Revenue Growth Management What Is

To calculate revenue growth as a percentage you subtract the previous period s revenue from the current period s revenue and then divide that number by the previous period s revenue.

Revenue growth management what is. Revenue management is the application of disciplined analytics that predict consumer behaviour at the micro market levels and optimize product availability and price to maximize revenue growth. Tim morningstar a partner with bain s consumer products practice outlines five principles that if adhered to properly can help companies deliver lasting results. While that development has allowed cpgs to reliably capture value the landscape has shifted and the bar is rising. It is used to measure how fast a business is expanding.

Revenue growth management term has been gaining popularity in recent years and some of the biggest companies have introduced it with great results. The primary aim of revenue management is selling the right product to the right customer at the right time for the right price and with the right pack. It can be calculated year over year quarter over quarter or by comparing the current quarter with the same quarter last year. A definition of revenue growth with example calculation.

More valuable than a snapshot of revenue revenue growth helps investors identify trends in order to gauge revenue growth over time. In a nutshell it s all about using analytics to predict consumer behavior at the micro market levels to recognize all opportunities optimize price increase the effectiveness of promotions and. This is made possible by analyzing the entire portfolio promotional strategies the right mix of packages structural demand across markets demographics and consumer purchase patterns. How to design a cpg revenue growth management organization part 1 of 2 published on january 4 2017 january 4 2017 209 likes 14 comments.

Revenue growth illustrates sales increases decreases over time. If a company generated 75 billion in revenue. Revenue growth management rgm helps companies increase profit and margin by targeting shopping and consumption occasions. Over the past decade many consumer packaged goods cpg companies have mastered the fundamentals of pricing promotions assortment and trade investment revenue growth management s four main elements.

Revenue growth is the percentage increase in revenue between two periods of time. Revenue growth management is one of the most difficult capabilities for consumer product companies to master.