Roadmap to the CEO’s Most Valuable Revenue Growth

Today’s show will demonstrate how to create new markets through the development of new products. We are also going to demonstrate how to attract new customers to an existing product, and how to convince current customers to buy more of an existing product. This is a deep dive on product strategy. To follow along, download our 10th annual workbook, How to Make Your Number in 2017. Turn to product phase of the corporate strategy on pages 72 - 77 of the PDF.

Joining us today is Sudhakar Ramakrishna, the Chief Executive Officer of Pulse Secure. Pulse Secure is a leading provider of secure access and mobile security solutions to both enterprises and service providers. As companies increase productivity through the adoption of cloud and an ever-mobile workforce, Pulse Secure provides the security to safeguard your company. Listen as Sudhakar demonstrates how to:

• Create new markets through new products.

• Attract new customers to an existing product.

• Convince current customers to buy more of an existing product.

Enterprise value will only grow if you continue to expand. Listen as Sudhakar answers how to succeed in existing markets as well as enter new markets. We discuss what's the cost of getting into those new markets and what's the cost of not getting into those new markets? The top priority first is to expand the market opportunity through new innovations and new products. Second, growth is captured through a disproportionate share of that market expansion.

During the interview, we discuss the different types of revenue growth and which revenue growth is worth more than others and managing the portfolio along its life cycle. All in pursuit of growing revenues faster than our industry and our competitors. We debate whether a company should seek to create an entirely new category or should the company participate in a category within that category through innovation? New category creation has very different cost dynamics. Different customer acquisition costs and strategic time horizons. Listen as Sudhakar provides valuable insights into this decision for a CEO.

Sudhakar provides a great example of building trust and then expanding through innovation. Pulse Secure has a large base of customers whose investment is protected through software upgrades. During upgrades, new features are unlocked to their mobile workforce and their transition to the cloud. It is a new capability in an existing offering that makes their investment more relevant to their needs today. Through this approach Sudhakar has been able to gain share in the marketplace. He’s protecting the investment of those customers that bought products and then earning the right to expand your business with them through innovation.

All companies have portfolios, not just products, and those products are on different life cycles. Sudhakar and I discuss how the strategy's going to be a little different between products so this requires dynamic reallocation of people, money, and time, depending on where this portfolio is in its life cycle and the products within it.

Why this topic? Not all revenue growth is equal. Some revenue growth creates more enterprise value than others. Revenue growth that comes from increasing market share for a product does not create much long-term value because competitors can easily retaliate. Revenue growth driven by increasing prices of certain products comes at the expense of the customer, who can retaliate by buying less and seeking substitute products. Revenue growth driven by products that create new markets, attract new customers, and convince customers to buy more is the most valuable type of revenue growth.