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Saturday, February 22, 2025

3 Ways To Increase SME Profitability With Revenue Growth Management


Revenue growth management is the key to driving profitability for your SME. RGM focuses on optimising all aspects of your business operations, from pricing to forecasting to inventory management.

As a versatile tool that can be applied across a number of different sectors, a strong RGM strategy not only increases sales volume but also drives a sustainable growth plan for your SME business.

As we dive into the benefits of revenue growth management as a key strategic tool, let’s take a closer look at three ways RGM could increase your profitability in 2025.

The Power of Cognitive Technology

RGM strategies are driven by cognitive technology. In order to leverage data effectively for precise forecasting, a powerful RGM strategy should be supported by an agile cognitive framework and a smart set of data-driven tools.

Cognitive technology will play a large role in the future of RGM. Not only can CPGs beneficially enhance the profitability of RGM, but CPGs remain one step ahead of AI, with the ability to capture a large range of data from multiple sources and deliver results parallelling human expertise.

Cognitive computing v AI

(Image Source: TechTarget)

 

This type of software can leverage advanced analytics, which sits at the heart of a strong RGM strategy. The future of revenue growth management will consist of leaning on cognitive technology to analyse pricing models, gain insights into subscription metrics and forecast revenue figures.

The question is, which areas of your SME will see the most profitability from the integration of RGM technology?

Revenue Forecasting

Revenue growth management can contribute to accurate and profitable revenue forecasting.

Using RGM technology to leverage historical data, CPG systems can grab insights on performance data, historical revenue streams, subscription data and more to deliver accurate revenue forecasting and improve future business performance.

With the ability to predict which areas of your business are most likely to provide the highest streams of revenue going forward, business leaders can allocate resources to these areas ahead of time and enhance their profitability.

Market Research

Revenue growth management CPGs are also well-equipped to gather detailed insights on the industry and market trends responsible for future revenue streams.

With the ability to gather data on current competitor pricing, historical consumer behaviour, and emerging trends within the sector, a strong RGM strategy can help businesses identify what customers are currently buying and why.

These insights can be used to craft new product lines and promotional opportunities for a chance to approach the market with profitable success.

Operational Efficiency

Operational profitability is also a large benefit associated with introducing an RGM strategy into your business.

RGM CPGs are able to track inventory levels with ease and help business employees predict on-shelf availability in real-time.

Not only does this offer a great deal of insight into a business’s current distribution efficiency, but it can also forecast what demand could look like in the future based on inventory trends throughout the seasons.

Consider leading POS systems that allow CPG integration. Not only is POS data invaluable when tracking inventory trends, but with the ability to capture purchase data in real time, a business can identify peaks in product demand and any emerging purchase shifts ahead of time.

This drives a business to optimise its supply chain ahead of busy periods to ensure that stock levels are high for a large influx of customers. Avoiding the sell-out stage is an easy way to ensure profitability during peak seasons.

The Future Of Revenue Growth Management

The future of RGM strategies will rely heavily on the evolution of cognitive technology and AI.

The next generation of RGM capabilities will be driven by agile decision-making, data tracking, precision to predict growth for hyper-personalised campaigns, and embedded data collection, allowing CPGs to collect insights in real-time.

RGM capabilities

(Image Source: PWC)

 

Revenue growth management is an essential tool used by SME business owners all across the globe. As technology gets smarter, the ability to forecast accurate revenue trends will help business leaders secure profitable outcomes in 2025 and beyond.

According to experts at McKinsey, “advanced capabilities in pricing, promotions, assortment, and trade investment will only increase in importance as competition intensifies in the CPG industry.”

As we step into a new era of AI-powered business, the road to turning a profit will become more competitive. However, those who rely on targeting historical, consumer and market data to secure revenue growth.

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