Revenue Management

What does Revenue Management mean?

Revenue Management is our collective capability (mindset) to constantly maximize Revenue and Profitability generated from our volume sold (Val/Vol optimization) through disciplined analytics and execution (organization & tools):

”To sell at the right occasion, the right brand, with the right pack, with the right service, for the right price, to the right customer".
 

Why Revenue Management?

In the mature markets with limited growth potential incremental revenue generation becomes very difficult. However knowing that cost cutting and optimisation has it's limitations which are in relatively sophisticated companies already done growing bottom line = profits could only be generated through growing the top line.
Growing top line with limited or no relative increase of the cost is directly transformed into the EBIT or profitability performance/growth and exactly that is the priority and the final goal of the Revenue Management.

All leading companies have Revenue Management as the key priority?
 

 

What could be the pillars and enablers?

Pillars:  

Brand / SKU pricing
Pack Price Architecture
Mix Management
Promotional Optimisation
Discount Trade Terms

Enablers:
People, Processes, KPIs, Cont. Improvement
 

From where to where...
 

 

Examples of Revenue Management

 

 

Channel differentiation

 

 

Alcoholic beverages buying occasions
 

 

Returns on promotions

 

 

Promo efficiency metrics

 

 

Price and discounts in 4 steps
 

Discount / Investment Categories and sub categories and how to switch to pay for performance discounts structure

 

What will you gain from the workshop?

Understanding of Revenue Management and the burning need for „mindset“ shift from volume to value.
Understand the pillars and what are the concrete implications of the rev mgmt, what could be the pillars and what could be enablers.
Understand the final goals of the revenue management and see what are the results in different industries.
Understand how to and what to benchmark when coming down to revenue management initiatives.

 

Luka Šomen, MBA