The current dynamics in the CPG industry have led to a decade of decline in profitability. Changing purchasing behaviors, acceleration of digital transformation, and supply chain cost pressures have led to revenue growth management (RGM) being a top priority for the CPG industry. Between 2018 and 2023, 66% of companies that grew1 both revenue and profits had invested in RGM systems. Companies that do RGM well have seen a significant gross margin gain of up to 7%2.
For RGM to be truly effective and sustainable, it must be embedded in all aspects of an organization. Employed growth strategies must not only generate buy-in from internal teams across all relevant departments but also be fully scalable. In fact, those who invest in capability building at scale are 2.4 times more likely2 to capture and sustain value.
If you fail to scale, your RGM investment won’t reach its full potential. Efforts will likely end up as a one-time initiative led by a few senior executives, instead of embedded, resilient strategies with organization-wide access. If one of these leading executives were to leave the organization, key knowledge would be lost and efforts could stall.
A range of resilient processes must be in place to prepare internal teams for scalable revenue growth management.
To learn more about the core principles of effective RGM strategies and management, click here
To effectively scale an RGM program, it is crucial to prepare your teams by identifying skills, showcasing leadership commitment, promoting cross-functional collaboration, and ensuring clear change communications.
Establishing a current baseline of skills applicable to RGM is crucial. This insight will identify potential knowledge gaps, and enable CPGs to align the right goals with the right people across the organization.
Achieving team buy-in often comes from the top down. C-suite leaders who champion RGM should emphasize its strategic importance, helping increase internal support as a result.
As organization-wide implementation is key to fostering robust RGM, collaboration between multiple departments is essential to improve strategy alignment.
High-performing RGM teams will include members from finance, marketing and sales, with all having a voice and visibility.
From using RGM terminology in everyday conversations to providing regular updates, clear communication is one of the most effective methods of getting teams on board with new RGM strategies.
Picture this scene: a CPG company wants to increase their revenue. After equipping their teams accordingly and investing in RGM technology, they’ve been able to unearth a plethora of insights including current consumer demand and buying habits. They’ve used these insights to identify a real-time growth opportunity to introduce a new line of organic snack products.
After collaborating with their retail customers to optimize promotions and pricing, the team executes the plan without a hitch. The resulting sales increase is higher than their typical trade promotion plan and the company gains increased market share.
The company implemented revenue growth management software, which enabled them to uncover data-led insights. By focusing on insights that look at return on sales (ROS), price elasticity and promotional effectiveness, they were able to align decisions with exact revenue growth goals and consumer buying habits. The result? Better-informed commercial decisions that drive truly profitable outcomes.
Identifying the key drivers of growth that also preserve long-term sustainability and customer value can be challenging without the appropriate tools. A platform that offers real-time insights to maximize returns on investment can significantly enhance your RGM efforts. At Retail Insight, we've introduced RGMInsight, setting a new gold standard for tools that deliver actionable commercial insights to drive growth. This system enhances your planning cycle by capturing historical commercial outcomes and feeding them back into future planning, ensuring you make the most informed decisions to maximize returns.
The modular design of RGMInsight allows you to use a range of planning tools, providing a fully customized solution to meet your precise needs. From traditional trade promotion management to joint business planning and indirect trade planning, it even offers invoicing and claims handling workflows, with RGMInsight’s CPG solutions delivering game-changing levels of commercially-focused insight.
Discover more about how our RGMInsight solution can sustainably transform your revenue growth management.