Adding Predictive Elements to the Pillars of Revenue Growth Management
Having the right revenue growth management (RGM) solutions and strategies can help support CG brands and their commercial/cross-functional teams in a way that can show continuous improvement if done properly.
Simply solving for pricing, trade promotions and assortments doesn't cut it anymore. Now, CGs can add predictive elements to help them become more proactive to support better decision making. CGT caught up with Alfonso Vazquez, CEO and head of products for Wise Athena, in order to find out where CGs should start, and what they need to get the most out of their RGM investments.
CGT: What are the essential elements of an RGM technology toolbox for consumer goods companies?
CGs should have a predictive optimization solution that solves the 5 RGM pillars:
- Pricing
- Trade Promotion
- Demand Prediction
- Assortment
- Predictive information that supports the establishment of commercial and trade terms with retailers.
They need the ability to visualize the future impact of the decisions made today for each of the RGM pillars and the construction of different scenarios that optimize the decision making.
CGs should have an easy to operate RGM product that includes gross margin optimizations and predictions. And finally, evaluate the process of the established goals versus what was achieved.
CGT: How should CGs collaborate with RGM solutions providers to get the best results?
- Generating business questions relevant to the creation of value of the CG that allows having the appropriate optimization parameters when running in a predictive model.
- Challenging the supplier to have a continuous improvement process aimed at increasing the value of the CG.
- Support in the implementation of a predictive and strategic solution, seeking as an objective the adoption through the establishment of the processes of a digital transformation.
CGT: How can CGs assess whether they are getting full value from their RGM system/solutions — and how should they address any deficiencies?
Through a building-block vision, each module integrated in the predictive solution must be able to add an incremental volume/margin to the optimized scenario, and through a post-mortem analysis, it can have the ability to measure the level of achievement and the deviations from the optimized scenario versus the actual result obtained.
The deviations will be the indicative parameters of the need to adjust the predictive models in terms of adding information to ensure the learning of recent changes or to consider unprecedented actions in the same future within the model.
Trust in the accuracy of the predictions is vital. Demand from your RGM solution provider a software product, not a consulting ad hoc development that will not have as much quality assurance in their predictive models.
CGT: What are some best practices for scaling RGM solutions across a CG enterprise?
Have a clear definition of decision-making processes and how to measure the success of commercial management using a predictive solution.
Identify and acquire a reliable predictive tool that supports decision making with a high level of certainty.
Concentrate the relevant and necessary functions in RGM and delegate the generation of optimized scenarios that result in sustainable growth and effective market penetration actions.
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