Ten Key Steps to Implement for Optimized Revenue Growth Management

Predicting consumer behaviour plays a huge role in a business's overall success and generating revenue. The prediction can help companies develop an effective marketing strategy, be it brand preference, consumption mode, shopping frequency, or media engagement.

Knowledge of predictive customer behaviour and how to apply this in marketing have always been essential. But post-pandemic, there has been a shift in consumer behaviour.

According to a recent World Bank analysis, companies' sales dropped 27% from pre-pandemic levels during the pandemic. The survey was conducted with more than 120,000 firms in more than 60 countries.

This dip in sales was primarily due to a disruption in the supply chain and changing customer behaviour. The predictable customer behaviour that promoted brand growth and generated more significant revenue soon took a different turn as customers became more comfortable with online purchases.

Businesses witnessed periods of loss and are slowly re-writing the strategy to recover. This has contributed to the growth and change in revenue growth management (RGM) practice.

What is Revenue Growth Management?

According to McKinsey & Company, revenue growth management is the "adoption of different strategies around assortment, promotions, trade management and pricing to influence sustainable and profitable growth from the consumer base."

Although RGM is familiar, most companies still use outdated strategies. Traditionally, RGM strategies focused on price optimisation. Price optimisation seeks to identify the best price to attract buyers, promote sales, and maximise profits. However, with the introduction of advanced technology, changes in consumer behaviour, and the constant shift in marketing scenarios, it has become essential to develop strategic planning.

While the revenue growth management strategy can benefit all industries, it has been traditionally used by the hotel and airline industries. The consumer-packaged goods (CPG) industry also benefits from a revenue growth strategy.

Steps For Successful Implementation of Revenue Growth Management

Modern RGM strategy should be based on the concept that not all customers are equal. Given the rapidly changing scenario, retailers' and manufacturers' opportunities constantly evolve.

In these uncertain times, a proper strategy is all it takes to manage revenue growth in business. Mastering and executing a revenue strategy starts with a plan. Our team at Growth Jockey has come up with some strategies for successful implementation of revenue growth management.

Let's look at the key steps that can help you create growth in business and boost revenue by developing an effective strategy for revenue growth management in India.

1. Assess the Market

The first and foremost step before you start planning or forming any strategy is understanding the market well. Most marketers who need more management skills in revenue do not invest in understanding the market, resulting in failed strategies.

Where is the demand coming from?
How are consumers reacting to the new product?
Are there any upcoming changes that might affect the market?
What are the local factors influencing the market growth?

To form a successful strategy, it is imperative to have answers to these questions and be aware of the needs and expectations of the consumers.

At Growth Jockey, we help businesses assess the market with advanced technology and AI. While assessing the market, we check the existing competition. This knowledge can assist in launching new products into the market, designing effective marketing strategies, and influencing pricing and discounts of products.

2. Segment Customer Base

Segmenting customers based on their demographics, shopping patterns, geography, and other characteristics can help the company define their target audience. This is particularly important in the digital space when customers spend a considerable time online, and companies can utilise this to their advantage.

Segmenting the customer base can help companies better identify the needs of customers, their preferred mode of shopping, and other preferences giving the company an edge over competitors.

3. Price Optimisation

Price optimisation is analysing customer and market data to determine the best price for a product or service. What customers think about a specific product, its popularity, the quality, all these factors are taken to set a fair price for products. This will prevent fluctuation in price, allowing customers to enjoy stability.

For instance, a bath and beauty brand may assess the popularity of a particular product from their brand on a third-party website, the demand for the product, whether purchase increases during sales, etc. Depending upon these factors, they will set the pricing for similar products in the same category.

4. Collaborate With Other Departments

It is essential to be in sync with other departments. Even if you are in revenue management, the activities of different departments are okay with you. Identify and enlist key departmental decision-makers. Notably, the sales and marketing team must closely work with the revenue management team. Try to comprehend and address issues collectively to maintain consistency.

5. Using Artificial Intelligence (AI)

AI provides real-time insights, one of the most critical factors driving the need to adopt a new strategy for RGM. From different customer insights to tracking price ranges and marketing trends, AI can change your management strategy for revenue growth.

AI helps gather the correct data set by noticing patterns and trending insights. It can monitor the impact of price changes, the effectiveness of discounts, and actions taken by visitors and show suitable ads based on customer segments.

By generating these data, the company can focus more on the channels or the customers that are more active and generating revenue.

According to a study by Boston Consulting Group, automating pricing rules by revenue management with AI can increase revenues by up to 5% in less than nine months.

6. Set Revenue Goals

While planning a strategy, it is essential to set goals for revenue generation. This should be realistic and based on your company's generated revenue in the last quarter. How will you monitor if you still need to set goals if the new strategy is driving results?

As they can be measured and tracked after a specific time, the revenue generated can reveal if the strategies adopted need to be revised. Every company should have a target revenue when developing a new growth strategy.

7. Revamp Marketing Plans

Revise marketing plans based on customer preferences. The goal is to reach where your customers are. Launch targeted advertising with the insights you gather about your target audience. This allows you to market your products to individuals you know are interested.

With advanced planning and strategy, targeted marketing can save company resources and generate new revenue.

8. Focus on Mobile Optimisation

Research has concluded that a mobile-optimised website can give 30% more sales to a company, thus making mobile one of the most important revenue streams.

A slow mobile experience can drive your consumers away, so proper mobile optimisation ensures that mobile face users can easily connect to your website and enjoy a smooth experience.

9. Strengthen Operational Relationship

There should be a continuous supply of products to ensure products are always in stock. During the pandemic, there was a disruption in the supply chain as most companies and factories were forced to shut down on short notice.

They will likely understand these problems during crisis situations if you have a loyal customer base. But new customers will quickly move to other brands if they find a product is out of stock.

10. Work with a Revenue Growth Manager

Reid Hoffman, the co-founder of LinkedIn, believes, "No matter how brilliant your mind or strategy if you're playing a solo game, you'll always lose out to a team." This is true because collaboration allows you to get expert insights.

Consider hiring a revenue growth manager who can draw up the strategy with his experience, knowledge, and expertise. If you are wondering how to track the revenue growth of your business, a revenue growth manager will provide the best guidance.

Growth Jockey can help drive revenue growth by identifying the company's progress and all activities.

Let's Start Planning

After all the research, planning, and setting goals, it is time to implement them. Companies can see results and reap benefits within a few weeks of implementing basic revenue growth management strategies.

While managing revenue growth in start-ups, initially, they will be required to constantly analyse the market, re-evaluate the price and track the process to get the best results.

Experts at Growth Jockey use the most advanced techniques to study the market and analyse competitors. We adopt artificial intelligence and machine learning to create models to generate real-time insights. Using these insights, we draw the strategies for revenue growth management in India and help companies to grow. If you are looking for an answer to how to manage revenue growth, look no further !

Get in touch with us today to scale your business by attaining perfection in your revenue growth management !