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Exceedra Byte: Real-World RGM Experiences

TRADE

This week on Exceedra Byte, our host Brian Kolubinskyj is joined by Gabriel Sawhney, Exceedra Solution Consultant. They both share some of their RGM experiences working for one of the world’s largest snack manufacturers.

Brian: Gabe tell us a little bit about your background and what makes you an expert on Revenue Growth Management (RGM) and the implementation of a structure like that.

Gabriel: I spent a couple of years working for a snack company and I had the fortunate ability to build out a trade platform in Excel and implement it with one of the small brands they owned. I also got to roll out a trade platform that we built internally as well as got to work with them to roll out a trade optimization platform that we purchased. So, I have a lot of background and understanding of how and what we are spending from excel or a piece of paper to the whole way of using systems.

Brian: Did you have any favorite sales team member that you got to work with while you were in Finance?

Gabriel: For sure. When I worked in the Revenue Management team and helped control the budgets for my sales members I got to work with this guy (pointing at Brian). He was the only person I have ever worked with who had negative trade.

Brian: Gabe, are there any RGM experiences you can share with the audience? Maybe a specific instance on how us enabling that RGM team and breaking down all these silos helped you accomplish something bigger that you would not have been able to do on your own.

Gabriel: Yes, absolutely. So, we were doing some post-promotional analysis of our club channel and I was specifically working on Sam’s Club. I was trying to figure out of all the different promotion types that we have run at Sam’s Club which ones were profitable, which ones we should continue to invest in and if there were any we should be taking away or reinvesting somewhere else. So, when we were looking at the end caps, we were able to work with the Category team to pull in some of the data on how much actual display we got at Sam’s Club. We were able to understand that we were paying for 100% of the stores to have these end caps and we are only getting 20-30% compliance from the stores. So, we were not actually getting any of the benefit we were looking for. And that all started because we realized we were not getting the lift we expected and working with that other team we were able to identify that.

Brian: So with your trade component understanding that you were not getting the ROI, you were able to lean on the Category team to understand the level of ACV (All Commodity Volume) you were getting on display, you were then able to get with the Sales team to let them know that we need to change the strategy going forward and then even realign with the Finance team to make sure that the trade was involved to move forward to help optimize the plan at Sam’s?

Gabriel: Yes, that is exactly what we did. Once we realized this was not working from the Category and Revenue Management perspective, we pulled the Finance team to make sure it was OK to redeploy these dollars internally. We did not want to take them from Sam’s because we had other events that were performing for us, so we redeployed them into other events at Sam’s Club. So that is when we were able to work with the Sales team to go and identify another event, we can spend the money against.

Brian: Actually, I almost have a similar story as well that was a tough decision that I had to be a part of spearheading once we implemented an RGM team.

 

I was on the Category team before we implemented an RGM team and once that team was implemented, I took a hybrid role where we were leaning on Strategy, Finance, Trade and Category all at the same time. It also stemmed from Sam’s – Sam’s wanted a pack that Costco had. So, it was my job to make sure that we did not have any infighting between Costco and Sam’s. 

 

But I was able to lean on the Finance team to do a P&L at the product customer level and that P&L had never been run for that particular product that Sam’s was interested in. And then we found out why Sam’s were so interested in it – it was because it was delivering negative 12 points of contribution margin for every pack that we were selling. 

So then, it was my turn to go lean on the President of Sales and get his backing, get with the Marketing team to understand how we can replace this item, make both Costco and Sam’s happy, get with the Category team to see how the rest of the category was doing at both of those places for particular items of like size shape and form. 

 

And finally get with the Trade team to see how to strip away this palette that has been selling for 10 years on a constant rotation nationally at Costco delivering $9M annually. I had to work with the Trade team to reduce that individual salesperson’s goal by $9M so that he was not adversely affected by his bonus.

 

So, it was all working together making sure that everybody is happy with that decision. Because we had that RGM team, and I had a leader that would back me and make sure everybody got on board with that decision really made that happen almost seamlessly.

That is what RGM is all about – not making decisions that are right for you in your silo but really bringing everybody together to make decisions that are right for the organization as a whole.

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Exceedra Byte is a weekly vlog series where we take complex trade and revenue growth management topics and break them down into byte-sized pieces. Stay tuned every Thursday for new episodes.

Watch the last episode of Exceedra Byte – What is RGM?

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