For CPGs, the COVID-19 crisis has made one thing abundantly clear: to stay ahead, you have got to remain agile. Pressure on margins is growing as the pandemic causes dramatic shifts in consumer habits and retailer operations. If you cannot identify how and where to invest quickly, you will be at a significant disadvantage.
That is why savvy CPGs have been adapting and evolving their net revenue management (NRM). Underpinning NRM with the right technology and approach, and you can gain the insight you need to make better, faster decisions around joint business planning and promotional spending.
To put it simply, if you want to succeed, you need a modern and effective NRM strategy enabled with the right platform. In this blog, we will explore the top three reasons to overhaul your NRM – and why that change is worth it.
1) Traditional IT will not cut it anymore
The COVID-19 pandemic has forced businesses around the world to work remotely. But even when some restrictions eventually begin to lift, it looks like working from home could become the new normal. 60% of people in the UK said that they would like to carry on from home if they have the choice, while 52.6% said they do not want to return to a standard office at all once the crisis is over.
If NRM is going to be effective in this new normal, employees will need to have the right data readily available to them, wherever they are. But many organizations are still using outdated technology and processes that are not compatible with an agile remote workforce.
If you are working off cumbersome spreadsheets scattered across your organization, it is time to change to a more efficient system. Modern demands call for a modern approach, where new technology streamlines your NRM processes and data and makes it easy for your people to access the insights they need.
2) You need one version of the truth to succeed
Sales trends, price changes, customer demographics – head offices have more data points at their disposal than ever before. But data is only one half of the equation, and more does not always equal better. Actionable insights are what count, so if you cannot structure all that data in a way that makes sense, its value will be limited.
This becomes particularly problematic in large, global organizations. If sales teams working in different regions or countries are not using consistent data, they will end up taking disparate approaches. It is a lot harder to optimize your operations when you do not have everyone singing from the same hymn sheet.
Data should improve your NRM, not make it more confusing. You need to have a single version of the truth. This means you need tools that can turn complex data from multiple sources into an accurate picture that is consistent across your organization.
3) Improving NRM helps your business grow
Change management in NRM is not just about keeping up to date with the latest technology. It is an opportunity to build capability in your organization and drive incremental profit.
With better visibility over budget allocation, you get a clearer view of what is being spent where, and what you are making back. This will help you develop smarter, fact-based joint business plans that drive category growth, benefiting both you and retailers by responding to consumer demands.
A carefully built plan can put you on the right path, but as recent events have shown, you need to adapt fast to thrive. When you can immediately see what is working and what is not, you are in a better position to be proactive and rapidly respond to market changes.
Change for people, not machines
Technology plays a vital part in changing your strategy. It helps your NRM teams perform better. But whatever goal you are trying to achieve, do not forget that the technology needs to work for the user, not the other way around.
One of the toughest aspects of change management is getting the change to stick. If your teams are spending more time trying to make the technology work than using it to get things done, they will go back to how they were operating before. That is why the solution must be fast to deploy, simple to use, and work around the user’s needs.
NRM transformation is a journey worth taking
Some businesses are taking steps in the right direction to improve their net revenue management. But many still rely on manual processes and inconsistent data sources. As a result, they are missing out on opportunities to grow revenue and profit.
As technology evolves and data becomes more abundant, organizations that do not enable their net revenue management processes with agile, user-centered tools will be at an ever-increasing disadvantage. The ones that do, however, will be in a much better position. By implementing new technology that empowers users and provides one version of the truth, they will be able to cut straight to the prescriptive insights to drive profit, avoid loss, and come out ahead in a competitive market.