Revenue is not a number. It is a composition.
A restaurant added a delivery channel and its revenue went up every month. It was losing money on almost every order that came through it, and nothing on any report said so.
Nothing sold less.
Every revenue figure is a blend of channels, products and customers carrying different margins. The top line reports the total while the blend moves underneath it. A business can add units, add revenue, and lose money on every marginal unit, because everything on the surface counts units.
It is not corrected because nobody is paid to correct it. The platform is paid on orders. Staff are paid on hours, which rise with orders. The rep is paid on revenue booked. Margin is the only number in the business with no owner and no incentive attached to it.
What is in it- Four instruments that make a composition visible behind a single total
- Why two operators with identical menus, wages and prices carry different margins
- What research on nearly eight thousand enterprise software deals shows about any number people are paid against
- Why the measurement aphorism everyone attributes to Drucker is not his, and who actually said the other one
- A page listing what was cut during the writing, and why
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