While Trade Promotion is essential to CPGs, it’s still mostly focused on short-term results.
Revenue Growth Management (RGM), on the other hand, is centered around the long-term growth and health of your company. That’s why we decided to dedicate this blog to discussing the positive impacts RGM can have on your Trade Promotion decisions.
First, let’s acknowledge something:
There’s a lot to juggle while running a CPG. In addition to revenue growth, you have to maintain sustainable margins and manage operations. It can get to be so much that in-depth trade promotion strategy feels like it needs to take a backseat; that your sole priority has to be keeping the ship upright in an unpredictable sea of competition and shifting consumer trends.
That couldn’t be further from the truth. When competition is stiff, data and strategy are integral to success. That’s what makes leveraging innovative technologies, like artificial intelligence and machine learning, so important in the CPG world. It’s also why RGM teams need tools that spur meaningful, memorable, and successful consumer-centric trade promotions. For example:
- An AI/ML-powered RGM team can help your Sales team determine where products should be sold during promotions. It can also help price those products, depending on sales time and location.
- Additionally, a tech-enabled RGM department can guide your Marketing team on how to tailor its messaging during promotional periods. They will be able to address both specific consumption occasions as well as target niche customer groups.
From unifying and refining data to offering real-time recommendations and the opportunity to “hyper-personalize” messaging, AI/ML in Revenue Growth Management is without a doubt the next frontier in predictive trade promotion strategy, assisting your team with analyzing sales data, studying the competition, simplifying processes, and providing actionable suggestions.
The best part? With AI/ML at their fingertips, your RGM team will do more than just improve trade promotion. They can optimize pricing, detect problematic customers, and monitor all your Key Performance Indicators (KPIs).
The data shows that giving your Revenue Growth Management team access to artificial intelligence and machine learning will add immense value to your operations and strategy, for the short-and long-term.
Contact us today to discuss how Wise Athena can help take your Trade
Promotion to the next level.
- One 2019 article from McKinsey noted that “After implementing strategic RGM, the company reversed its downward trajectory and is on track for a 10 percent revenue increase over three years.”
- In a 2020 study, Boston Consulting Group gave an example of a CPG that was able to use RGM in targeted selling programs, sales channel optimization, sales force activation, and pricing optimization. They ultimately achieved 12 percent compounded annual growth and doubled market capitalization over five years.
- Deloitte adds in this PDF presentation that “…modern-era revenue management capability can generate benefits equal to 3 to 5% of gross profit, while creating value for retailers and consumers.
The data shows that giving your Revenue Growth Management team access to artificial intelligence and machine learning will add immense value to your operations and strategy, for the short-and long-term.
Contact us today to discuss how Wise Athena can help take your Trade Promotion to the next level.
From unifying and refining data to offering real-time recommendations and the opportunity to “hyper-personalize” messaging, AI/ML in Revenue Growth Management is without a doubt the next frontier in predictive trade promotion strategy.
