Revenue and Profitability Management
Managing the revenue stream, using internal (organizational) and external (industry, market) sources of information to achieve the organization's chosen value proposition and maximize profitability.
Level 1 Demonstrates introductory understanding, directing people to the appropriate source for further information.
BEHAVIORS
- Explains the cost and pricing structure of a given organization and its products/services.
- Describes the available tools for systems documentation, sales administration, and analysis.
- Explains the sales development life cycle, its components, and the functional specialist role in the process.
QUESTIONS
- Tell me about a situation where you generated financial reports.
Probing Questions
* What was the situation?
* What did you need to do?
* How did you prepare the reports?
* What was the outcome?
- Tell me about a time where you had to analyze financial information.
Probing Questions
* Why was the analysis important?
* What process did you go through to address the issue?
* Who used the information?
* What were the results?
Level 2 Applies the competency in common situations that present limited difficulties, working with a moderate level of guidance.
BEHAVIORS
- Describes how revenue management systems support the organization’s value propositions.
- Uses the tools for sales documentation and analysis tools (e.g. document flow diagrams, process flow diagrams, process flowcharts, etc.).
- Explains how costing and pricing can support organizational objectives
- Describes various methods of calculating product and service costs (e.g. ABC, job costing, process costing, direct and absorption costing, etc.).
QUESTIONS
- Tell me about a situation where you used more than one method to calculate product and service costs.
Probing Questions
* What was the situation?
* What did you need to do?
* How did you calculate the costs?
* How did you validate them?
Level 3 Applies the competency in the full range of typical situations, requiring guidance in only the most complex or new situations.
BEHAVIORS
- Identifies business issues and opportunities by analyzing financial and non-financial data at the transaction level in the organization.
- Achieves revenue management goals within own department or functional area.
- Performs profitability analyses, and makes recommendations to support short- and long-term decisions (e.g. break-even, relevant cost, contribution margin, linear programming, etc.).
QUESTIONS
- Can you tell me about a time when you’ve had to reduce expenditure to operate within a constrained financial climate?
Probing Questions
* What was the need?
* Why did you think it was so worthwhile?
* What was the result of your efforts?
* What did you learn?
- Give an example of a time when you spotted a good business opportunity.
Probing Questions
* What was this opportunity?
* Why did you think it was so worthwhile?
* What was the result of your efforts?
* What did you learn?
- Tell me about a time when you have made some cost savings in the past.
Probing Questions
* How did you choose where to make savings?
* How much money do you think you saved?
* What was the result of your efforts?
* What did you learn?
Level 4 Applies the competency in new or complex situations and advises others.
BEHAVIORS
- Evaluates organizational profitability management processes to ensure related operational activities support business objectives and value proposition.
- Establishes information requirements for decision making with respect to revenue management and sales management.
- Designs revenue tracking and sales reporting systems.
- Determines profit targets and profit management plans to control and monitor costs and revenues needed to achieve profitability goals.
QUESTIONS
- Tell me what steps you took to determine profit targets and develop profit management plans to effectively control and monitor costs and revenues to achieve profitability goals.
Probing Questions
* Describe the situation and your role.
* What approach did you take?
* Which stakeholders were involved?
* What was the result of your efforts?
- Describe some examples of strategic planning and budgeting that you have undertaken in previous roles.
Probing Questions
* What is the largest budget you have managed?
* How do you determine priorities if the allocation of resources is insufficient to carry out all functions in your area of management responsibility?
* How did you communicate it?
* What was the final outcome of the implementation?
Level 5 Develops new approaches and methods in the area. Is recognized as an expert within the organization.
BEHAVIORS
- Evaluates the value proposition using results of revenue analyses, profitability analysis, and external benchmarks.
- Develops policies, processes and controls that govern profitable decision making.
- Aligns the roles of stakeholders (pricing, sales, and marketing) with profitability goals.
- Establishes profit management plans.
QUESTIONS
- Describe how you have brought about business change through the use of technology and process re-engineering, describing what particular techniques you have employed, e.g. 6 sigmas, lean management, etc.
Probing Questions
* Describe the situation and your role.
* What approach did you take?
* How did you overcome resistance?
* What was the result of your efforts?
- Discuss the process you used to establish profit management plans.
Probing Questions
* Describe the situation and your role.
* What approach did you take?
* Which stakeholders were involved?
* What was the result of your efforts?