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Embedding RGM at scale:

A strategic advantage for modern Commercial Leaders

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Published on: June 2024

Written by: Teresa Yetano, Lisa Daley, Emily Steigerwald

In today’s fast-changing business environment, excelling in Revenue Growth Management (RGM) is essential for Commercial Leaders aiming to boost revenue and profit, both now and in the future.

Unlike traditional methods that confine RGM to pricing actions, forward-looking Commercial Leaders recognize that activating a holistic, end-to-end RGM strategy that is consumer/shopper focused and customer-back, leads to more significant growth and allows leaders and teams to not only anticipate, but actively influence consumer demand and customer needs.

Historically, Revenue Growth Management (RGM) has been approached as a temporary and reactionary project, which was typically led by external experts in response to inflationary markets. This limited approach confined the benefits to a small part of the business and focused on short-term results, rather than embedding RGM as an ongoing, fundamental aspect of business strategy that could deliver sustained, long-term growth.

Today, mature RGM organizations treat RGM strategy and execution much differently, positioning the actions at the center of their strategic operations, embedding capabilities deeply within their organizational processes and ways of working. This transformation is not just procedural but is a shift that forces RGM strategy, tactics, and mindset into every action and function of the business.

Strategic integration of RGM at scale: A roadmap for success

  1. Build strong in-house expertise: To see the scaled benefits of RGM, develop strong capabilities within your commercial teams and intermediate understanding of your cross-functional teams. When your leaders and teams fully grasp RGM tactics and mindsets, it creates scaled-impact that can be sustained without external reliance.
  2. Encourage cross-functional collaboration: The effectiveness of RGM strategy and execution is only fully realized when it involves a fully cross-functional team. Promoting collaboration between sales, marketing, finance, R&D, and the supply chain enriches insights, strategy and execution feasibility, and organizational success.
  3. Integrate RGM strategy into key business processes: By connecting RGM directly to critical operations such as budgeting and strategic planning, you ensure that RGM principles are woven into the fabric of annual planning instead of being treated as a one-time project. This integration influences everyday decisions and guides long-term business strategies.
  4. Overcome implementation challenges with effective change management: Embracing a robust RGM approach involves substantial change and a shift in traditional revenue growth mindsets. Address these challenges through strong change management practices, aligning team incentives with new strategies and providing clear, successful examples of RGM in action to inspire and motivate your teams.

The competitive edge of building RGM capability across the organization:

  1. Encouraging innovation from Consumer-Back: It’s no surprise that RGM should be activated starting with consumer and shopper insights. When truly building a strategy from the consumer-back, you build a mindset and process that is ripe for innovation. This helps your company stay competitive and lead industry trends and demands, instead of reacting.
  2. Aligned decision-making for the short and long-term: A thorough RGM strategy speeds up and improves the day-to-day decision-making process of consumer and customer facing commercial teams. It helps ensure that decisions—like setting pricing strategies, choosing promotional activities, or allocating resources—are aligned with the market’s immediate needs and long-term goals for the category.
  3. Boosting market responsiveness: In today’s volatile business climate, the ability to swiftly adapt to market changes is invaluable. Decentralizing RGM capabilities enables cross-functional local teams to be agile to market shifts in strategic ways, turning potential challenges into opportunities, while still staying aligned to the longer-term market objectives.
  4. Cultivate a results-driven culture: Building RGM roles across the organization allows for greater ownership and accountability to improve revenue and ultimately grow market share. This means a greater population has a direct role to play in driving business performance and are responsible for keeping an external pulse on consumers, shoppers, and customers.

Implementing a cohesive RGM strategy, instilling the right mindsets, and providing the leaders and teams with the tools and processes needed to be successful, is no small feat. However, the revenue, profit, and market share impact can be substantial when an aligned RGM strategy is deployed at scale. This strategic commitment positions your company for enduring success and a powerful competitive advantage in today’s dynamic consumer, shopper, and customer landscape.

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