Revenue growth is the most important of the six drivers of long-term value creation, which is shown in Figure 9.1. While other drivers such as operating and capital effectiveness and cost of capital are important, there are practical limits and diminishing marginal returns for these drivers. Investors and owners place a premium on revenue growth and value those businesses at premiums over slower growth counterparts.
Revenue growth can also be projected and analyzed in terms of performance drivers. We can decompose expected or actual revenue growth into these drivers. While the drivers may vary from industry to industry, Figure 9.2 is a general representation for most companies. Drivers of organic revenue growth include:
Introduction of new products and services.
Retention and growth of existing customers.
Acquisition of new customers.
Develop new channels/markets.
Generate market growth and competitive environment.
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