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Revenue management teams are becoming more and more advanced as a functional unit within FMCG organisations. 2018’s Acumen revenue management assessment (ARMA) surveyed our clients, and other companies in the FMCG space, to understand how they are progressing on the revenue management journey.
As a relatively new discipline within business, benchmarking is fairly uncommon, so we sought to get an idea of the varied level of procedures and processes from a wide range of businesses. Here we summarise our key outtakes:
Business-wide communication and understanding is strong
Revenue management functions have clocked on to the importance of clearly defining their role within the wider business, with only 18% claiming the function was little-known. Over 70% of respondents generate insights and setup capability building sessions with the broader business in order to raise awareness and understanding. Revenue managers think about the bigger picture – with respondents hot on keeping their pricing, promotion or mix opportunities strategically aligned to provide top down sponsorship to implement, with nearly 90% claiming they had this in place.
Over 80% of respondents are sharing insights generated by the revenue management function with the broader business and working with the them to generate solutions to the gaps identified - a similar proportion are even executing changes to the business. Overall, many revenue management functions are doing a good job of demonstrating their value internally.
Revenue management functions find change management to be the weakest link
The respondents were polarised regarding change management, with a 50/50 split regarding having a proper change management process in place. This suggests that revenue management functions are doing a great job of communicating across the business but struggle more when it comes to implementing change.
Teams aren’t fully satisfied with their systems – this could be due to a lack of proper change management
Only a third claimed that their systems provided them with the necessary information to enable effective revenue management, whereas the remaining respondents felt their systems did not provide them with the necessary information.
However, the clarity of promotional strategy within businesses who took our survey was varied. 9% were at the top – with an extremely clear promotional strategy. 45% of respondents felt their promotional strategy was unclear and needed work.
Teams plan and plan well – but optimisation & evaluation is infrequent
Results show that 87.5% set measurable goals and targets for their revenue management function, and nearly 80% of businesses have a clear roadmap laying out plans for the next 6, 12, and 24 months ahead. Furthermore, over 80% of businesses setup terminology and revenue reporting standards across the team.
When it comes to building an established promotional planning system, nearly all of candidates plan, implement and review, but far fewer (45%) take time to evaluate and optimise. This is likely due to a lack of visibility when it comes to clarity of product, brand, channel, customer and mix impact, where only a relatively small proportion felt confident.
External insight analysis is abundant but far less benchmark internally
The strongest response of all survey questions was around external insight analysis, with over 90% claiming to make use of external insights and research trends within the industry. However, only two thirds monitor the impact of the revenue management function activities against a set of clear assessment criteria and only 59% had an established revenue management competency framework. This indicates that far less businesses are setting internal objectives. and potentially run the risk of getting distracted by external trends.
Overall, we can conclude that results indicate a relatively strong and mature revenue management capability, yet the gaps can be found within areas of change management and internal benchmarking and objectives. Businesses would benefit from looking at their current capabilities and improving on them – looking for the gaps that exist, and setting targets based on these. Teams are also clearly in need of better revenue management systems to help implement the change they want to embed across the organisation.
The key takeaways:
Over 80% of revenue management teams share insight with the wider business
45% of teams do not have effective change management processes
25% of teams see their systems as ineffective at providing the necessary information to enable success
90% of revenue management functions utilise external insights and research trends within the industry