4 Ways (not) to fail with Revenue Growth Management

Revenue Management is just for the RM team

Revenue management is your core business. It requires to be led by senior leadership and needs to be supported by all main functions of a company. Just like an empty hotel room or a half-filled passenger plane for those industries, missing out on a shopping trip can’t be reversed and is inefficient use of your business platform. 

It is all about increasing prices

Contrary to common believe, the biggest wins do not come from raising prices. While price adjustments may be a quick initial win for established brands, they also risk to alienate more shoppers in increasingly commoditized categories with hard discounters and private labels simply winning volume share faster.

Ignore why a shopper is shopping here and now

For decades companies have segmented shoppers with different brands, propositions and price points. Targeting different shopping occasions is, surprisingly, still relatively new to some companies. Replenishment shopping in a hypermarket needs a different offer vs fill-in shopping in a convenience store.  Some retailer and suppliers are still offering a one size fits all pricing and promo offer and by doing so are leaving money on the table.

Ignore that shoppers switch between brands and stores

Some shoppers happily switch to a new product, a bigger pack size or a store with a big promotion. Others remain remarkably loyal. Targeting differentiated shopping behaviour is the main price of any revenue growth strategy.  Currently very few companies have developed RGM programs that target shopping behaviour.

For more ways (not) to fail with RGM, please click here.