Revenue Growth Management
Growing revenue faster than volume, that is what Revenue Growth Management (RGM) is about. Accuris provides the analytics to identify new revenue pools, through pricing opportunities, promotional efficiency and targeted pack strategies.
Companies have traditionally organised around brands, category and customers. Revenue Growth Management (RGM) unites these lenses and brings organisational focus to the basics: growing net revenue. Accuris enables RGM by showing how packs, pricing and promotions are optimised for each shopping trip and consumption occasion.
Why it matters
CG companies leave money on the table when offering the same to all shoppers. Adapting your pack, price and promo program to store formats and shopper types will generate higher value in often stable categories.
Your competitive advantage
Very few retailers evaluate the net impact on category revenue. With Accuris, you show to your customer exactly how a pack introduction cannibalises sales of other products and to what extent it adds revenue. Similarly a price change or a promotion is analysed in gross and net terms, splitting out brand switching and retail switching where relevant.
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Revenue growth indicator
Accuris reports the net revenue your brands and competitors have added to the category. Some of your activities have added revenue, whilst others may have destroyed it. The Revenue Growth indicator shows the balance, for you, your competitors and your retail customers.
The numerator is calculated as sales you have added to the category (thanks to promotions, new launches, price changes, increased distribution and above the line campaigns) as well as the upgrading of demand that would have taken place (e.g. sales from competitors you have attracted that sold at a higher pricethan their standard or promotional pricing).
The denominator is the sum of all missed sales and any downgrading of demand that your events have caused.
Examples of the benefits achieved with Accuris revenue optimisation
We advised our client to fight its competitor by introducing a large pack size and coerce the category toward bigger consumption sizes. The consumer liked it because she got a lower per Litre price. For the category it restored revenue growth as the absolute spend per transaction increased. And our client became the leader in volume.
Our client stopped promoting its large SKUs but lowered their permanent price. It reduced promotional subsidisation of loyal demand. The Revenue Growth index substantially improved as shopper downgrading was reduced. On an annualised basis, this policy change brought more than €10m sales back to the category.
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