What Is Revenue Growth Management? A CPG Leader's Guide

Revenue Growth Management Defined

Revenue Growth Management (RGM) is the discipline of using data and analytics to optimize three interconnected levers: pricing, trade promotion, and product/channel mix. The goal is profitable growth - not just top-line revenue expansion, but sustainable improvement in gross margin.

Originally pioneered by the largest global CPGs - Procter & Gamble, Unilever, Coca-Cola - RGM has evolved from an enterprise-only discipline into a critical capability for mid-market brands as well. The companies that mastered RGM during the inflationary period of 2022-2024 emerged with stronger margins. Those that didn't are now facing the consequences: elevated trade spend, compressed margins, and limited visibility into what's driving their P&L.

RGM isn't a software platform or a one-time project. It's an ongoing discipline that uses data to make better commercial decisions about price, promotion, and product mix.

The Three Pillars of RGM

Revenue Growth Management rests on three interdependent pillars. Strength in one can't compensate for weakness in another.

• Pricing Strategy - Understanding price elasticity by product, channel, and customer. Setting list prices that balance volume retention and margin improvement. Developing price pack architectures that give consumers options while protecting your most profitable SKUs. Pricing is the highest-leverage RGM lever because a 1% price improvement drops directly to margin.
• Trade Promotion Optimization - Measuring which promotions drive incremental profit versus which erode margin. Planning future promotional calendars based on historical evidence rather than habit. Understanding which events to repeat, renegotiate, or retire. Trade promotion is where most CPG brands have the largest untapped opportunity because it's the biggest cost they manage with the least analytical rigor.
• Mix Management - Optimizing which products go to which channels and customers. Shifting volume toward higher-margin SKUs and higher-velocity channels. Analyzing portfolio performance to identify products that are diluting overall margin. Mix management is often overlooked but can be a significant margin driver when approached systematically.

Why RGM Matters Now

The post-inflation market has fundamentally changed the commercial landscape for CPG brands. Several dynamics make RGM more critical than ever:

Consumers are deal-seeking. 70% of shoppers across the US, UK, France, and Germany are actively seeking promotions and deals. 49% wait for preferred CPG items to go on sale before purchasing. This means trade promotions are more important for maintaining volume, but also more expensive if not managed carefully.

Private label pressure is intensifying. 52% of US supermarket purchase decisions are now influenced by store brands. Shoppers who switched to lower-cost alternatives during inflation may not switch back without compelling reasons - and promotions are a key tool for earning reconsideration.

Retailers demand efficiency. Retail partners are increasingly sophisticated about trade spend ROI and expect manufacturers to demonstrate the effectiveness of their promotional investments.

Companies that implemented RGM during this period saw 4-7% annualized gross margin improvement according to McKinsey's Revenue Growth Management research. That advantage compounds over time as better data enables better decisions.

Getting Started with RGM

You don't need a multi-million dollar TPO platform to start practicing Revenue Growth Management. The core capabilities that deliver 80% of the value are:

1. Customer-level P&L visibility - Know your true profitability by customer, not just your top-line revenue. This is the foundation of margin intelligence.
2. Promotion-level ROI measurement - Score every promotional event on incremental margin, not just volume lift. Our promotion ROI analysis delivers exactly this.
3. Data-driven annual planning - Use historical performance to plan forward, not just copy last year's calendar. Annual promo planning connects measurement to decision-making.

These three capabilities create a closed-loop system: measure what happened, understand why, and use that knowledge to plan what's next. It's the foundation of Revenue Growth Management, and it's within reach for any CPG brand willing to invest in the analytical discipline.

Ready to start your RGM journey? Let's talk about building the analytics foundation for profitable growth.