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Are you in CPG? Here’s how you can bring your revenue growth management strategy to life

Why a revenue growth management strategy? 


In the competitive landscape of the consumer-packaged goods (CPG) industry, a well-defined revenue growth management strategy is essential for driving sustainable growth and enhancing profitability. However, achieving organic growth has long been a persistent challenge for CPG companies. Siloed approaches and misaligned priorities across sales, marketing, and finance further complicate matters, leading to conflicting strategies and suboptimal decisions. To address these obstacles, CPG companies can adopt revenue growth management (RGM).  

RGM is a strategic approach that leverages data-driven insights to optimize pricing, promotions, trade spend, assortment, and price-pack architecture. This structured approach enables companies to identify and capitalize on revenue growth opportunities. It ensures that every decision contributes to the bottom line. 

However, one of the biggest challenges companies face is translating this strategy into actionable, measurable goals. Bridging the gap between overarching revenue growth objectives and practical, day-to-day sales actions is crucial for driving performance and accountability. This involves not only setting clear targets but also ensuring that every team member understands their role in achieving these goals. 

Translating your revenue growth management strategy into action 


Translating a revenue growth management strategy into actionable steps is crucial for achieving tangible results. RGM impacts various aspects of CPG business operations, including account negotiations, promotions, and pricing. By aligning these elements with the overall strategy, companies can drive cross-functional success and ensure that their efforts are focused on activities that contribute to revenue objectives. 

One effective way to translate a revenue growth management strategy into action is by aligning sales incentives with RGM objectives. By tying sales incentives directly to these objectives, organizations can motivate their sales teams to concentrate on activities that drive revenue growth. This alignment ensures that every action taken by the sales team is in sync with the company’s strategic goals, fostering a culture of accountability and performance. Education and development programs for sales teams should also be in place to further reinforce correct understanding and behaviors. This will counteract a return to short-term tactics and help strategic RGM actions to take hold. 

Additionally, an RGM strategy influences how companies approach account negotiations and promotions. Manufacturers should engage in ongoing, growth-focused dialogues with retailers, emphasizing how collaborative efforts can drive sales and margins for both parties. By leveraging data-driven insights, businesses can optimize their pricing strategies and promotional activities to maximize revenue and achieve win-win outcomes. This involves setting clear, data-driven revenue goals for specific customer segments and ensuring effective communication and collaboration between sales and marketing teams to execute the plan efficiently. 

Key components of an effective CPG RGM strategy 

5 key components of an effective CPG Revenue Growth Management strategy illustration

An effective revenue growth management strategy hinges on several key components. These elements work together to drive steady revenue growth and enhance profitability. 

First and foremost, leveraging data analytics for informed decision-making is crucial. By analyzing all available data, companies can gain valuable insights into consumer behavior, market trends, and competitive dynamics. This information enables businesses to make strategic decisions that optimize promotions, pricing, and product placement. 

Implementing robust pricing strategies and optimizing promotions is another critical component. Robust pricing strategies take into account expected cost of goods sold (COGS) trends, assortment pricing, and retailer margin potential, allowing companies to set prices that are competitive and sustainable. Promotion optimization, on the other hand, focuses on identifying the best promotional mechanisms for retailers. This ensures that marketing efforts are aligned with retailer needs and maximizes the return on investment. 

Efficiently managing trade spend is also essential. Trade spend, which includes discounts, allowances, and promotional expenses, represents a significant portion of a CPG company’s budget. By optimizing trade spend, companies can ensure that their promotional activities are cost-effective and aligned with their overall revenue growth objectives. 

Lastly, segmenting customers based on their market positioning and shopper behaviors is vital. By categorizing channels and sales accounts according to factors such as location, shopper demographics, and purchasing patterns, companies can tailor their marketing and sales strategies to better meet the needs of each segment. This targeted approach not only strengthens retailer relations but also drives higher sales and profitability. 

Together, these components are essential pillars of a robust RGM strategy that empowers CPG companies to achieve their revenue growth goals. 

Implementing a revenue growth management strategy to achieve sales targets 


Translating a revenue growth management strategy into actionable steps is essential for achieving sales targets. This process involves setting clear, data-driven revenue goals for specific customer segments and aligning trade promotion strategies with those targets. By doing so, companies can ensure that their efforts are focused on high-impact activities that directly contribute to revenue growth. 

To begin with, it’s crucial to establish well-defined revenue goals based on comprehensive data analysis. This includes understanding market trends, consumer behaviors, and competitive dynamics. By leveraging these insights, companies can set realistic and achievable sales targets for different channels and sales accounts. These targets should be specific, measurable, and aligned with the overall RGM strategy. 

Next, aligning promotional strategies with revenue goals is key. This involves designing shelf-based or digital promotions that not only attract customers but also drive sales in line with the set targets. For example, targeted discounts, special offers, and loyalty programs can be tailored to specific sales accounts or customer segments to maximize their impact. It’s important to continuously monitor the effectiveness of these promotions. And to adjust them as needed to ensure they are contributing to the desired revenue outcomes. 

Effective communication and collaboration between finance, sales and marketing teams are also vital. These teams need to work together to execute the RGM strategy efficiently. This includes sharing insights, coordinating efforts, and ensuring that everyone is aligned with common goals. Regular meetings and updates can help keep everyone on the same page and address any challenges that may arise. 

Additionally, leveraging technology and tools can significantly enhance the implementation of an RGM strategy. Advanced analytics, AI-driven insights, and automated processes can provide near-real-time visibility into performance and help identify areas for improvement. By utilizing these tools, companies can make data-driven decisions and optimize their strategies for better results. 

In summary, implementing an RGM strategy to achieve sales targets involves setting clear, data-driven goals, aligning promotional strategies, fostering collaboration between teams, and leveraging technology. This structured approach enables companies to focus on high-impact activities that drive revenue growth and achieve their sales objectives. 

“80% of RGM leaders believe they do not have the capability to implement precision RGM, mainly driven by data issues, lack of resources, and skill shortage”The strategic operating model, strategy&, part of the PwC network

How Visualfabriq supports your RGM strategy 

How Visualfabriq enhances your Revenue growth management strategy illustration

Visualfabriq plays a pivotal role in supporting and enhancing CPG revenue growth management strategies. By leveraging advanced technology and data-driven insights, Visualfabriq helps consumer goods companies optimize their pricing, promotions, and trade spend to drive sustainable revenue growth. 

One of the ways Visualfabriq supports key levers of RGM is through its comprehensive data analytics capabilities. The platform integrates and harmonizes all internal and external data sources, creating a single source of truth. This holistic view enables commercial leaders and finance teams to gain a complete outlook on their profit and loss (P&L) from both volume and value perspectives. With accurate, AI-enhanced predictions and continuous visibility on performance drivers, companies can make informed decisions that align with their RGM objectives. 

Visualfabriq also excels in implementing robust pricing strategies and optimizing promotions. The software enables companies to set prices that consider expected cost of goods sold (COGS) trends, assortment pricing, and retailer margin potential. This ensures that pricing strategies remain competitive and sustainable, maximizing revenue. One particular strength of Visualfabriq is its ability to ‘optimize as you plan’. The software suggests alternative promotion mechanisms and scenarios, predicting outcomes to help companies make informed decisions. This feature ensures that promotional efforts are aligned with retailer needs and maximize the return on investment.  

Effective trade spend management is another area where Visualfabriq shines. The platform provides tools to monitor and optimize trade spend, ensuring that promotional activities are cost-effective and aligned with overall revenue growth goals. By managing trade spend efficiently, companies can maximize the return on their promotional investments

In summary, Visualfabriq empowers CPG companies to implement and execute their RGM strategies effectively. By providing advanced analytics, robust pricing strategies, promotion optimization, and efficient trade spend management, Visualfabriq helps businesses navigate market complexities and achieve their revenue growth objectives. 

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Maximizing relationships through data and analytics 


In today’s data-driven world, leveraging analytics is essential for maximizing relationships with retail partners and driving revenue growth. By proactively using data, companies can make informed adjustments to promotions and pricing, ensuring their strategies remain effective and aligned with market dynamics. 

Continuously monitoring sales data, market trends, and shopper behaviors allows businesses to identify opportunities for optimization. This approach enables companies to respond quickly to market changes, keeping their promotions and pricing competitive and effective. 

Predictive analytics also plays a crucial role in guiding retail-specific strategies. By analyzing historical data and identifying patterns, predictive analytics can forecast future trends and behaviors. This enables companies to anticipate market changes and adjust their strategies accordingly. For example, predictive analytics can help identify which products are likely to perform well in specific retail outlets, allowing companies to tailor their marketing and sales efforts to maximize impact. 

Furthermore, predictive analytics can guide retail-specific strategies by providing insights into shopper behaviors and preferences. By leveraging these insights, companies can develop optimized promotional mechanisms that align with retailer needs. This approach ensures that promotional efforts are effective and tailored to the retailer’s context, ultimately driving higher sales and profitability.  

In summary, leveraging data and analytics is essential for maximizing relationships with retail partners and driving revenue growth. By making proactive adjustments in promotions and pricing and using predictive analytics to guide retail-specific strategies, companies can ensure that their efforts are aligned with market dynamics and consumer preferences. 

RGM strategy: key takeaways 


In summary, an aligned revenue growth management strategy is essential for empowering sales teams to achieve profitable growth. By leveraging data-driven insights, optimizing pricing and promotions, and efficiently managing trade spend, companies can ensure that their efforts are focused on high-impact activities that drive long-term revenue and margins. Aligning sales incentives with RGM objectives fosters a culture of accountability and performance. This ensures that every action taken by the sales team contributes to the company’s strategic goals. 

Visualfabriq plays a crucial role in enhancing the effectiveness of an RGM strategy. With its advanced analytics, strategic price setting, trade promotion optimization, efficient trade spend management, and sales account segmentation capabilities, Visualfabriq provides the tools and insights needed to navigate market complexities and achieve revenue growth objectives. By integrating and harmonizing data from various sources, Visualfabriq creates a single source of truth that enables informed decision-making and continuous visibility into performance drivers. 

In conclusion, a well-implemented RGM strategy, supported by Visualfabriq’s innovative solutions, empowers CPG companies to actively shape their commercial future.  

Want to learn more about Visualfabriq’s AI-powered software and how it revolutionizes the world of CPGs? Schedule a personalized demo