LavaCon Perspectives: Stop Cutting Costs. Start Enhancing Revenue

perspectives-BakerA number of themes typically emerge from a professional conference. For me, the dominant theme of the 2014 LavaCon Conference in Portland was simple: stop cutting costs; start enhancing revenue.

Both cutting costs and enhancing revenue add to the bottom line, of course. And it is easy to come up with a spreadsheet showing how some new initiative will cut so much cost. But there are some fundamental problems with the cost-cutting approach:

  • There is only so much cost you can cut. At the end of the day, you reach the point where there are no more costs to cut without cutting your own job and eliminating your own function. Revenue enhancement, on the other hand, is open-ended. You can enhance revenue over and over again.
  • Cutting costs portrays you as a cost center, as a place where costs can be cut the next time the company feels the need to cut costs, as a place that some other department can look to steal headcount during a headcount freeze. Enhancing revenue portrays you as a profit center, a place where continued investment yields greater rewards.
  • When you cut costs, you have less money, fewer people, and less influence. When you enhance revenue, you get to keep your money, keep your people, increase your influence, and get to ask for more.

scissors-moneyTech comm has traditionally tended to take the view that they do not contribute to revenue generation because no one reads the docs before the sale is made. This has never really been true, but even if it were, it would not mean that tech comm did not contribute to revenue generation.

Christopher Ward pointed out that there is a growing understanding in the sales community that the sales process does not end with the sale, or even with the implementation of the system. It continues into the post-implementation phase. Jennifer Fell made the point that the traditional sales funnel, which used to end with the sale, has been replace with a sales hourglass that opens up after the sale to encompass all the follow-on business that can occur if the customer is happy with their purchase experience.

In Liz Fraley’s talk on choosing tools, she emphasized that you should not think of sales people as the enemy because they don’t want to sell you something that does not meet your needs. And Doug Gorman, of Simply XML, commented that vendors will actively avoid making a bad sale, because they know that the ill will that results from selling an inappropriate solution will affect their overall sales performance.

Customer experience after the sale matters deeply to the continuing revenues of a company. A bad sale damages the customer experience and ultimately damages the vendor’s revenues. Christopher Ward noted that it costs seven times as much to get a new customer as to keep an existing one, and even more to get back a customer who has left. Yes at the normal rate of attrition, a company loses half its customers over a five year period. Keeping customers is therefore a key to continued revenue growth.

What does this have to do with technical communication? Simple: content — specifically, technical content — is fundamental to creating a good customer experience, particularly for complex technical products.

But content also play a huge role in the pre-sales process. 87% of Americans use the internet to research purchases. Where your content ranks in Google searches, and how well it works when found are vital in generating sales leads.

Throughout his presentations, Ward repeatedly emphasized the importance of getting your content onto the Web (a theme dear to my own heart). Content on the Web has a far greater potential to increase company revenues than content locked in a manual. If executives are hesitant to put technical content on the Web, it is because we have not educated them about the role that technical content can play in revenue generation. To break out of the cost-reduction cycle of doom, we need to optimize our content for revenue enhancement, and we need to demonstrate clearly to our executives the impact content can have on revenue.

money-growSales leads are one of the most fundamental ways in which tech comm can demonstrate that it contributes to revenue according to Ward. Leads are the basis of the sales funnel, and sales people know the rate at which they can convert leads into sales and the value of those sales. Thus a specific number can be attached to value of a lead. If you can show that 10 leads were being generated before the a piece of content was posted, and that leads jumped to 20 after the content was posted, you can immediately demonstrate the revenue enhancement of the content.

Tom Aldous of Acrolinx had the same message about cost cutting. Even when you are cutting costs, he argued, cost cutting itself is not enough. You have to make sure that what you are doing aligns with corporate goals. Perhaps your content management initiative has reduced translation costs by 20%. But a far more important impact may be that it has improved your time to market in overseas markets, which can result in significant enhanced revenue. Even when you focus is on efficiency, you should be accounting for it primarily in how that efficiency contributes to enhanced revenue, not reduced costs.

One of the most telling points that Fell and Ward made, in their joint “Revenue Content Strategy 101” session, occurred when they drew a clear distinction between two meanings of the word “content strategy.” Content strategy has become the aspirational title and the aspirational career for many writers. In the process, though, it has often been stripped of its most important element: a focus on revenue.

Thus we often see content strategy defined as a strategy for creating, managing, and publishing,  content. Ward and Fell, however, made it clear that that definition is not sufficient for them. For them, content strategy is about ensuring that content contributes to enhanced revenue for the organization.

It is time to stop thinking about cost-cutting and start thinking about revenue enhancement.

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