digital consulting. First off, we learned that entrepreneurs don’t like being pigeon-holed, nor do they tend to make elaborate plans, measure markets, or use scorecards. (“Roadmaps? Really?” was one of the theories that was shot down often enough that we knocked it off the cornerstones.) But the interviews did confirm that – planned or unplanned – the companies’ outsized growth was clearly enabled by the Cornerstones in ways that can be instructive to other entrepreneurs focused on building valuable enterprises. Here are some highlights. Focused on a material, economic problem. While not all companies took measure of the markets they were entering, each of their offerings has significant impact on their clients' ability to improve their bottom lines – and therefore, their own potential to expand rapidly with initial, then new clients in the same market. The clinical trials company pioneered the combination of videoconferencing and standardized patient analysis for pharmaceutical companies that have long struggled with measuring the separation in efficacy between placebo and active drugs in the Central Nervous System therapeutic drug trials, whose typical failure rate is 50%. The companydeveloped an elegant root-cause solution to address the underlying reason for these failures and took the expected failure rate from 50% to 15%. Each point of risk reduction is worth $4 million to $5 million in expected net present value to a pharma client; so bringing the risk down from 50% to 15% gave companies a return on investment of well over 10 to 1, while helping the clinical trials company rocket in revenues and enterprise value. Build a platform that is preemptive, pivotal, proprietary, and scalable.The software marketing company invented a proprietary way for customers to generate leads byre-thinking the way people actually shop and buy things today. They created a pivotal solution that allowed customers to shift from a traditional model to a new “inbound” marketing model that was less disruptive and intrusive, which translated into significant improvement in their customers’ key economic metrics (leads and conversions). It then built a software platformcombining a series of levers clients traditionally cobbled together themselves – blogs, SEO marketing, CRM – into one simple solution, enabling it to scale across clients and industries. Brand, culture and talent management support the mission. The ad tech shop is known both for its brilliant technologists and steadfast commitment to being honest brokers in what can be a sometimes dishonest eco-system -- purveyors of social media plans, for example, who provide ‘results,’ or hits, for their clients that do little to actually lift the brand. The company’s work to patent technology to bring clients greater transparency is consistent with both its upright citizens’ branding and internal mission profile, with its tech team seeking to be first to market with something that will improve client experience while bringing broader integrity to the space. Its sheet of articulated values, which each new hire reviews at orientation, begins with “we’re honest with ourselves and with each other.” Reinforcing those values has attracted top talent and clients alike, and spurred spectacular growth in a hugely competitive space. Rigorous measurement of value-creating metrics to guide and reward management. Every company that we have examined so farmeasures customer impact down to the individual employee level, with performance, of varying sort, implicitly or explicitly conveyed and understood. The marketing tech company reviews employees quarterly; anyone receiving below an 80% rating understands that it's time to leave, and does leave – and it measures performance, revenue, margin and delivery. The marketing software company measures growth, but ties it to returns on the lifetime value of a customer -- if the latter is high, they spur growth but if there's a lower return the focus shifts to lifting that customer value. The final grade: are customers happy? This month we'll begin interviewing another 20 relevant companies to round out the study. Will the Growth Cornerstones hold up? Stay tuned. The following guest post is by Chris Kuenne, founder of Rosetta and of Rosemark Capital Group. As an entrepreneur, I’ve long been fascinated by the forces that drive market acceptance and commercial success – particularly in what I call the IP-centered and tech-enabled ‘sector,’ which is comprised of those companies that have cracked the code on addressing a material economic problem and scaled that solution through technology to accelerate impact and drive rapid enterprise value. It’s been 15 years since I founded Rosetta, a digital marketing agency that falls squarely in that sector. Rosetta experienced exponential growth, leading my team and me to realize that in order to globalize the firm we had built, we needed a strategic partner; we selected the My new roles, teaching high-tech entrepreneurship and launching a private equity firm, lend themselves ideally to the task, and since last fall we’ve researched hundreds of high-growth companies in order to find a group that met our criteria for study: 1. CAGR of 25% or more over the last 3 years; 2. revenues of at least $5 million in the most recent year; 3. a genetic makeup that is IP-centered and tech-enabled; and 4. profitable-- a key point of validation that true economic value is being created. My hypotheses going into the study center on what I callthe '4 Growth Cornerstones,” characteristics that high-growth companies in our sector seem to share: In the eight companies that we chose for our beta round study, annual revenues ranged from $5 million to $183 million; the oldest was 14 years old; all but one is still being run by its founder. The focus of this study group is wide-ranging, from marketing technology, software and programmatic ad buying to pharmaceutical clinical trials, home appraisals, pre-paid wireless, ad tech and digital consulting. First off, we learned that entrepreneurs don’t like being pigeon-holed, nor do they tend to make elaborate plans, measure markets, or use scorecards. (“Roadmaps? Really?” was one of the theories that was shot down often enough that we knocked it off the cornerstones.) But the interviews did confirm that – planned or unplanned – the companies’ outsized growth was clearly enabled by the Cornerstones in ways that can be instructive to other entrepreneurs focused on building valuable enterprises. Here are some highlights. Focused on a material, economic problem. While not all companies took measure of the markets they were entering, each of their offerings has significant impact on their clients' ability to improve their bottom lines – and therefore, their own potential to expand rapidly with initial, then new clients in the same market. The clinical trials company pioneered the combination of videoconferencing and standardized patient analysis for pharmaceutical companies that have long struggled with measuring the separation in efficacy between placebo and active drugs in the Central Nervous System therapeutic drug trials, whose typical failure rate is 50%. The companydeveloped an elegant root-cause solution to address the underlying reason for these failures and took the expected failure rate from 50% to 15%. Each point of risk reduction is worth $4 million to $5 million in expected net present value to a pharma client; so bringing the risk down from 50% to 15% gave companies a return on investment of well over 10 to 1, while helping the clinical trials company rocket in revenues and enterprise value. Build a platform that is preemptive, pivotal, proprietary, and scalable.The software marketing company invented a proprietary way for customers to generate leads byre-thinking the way people actually shop and buy things today. They created a pivotal solution that allowed customers to shift from a traditional model to a new “inbound” marketing model that was less disruptive and intrusive, which translated into significant improvement in their customers’ key economic metrics (leads and conversions). It then built a software platformcombining a series of levers clients traditionally cobbled together themselves – blogs, SEO marketing, CRM – into one simple solution, enabling it to scale across clients and industries. Brand, culture and talent management support the mission. The ad tech shop is known both for its brilliant technologists and steadfast commitment to being honest brokers in what can be a sometimes dishonest eco-system -- purveyors of social media plans, for example, who provide ‘results,’ or hits, for their clients that do little to actually lift the brand. The company’s work to patent technology to bring clients greater transparency is consistent with both its upright citizens’ branding and internal mission profile, with its tech team seeking to be first to market with something that will improve client experience while bringing broader integrity to the space. Its sheet of articulated values, which each new hire reviews at orientation, begins with “we’re honest with ourselves and with each other.” Reinforcing those values has attracted top talent and clients alike, and spurred spectacular growth in a hugely competitive space. Rigorous measurement of value-creating metrics to guide and reward management. Every company that we have examined so farmeasures customer impact down to the individual employee level, with performance, of varying sort, implicitly or explicitly conveyed and understood. The marketing tech company reviews employees quarterly; anyone receiving below an 80% rating understands that it's time to leave, and does leave – and it measures performance, revenue, margin and delivery. The marketing software company measures growth, but ties it to returns on the lifetime value of a customer -- if the latter is high, they spur growth but if there's a lower return the focus shifts to lifting that customer value. The final grade: are customers happy? This month we'll begin interviewing another 20 relevant companies to round out the study. Will the Growth Cornerstones hold up? Stay tuned.
Key Revenue Drivers
Examples Of Revenue Drivers License