Unlocking Business Value and Boosting ROI through Revenue Growth Management – Part 2
CPG companies collect a vast variety of data which is market-specific and channel-specific such as Point of Sale data, brand and loyalty data, Channel data, shopper research, D2C sales analysis, social media data, third party data like Nielsen and so on. Taking a leaf out from Harnessing Revenue Growth Management to Boost RO Unlocking Business Value and Boosting ROI through Revenue Growth Management I – Part 1, the challenge arises when departments such as sales, marketing, and finance teams function in silos with their own sources of data, data owners, processes and KPIs and analytics tools. This brings us to the second challenge of- Data Integration.
RGM tools cleanse and harmonize data from multiple sources, to create a unified version of truth enabling executives to make informed data-driven choices. Despite massive expenditure, CPG businesses fail to achieve this harmony across departments and categories due to a lack of this holistic insight. It is the lack of a single, holistic version of the truth, that results in CPG organizations failing to distill alignment across functions and categories, despite huge spending. Departing from the traditional approach, the modern RGM capabilities replace redundant efforts, multiple processes, and inconsistent facts with a holistic approach, where a single version of truth (source data) collated from multiple sources, functions, and categories act as the foundation for reporting, lift coefficients, pricing strategies, market plan development, assortment planning, and integrated business planning. Let’s dive in deep.
How should organizations deal with Data Integration Challenges and how does RGM aid in the process?
Harmonize disparate sources of data
To gain a holistic view of the retail landscape, CPG companies must consider traditional data sources as well as a myriad of syndicated data from third-party vendors to assess consumer behavior to create a 360-degree omnichannel approach. Syndicated data brings in channel-specific data that offers a complete picture of the products and retail landscape outside the scope of the company. It helps businesses gauge opportunities across categories, conduct competitor analysis, find lucrative channels of investment, and profile target shoppers. Often CPG companies end up with a data set that only has an internal view. It is imperative to build a data set that converges with syndicated data as well, to attain a holistic perspective. Similarly, any Models developed must use this integrated data either enhancing the model with richer data or placing constrains on models to give scope specific insights. It is with such comprehensive insights that companies can design and execute a full portfolio of both short-term and long-term initiatives to drive market growth. For example, understanding the cannibalization of brand can help design collaborative marketing strategies instead of conflicting ones. Efficient RGM capabilities help CPG companies,
- Maintain a shared vision across functions and categories to create strategic alignment through the usage of a commonly agreed upon language of data and insights
- Build an outside-in and deeper micro-segmented understanding of the consumer and drivers that influence purchase behavior
- Leverage AI techniques to augment existing enterprise data scrape public sources of data to further enrich consumer understanding and market trends while unearthing deeper insights on consumer and purchase behaviour
Institute an agile data integration process
Getting the right data, at the right time to draw insights is crucial to the success of modern-day CPG companies. Due to the sheer velocity and variety of formats in which data is compiled, often CPG companies lack the right tools to leverage data to its full potential. Many CPG companies struggle to scale their solutions due to the underutilization of data. They are often left with topical solutions that force companies to adopt brute force analytics techniques each time a problem needs to be solved. To overcome this hurdle, CPG companies must invest in tools, methods, and automation processes. RGM capabilities will allow CPG companies to,
- Link and extract valid data from multiple data sources – In an automated, auditable fashion
- Convert raw data into (auditable) feature stores ready for consumption into Models and Data Science experiments from different teams
- Gain real-time recommendations from data Make insights and recommendations as close to real time as possible with a Data, MLOps and DevOps strategy
- Plan long term goals and invest in building data infrastructure, storage systems, compute environments and DevOps systems to establish automated pipelines for orchestration
- Gain actionable insights through creative and effective usage of data
- Integrate tools and standardize the usage of data across the company
- Plan long term goals and invest in building data infrastructure & storage systems to establish ETL pipelines for orchestration and automation
Use Data Efficiently to Derive Actionable Insights for fast experimentation and Strategy validation
Efficient use of data can unlock high-impact results for businesses. It can help CPG companies garner market trends, enhance the consumer experience, improve strategic decision making, aid in the innovation process, help in digital transformation, and so on. But, unless you analyze and leverage data effectively, it does not translate to impactful results, but merely becomes untapped cogs in your data warehouse. Often CPG companies are burdened with black box solutions that do not equip the users to understand ‘why’ a certain metric was accounted for or even lacks the flexibility to include business nuances and judgments.
Many CPG companies also lack the analytic capabilities to collate and analyze data from multiple sources, resulting in an obstructed view of the category’s performance and potential. RGM applications can analyze data across its length and breadth to generate insights that are aligned with the company’s business goals, which invariably has a higher chance to drive action. . For instance, when a giant F&B manufacturer saw a steep decline in sales in one of its larger markets, they availed RGM capabilities to gain a nuanced understanding of their consumers. This helped them identify potential opportunities including products that could complement their existing portfolio, resulting in a shift towards higher growth and profit pools. Therefore, leveraging RGM will help CPG companies,
- Develop KPIs to track and measure performance across categories to take immediate and corrective measures with real-time insights
- Deliver relevant metrics to the right stakeholders in real-time to capture business value
- Generate insights that are specific, with granular details on ‘why’, to draw immediate action validation
- Get baseline metrics to compare fluctuations in data
Harmonizing data sets and harvesting insights can yield tremendous ROI for your company. Note that, this is not a ‘one and done’ activity, but a process that evolves over time to bring together and standardize disparate sources of data. Also, while RGM solutions can provide you with multiple actionable insights, it is up to the managers and key stakeholders, to leverage these insights and drive them to adoption.
Other than organizational challenges and hurdles pertaining to data integration, companies also face technological challenges in implementing RGM solutions. Read the Part 3, the last piece of this series to know more about RGM solutions and the benefits it can bring your company.
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