Establishing Revenue Growth Management as a Center of Excellence for Your Organization
Recent inflationary and supply pressures have forced consumer products companies to explore innovative strategies to drive sustainable growth and maximize profitability. One such strategy that has emerged as a game-changer is Revenue Growth Management (RGM). RGM is a holistic approach that goes beyond traditional revenue-focused strategies by encompassing a cross-functional data-focused mindset that emphasizes collaboration, integration, and coordination across various departments within an organization.
Companies must recognize that success with RGM isn’t limited to a single department or function, but rather requires a unified effort across their entire organization. By aligning sales, marketing, finance, supply chain, and other key functions, RGM unlocks a company’s full potential, creating a synchronized ecosystem that promotes agility, responsiveness, and adaptability in an ever-evolving market.
For organizations looking to maximize RGM across their organization, establishing RGM as a Center of Excellence (COE) is a great strategy. As a COE, RGM should be responsible for setting analytical standards and providing thought leadership and strategic guidance for all pricing, promotion, and assortment decisions. Below, we break down five functional areas – analytics, strategy, process, organization, and tools – and how RGM can be seen as a COE for their strategic decision-making:
Establishing RGM as a Center of Excellence in CPG
Analytics
- Facilitate the development of advanced analytics and data modeling to optimize decisions around pricing, market mix, price pack architecture, and promotion optimization
- Enable the necessary analytical personnel and resources to perform best-in-class analysis
- Work cross-functionally to identify analytical blind spots and ways to close them
Strategy
- Set analytical standards, define metrics and key performance indicators (KPIs), and provide thought leadership for all inputs to revenue
- Define price realization mindset to better optimize base, promotion, channel, and everyday low pricing (EDLP)
- Coordinate with Marketing and Product teams to build a growth strategy that includes assortment, marketing mix, and trade management
Process
- Own and facilitate ongoing and regular price realization analysis
- Facilitate strategic thinking around price, promotion, and assortment actions through regular knowledge and learning share
Organization
- Coordinate cross-functional price, promotion, and assortment realization efforts
- Ensure incentives are aligned across the organization to drive actions that benefit price realization, profitability, and healthy diversification of revenue inputs
Tools
- Own the management of all analytical systems related to pricing, promotion, and assortment analysis
- Oversee maintenance of all data inputs (baselines, historical, syndicated, and non-syndicated)
Clarkston Can Help
RGM can serve as a catalyst for success in consumer products companies by fostering a cross-functional approach that prioritizes collaboration, integration, and coordination. Institutionalizing RGM as a Center of Excellence may not work for every organization, but for many organizations, establishing RGM as a COE can offer a comprehensive framework that aligns all key functions and departments toward a common goal.
For guidance on RGM strategy, connect with one of our experts today with leading RGM in CPG expertise.