RGM Evolution is a strategy that has been implemented by companies across many different industries. Over the years, innovative methods and tools have transformed Revenue Growth Management (RGM), going beyond the traditional way of periodically assessing progress, and today, the utilization of AI and Machine Learning has become a priority for CPG brands looking to improve their business operations.
In this article, we will take a closer look at the evolution of Revenue Growth Management and its various stages, from its inception in the 1970s to the present day.
- The 1970s: Revenue Growth Management first emerged in the airline industry. American Airlines was one of the first companies to adopt the approach, changing its ticket sales strategy after discovering that empty seats were primarily due to pricing
- The 1980s: The hotel industry recognized that their products shared similar characteristics with airlines, such as perishability, fixed capacity, and the need for customer segmentation based on price sensitivity.
- The 1990s-2000s: The CPG industry has created innovative methods and tools that have significantly transformed their approach to profit optimization and revenue growth, going beyond the traditional way of periodically assessing progress.
- The 2010s: More than 60% of revenue growth for the top 50 FMCGs in the world came from optimizing pricing, product mix, and promotion management, rather than from an increase in sales volume.
- The 2020s: The utilization of AI and Machine Learning has become a major priority for CPG brands, with about 43% of them prioritizing investments in these technologies to improve their business operations and drive revenue growth.
As the business landscape continues to evolve, companies need to stay ahead of the game. Marketeers’ Smart Value™ Platform is one example of how AI can be leveraged to achieve revenue growth and profit optimization.
Explore our integrated RGM platform now to discover how incorporating AI technologies into your RGM strategy can help your business stay ahead of the competition and achieve ongoing success in today’s fast-paced marketplace.