Revenue Growth Management
Retailers and consumer packaged goods (CPG) manufacturers generally define revenue growth management (RGM, sometimes called strategic revenue management or SRM) as the holistic optimization of pricing, price pack architecture (PPA), trade and mix management.
Why it matters
Thoughtful RGM strategies can deliver meaningful results. PPA innovation, new product pricing and promotional strategy can drive top-line revenue. These same techniques — combined with careful portfolio mix management — can significantly improve profitability.
In many cases, the opportunity hinges on questions like: is the current mix aligned with consumer preferences? Could pack configurations or price tiers work harder to capture value?
Navigating the complexity
Despite its benefits, RGM is challenging to get right. It often requires:
- Synthesizing imperfect data like consumer feedback and syndicated sales
- Applying technical analysis to identify actionable opportunities
- Coordinating across functions with disparate or competing priorities
Governance structures and decision processes add complexity. Pricing, promotion and mix decisions are often ambiguous, involving multiple stakeholders and misaligned goals. RGM expertise is frequently brought in too late — used to validate decisions rather than shape them.
Refining organizational models, workflows and governance — so RGM priorities are addressed early — helps accelerate progress and ensures decisions are both effective and executable.
Getting the organizational model right is critical
Companies structure RGM in different ways. Some embed it into cross-functional roles, while others build dedicated teams that advise marketing and brand leads. The right setup depends on RGM goals, resourcing, channel strategy, product mix and which levers matter most.
As strategies become more technical, CPG firms are investing in RGM as a core capability. That often includes formalizing governance, building centers of excellence and upgrading tools to support better decisions.
What happens when roles are fragmented or RGM is sidelined? In many cases, decisions stall — or default to tactics that miss broader mix or margin opportunities. Where targeted investment is made, organizations tend to unlock more consistent execution and sustainable growth.
How we help
L.E.K. Consulting supports businesses across all stages of the RGM journey — from diagnostic to implementation. Our teams bring deep expertise across key levers:
- Price pack architecture
- Pricing and elasticity analysis
- Trade budgeting and promotion strategy
- Product mix and assortment optimization
We also help organizations enable RGM through fit-for-purpose support structures — including custom tools, third-party platforms and governance models that streamline decision-making and embed best practices.
