How to transform the performance of your revenue management team
Let’s face it, being an FMCG company in today’s market is tough.
FMCG companies face slowing top line growth, and increased competition from smaller ‘craft’ brands. There’s the ever-shifting retailer environment (take the latest potential buying alliance, Tesco-Carrefour) and the rise of the discounters and e-commerce channels. And let’s not forget the increasing promotion intensity putting more and more pressure on price. It’s no wonder that FMCG companies are finding it hard to deliver lasting profitable revenue growth.
Gone are the days of chasing volume, the savvy FMCG companies are turning more and more to Revenue Management techniques and functions to help them achieve their goals.
With the abundance of data and therefore insight available, the potential for revenue management teams to transform the performance of a business is huge. Effective revenue management functions are helping businesses to achieve better top and bottom line financial results, enabling more fact based, productive discussions with their customers and ultimately supporting long term growth.
But it’s not easy – and revenue management teams can face many challenges as they set out on their journey. At Acumen, we have developed our Revenue Management Best Practice Framework, to provide guidance to teams on where to focus to deliver lasting change.
The Acumen Revenue Management Framework:
Set the foundation
To start with, you need the right people, tools & processes in place and you need to be continually driving and maintaining capability. This is most effective at a local level, where revenue management teams know the ins and outs of their particular market. However, an effective ‘centre of excellence’ team can also play a role in facilitating the sharing of best practice across markets and providing guidelines and KPIs to follow.
Understand your drivers
Understanding your drivers is key to defining priority areas for teams to focus on. Your drivers consist of promotions, pricing & investments, and mix. Revenue managements teams need to understand which drivers are most relevant to their business, and establish current capability & performance against each driver.
Establish the opportunities
Once you understand your drivers and their status, you are in a position to establish where your opportunities lie. After a full situational analysis, your revenue management function can work cross functionally to generate ideas.
Deliver lasting change
Now you can put together your revenue management roadmap. Roadmap planning is crucial, considering resourcing, change planning & the measurement mechanisms. Delivery needs to be supported with effective project management, change management as well as stakeholder management. And last but by no means least, its vital to review your progress regularly – setting up top down revenue management metrics, initiative review forums & debriefs.
Where to start?
We fully recognise it can be a daunting task when you are first starting out, which is why we have developed the Acumen Revenue Management Assessment (ARMA). A light touch assessment to provide you with absolute clarity of the current capability & maturity of your Revenue Management function versus other companies, as well as providing you with a suggested roadmap to follow to improve. After conducting a series of stakeholder assessments & observation exercises, we will provide you with:
– An assessment of your capability against the Acumen Revenue Management Framework
– A set of opportunities to improve & suggested areas of focus for change
– A set of recommendations to take your Revenue Management function to the next level
– Suggested prioritisation of recommendations