The data driven capabilities of the GreatVines beverage selling platform support one of the five top growth strategies Forbes magazine recommends for consumer products groups. You’ve heard us talk at length about selling using leading indicators instead of lagging ones. Kavita Sahai of the Forbes Coaches Council gives a name to this strategy – Revenue Growth Management (RGM). RGM leverages data in ways a sales organization could never have harnessed prior to the application of software to consumer product marketing endeavors. Here’s how it works.
Sahai says, “Gone are the days of making a decision based on a gut feeling, especially when it comes to your four Ps: product, price, place and promotion. While there’s still a human component to decision making in CPG, there is a ton of data CPG companies can collect and purchase to help them make decisions.”
Traditional practices relied on reacting to information on what has already happened, which include depletions, sales to retail and sell through scan data. RGM leverages historical data to predict what would happen in response to adjustments to price, promotional strategy and other retail execution activity. Analyzing these leading indicators of sales are what deliver the insights CPG companies need to strategically grow their businesses.
There are challenges with leveraging an RGM strategy including poor access to the data due to high cost or lack of resources.
- Cost of the data – Small companies can’t afford to acquire this data and even if they did, it would be burdensome to manage due to lack of resources.
- No access to other critical leading indicators such as “sales activities executed at retail”, “programming with distributors” (or promotional agency partners).
Some examples to consider:
If a key strategy and leading indicator for your brand includes being featured on cocktail menus in steakhouses, how will you successfully execute this activity and measure the results?
Or, if you think having product placement in the coldbox is a sales driver for your brand, how will you plan, execute and measure the performance?
This is where GreatVines comes in.
Using a solution like GreatVines to facilitate the centralized planning, execution and measurement of leading indicators while integrating lagging indicators (like sales data) is truly a powerful solution for managing and optimizing RGM. A supplier or distributor can apply Big Data style analytics to any 4P’s strategy and understand the net results and ramifications to optimize their retail sales performance. The data can even be analyzed to model changes a competitor may make to their strategy in markets where you’re competing for the same share.
Sahai notes, “With a powerful RGM tool, a company can predict what will happen when its product is more likely to be purchased with a certain promotion, and many other factors. It results in not only adjusting price and promotion more but also in increased margins. A CPG company that can effectively utilize an RGM tool can see up to a 5% increase in margin.”
Are you ready to embrace the power and advantage of Big Data style execution in your beverage selling operations? Schedule a consultation today.