IDT Energy CEO Geoffrey Rochwarger recently wrote an article discussing cost-cutting and creating real value in companies.
He explained: “For many U.S. businesses, one story has played out repeatedly over the last several years: lower revenue and higher earnings. Investors may cheer the short-term results, but it’s unsustainable over the long run. Eventually, the cost-cutting must end and value must be created.
“Managers must evolve their business plans to meet customers’ changing needs. Every business, if it wants to grow, needs to identify how customers’ behaviors change and how this creates new markets—large and niche—that are as yet untapped. This goes for companies large and small,” he continued. “It is crucial for businesses to understand how they can leverage their customer’s additional needs to produce new revenue streams. This can be done in many ways. It may mean offering more services, tailoring existing services to further serve customers’ needs, or adjusting pricing tiers in a way that makes the product or service better for customers while augmenting the business’ earnings potential.”