Several reports and studies have been convincing business owners and employers that flexible remote work policies can help increase general productivity at work. But did you know that the work-from-anywhere setup can also contribute to the revenue growth of the company?
Forbes published an intriguing article online discussing how an average public company that gives employees a choice over whether to come into an office outperformed on revenue growth by 16 percentage points, compared to companies with more restrictive policies.
554 Public Companies Analyzed
The Scoop Technologies and Boston Consulting Group conducted a study involving 554 publicly traded companies across 20 different sectors. Experts wanted to compare the revenue growth between companies with flexible remote work policies and companies with more restrictive policies.
According to a report, about 27 million people provided data for the study.
The study’s conclusion revealed from 2020 to 2022, companies without in-office requirements saw revenue grow 20%, while those in hybrid and fully in-person arrangements saw 5% revenue growth.
Remote Work Linked To Greater Productivity
An economist at Stanford and a prolific scholar on remote work said the new set of studies showed that productivity differed among remote workplaces depending on the employer’s approach.
According to an article published by the New York Times, studies of productivity in work-from-home arrangements are all over the map. Some papers have linked remote work with productivity declines of between 8 and 19 percent, while other research has found productivity gains of 13 percent or even 24 percent.
These disparate findings leave some questions unanswered. However, experts collectively believe it all comes down to how workers are managed.
What Is Revenue Growth? Is Calculating Revenue Growth Important?
Revenue growth refers to an increase in revenue over a period of time. In accounting, revenue growth is the rate of increase in total revenues divided by total revenues from the same period in the previous year.
Business Literacy Institute mentioned revenue growth is either the increase or decrease in a company’s sales from one period to the next. Shown as a percentage, the growth rate of revenue illustrates the increases and decreases in a given period identifying trends in the business.
The revenue growth of companies is commonly calculated annually. To calculate the revenue growth of the company, the difference between the current period revenue and the previous period revenue should be subtracted. For accuracy, each period that shall be measured should be equal in length. For example, the first quarter revenue from last year should also be compared to the first quarter revenue of this year. It is not recommended to compare
To increase the company’s income, it is also important to understand revenue growth management. Revenue growth management is also known as net revenue management. It is a strategic approach to maximizing net revenue including trade spend, or the money paid to retailers or wholesalers to promote a product.
How to Increase Business Revenue? Why Is Revenue Growth Important?
American Express discussed that increasing revenue helps a business increase its profits. Subsequently, the increase in profits allows reinvestment in the business and funds opportunities for expansion. The consistent growth rate of business revenue is important because it indicates whether a company is profitable and will thrive for many years. Serious business owners know how to calculate revenue growth. They conduct the assessment quarterly or annually to track the company’s performance and catch early on if there are irrelevant losses.
If you are a business owner and looking for ways to boost the sales of your business, here are some tips to increase the company’s revenue growth rate.
1. Grow Customer Base
Ideally, more customers means more revenue. So one way of improving revenue growth rate is to increase the customer base of your business.
According to an article by American Express, a bigger customer base can come from growing the geographic reach of the business; such as opening a shop in a new location. The customer base can also grow through online reach via social media advertising, email marketing, or driving traffic to the business’s website using search engine optimization (SEO).
2. Focus On Retention
Customer retention is a metric that measures customer loyalty, or the ability of a business to keep its customers over time.
When operating a business, it is important to focus on customer acquisition. Once the business has attained a healthy customer base, the owner should work hard at keeping them. Focusing on customer retention is another factor that contributes to the revenue growth formula.
3. Customer Services and Support
One way of improving customer retention is to provide outstanding customer service. Studies show that customers tend to a brand they were previously loyal to after a couple of poor customer service experiences.
Exceptional customer service can lead to repeat business and can become free marketing if the customer recommends your business to their friends, according to American Express. Repeat orders and new customers translate to additional sales and help achieve a good revenue growth rate.
4. Data-Driven Engagement
The revenue growth of a business can improve by utilizing analytics tools and metrics. These digital tools can generate reliable results if provided with accurate data. Business owners are capable of legally acquiring customer information. Given that, they can create business engagement plans derived from accurate data.
Revenue growth rate can increase with content marketing programs and customer engagement generated from accurate data collected from the target market of the business.
5. Refine Pricing Strategy
Product pricing can have an impact on revenue. If businesses can raise their price point while retaining sales volume, revenue growth will boost. Commonly, the company’s revenue doubles for specific months if the products of a business are in demand for a certain season.
Sometimes, revenue growth strategies may include reducing product prices to attract more customers and acquire better income.
It is vital to constantly review pricing to maintain revenue growth. Business owners should consider factors like costs, profitability, and competitors’ pricing.
6. Find New Revenue Streams
Another factor in the revenue growth formula is to find new revenue streams. If the previous period’s revenue has been stagnant for consecutive months or years, then it may be time to conduct strategic planning to develop additional new products and services related to the existing business.
A company may generate additional income when new products and services are introduced to the market. Experts mentioned introducing subscription businesses to existing clients may help increase the company’s sales.
7. Consider Flexible Remote Work Policies
According to an article published by Bloomberg, letting employees work from home is good for companies’ revenue growth. The report explored a three-year analysis led by Boston Consulting Group and Scoop Technologies Inc.
The study found that the average public company that gives employees a choice to work offsite outperformed on revenue growth by 16 percentage points compared to companies with more restrictive policies.
Experts believe flexible policies are one likely “symptom” of a culture that trusts workers, has other employee-friendly benefits, and values forward-thinking strategies, technology, and ideas. “If they’re less restrictive on [remote] work policies, they’re probably more pro-innovation, more purposeful, and more engaging,” said the senior partner at Boston Consulting Group focused on the future of work.
The flexible company policies could boost revenue growth rate and increase income mainly due to employees delivering exceptional work for feeling their value and worth to the company.
How To Hire Qualified Remote Workers
If you are interested in finding ways to achieve success, consider hiring a remote worker or a remote team for your business. Investing in highly skilled individuals can contribute to a significant boost in revenue growth rate.
Depending on the specific needs of your business, Remote Raven can connect you with qualified candidates. Some of the common duties that remote workers can accomplish are admin tasks, and accounting tasks like creating a balance sheet, keeping track of the company’s growth rate and earnings, updating regularly the company’s tax-related documents, preparing an income statement, detecting unusual changes in the market share, and collaborating with other businesses.
Virtual employees are not limited to accounting skills. They can also perform tasks related to industries like IT, healthcare, personal services, travel and hospitality, law, and education.
Contact Remote Raven now if you want to hire a remote worker to help increase the revenue growth of your business!
