Some revenue is easier to capture than others.  Did you know there’s a vehicle that’s been a marketing staple for years that can help improve the probability of revenue generation success?

You don’t need a new fangled application to direct your revenue efforts. Marketers, we’ve had something that’s been a staple for years.  The Asnoff Matrix.   This well-known marketing tool was first published in the Harvard Business Review (1957) in an article called Strategies for Diversification.

To quickly recap. Igor Asnoff developed the matrix as a way to evaluate and select strategic choices to achieve business objectives. The Matrix identifies four main categories:

• Market Penetration marketing existing products to existing customers
• Market Development marketing existing products to a new market/customer
• Product Development creating new products to market to existing customers
• Diversification creating new products and marketing them to new markets/customers

Predicting Your Success at Revenue Capture

The Asnoff Matrix was among the first customer-centric views into the market. The Asnoff Matrix suggests that the most probable way to capture incremental revenue is to sell additional existing products or services to existing customers/markets. This means you must truly understand your existing customers and market. The more in tune you are with your existing customers the more likely you will be able to connect your solution with what they value, need, and want.

Don’t know? Star by conducting a thorough needs analysis around your customers use of your products or services. Aim to understand how you might be able to bundle additional products or services at a lower cost (e.g., solution focus versus product sale).  Use the insights you gain to better identify, target and penetrate the most probable revenues to be had.

When you’ve captured all the market you can with in the Market Penetration quadrant, the second most probable way to capture incremental revenue is to sell your tried, tested and proven solutions into new markets. This new market may have a different pain point so you will once again need to do your homework. The customer journey, channel and touch point preferences, even the personas could be different. Avoid making too many assumptions.  

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The third most probable way to capture incremental revenue is to solve additional needs and wants of existing customers by bringing them a new product/service. This will take a different kind of research and level of investment.  Remember to use the Stage/Gate process for this quadrant.  Access the members of your customer and technical advisory boards when you decide to tackle this quadrant.

The Asnoff Matrix provides a framework on which you can build your model. D your homework. Evaluate your situation and assess which approach will provide the greatest opportunity for capturing incremental revenue and achieving success.

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