RGMAcademy
Start free
Back to blog
Cross-Lever

What Is Revenue Growth Management (RGM)?

Six levers, not one, and most companies are only using two of them.

Bulent Kotan8 min read
What Is Revenue Growth Management (RGM)?

The short version

  • Revenue Growth Management (RGM) is not a smarter word for pricing. It is six levers: strategic pricing, promotion, price-pack architecture, mix and assortment, trade terms, and channel strategy. Most companies actively manage two of them.
  • The two almost everyone runs are list pricing and promotion, because both can be decided in a room. The other four need cross-functional plumbing that most organisations have never built.
  • Pricing earns its reputation. On the classic 2,463-company benchmark, a 1 percent improvement in price lifts operating profit by about 11.1 percent, against 3.3 percent for a 1 percent volume gain.2 A lever that powerful is worth mastering. A lever you cannot keep pulling is not a strategy.
  • 2026 is when the one-lever playbook stops paying. The growth of 2022 to 2024 was built on higher prices and premiumization without changing the underlying value proposition,1 and that road has run out. Unilever has already pivoted, guiding 2026 to at least 2 percent volume growth.8
  • Coca-Cola's OBPPC discipline, the right brand, pack, and price for each occasion and channel, is what integration looks like: several levers aimed at one shopper moment instead of pulled in isolation.
  • The Monday read: name the two levers you actually run, then pick the one you are ignoring that would move your category most. Six-lever companies are rare, which is much of why only a small minority get RGM right.

The argument that ends every year-end planning meeting

Somebody says "we need to be smarter about RGM," everybody nods, and then the conversation turns to next year's price increase. That is the tell. In most companies, Revenue Growth Management has quietly become a more impressive name for the annual pricing round.

It is meant to be more than that. RGM is the management of six commercial levers that together decide how much money a portfolio actually keeps: strategic pricing, promotion, price-pack architecture, mix and assortment, trade terms, and channel strategy. Pull them as a system and they compound. Pull one and call it a programme, and you have an expensive way of doing what you already did.

The reason most teams run two of the six is not laziness. List pricing and promotion are the two levers a small group can decide in a room and execute through existing processes. The other four need a shared fact base, agreement across functions, and someone empowered to make the call. That plumbing is harder to build than a price file, so it mostly does not get built.

Why most companies stop at two levers

Follow the chain and the pattern is not laziness, it is structure. List pricing and promotion are decisions a small group can take in one room and push through processes that already exist, so they get pulled every year. The other four levers, pack architecture, mix, trade terms, and channel, each need a shared set of numbers everyone trusts, agreement across functions that usually disagree, and one person with the authority to make the call. That plumbing is harder to build than a price file. So if the wiring is never built, then the four hard levers never get pulled, and then the company runs two of six while calling it a programme. The fix is not working the two levers harder. It is building the third.

FRAMEWORK · FIG. 01 Six levers. Most run two. The two lit tiles are the ones almost every company actively manages RUN Strategic pricing list price and price-value RUN Promotion the trade calendar RARELY Pack architecture sizes and price points RARELY Mix & assortment steering the basket RARELY Trade terms the gross-to-net line RARELY Channel strategy by format and customer Two levers fit in a room. The other four need cross-functional plumbing. ILLUSTRATIVE · THE SIX RGM LEVERS FIG. 01
Fig. 01 · Six levers, most run two. Strategic pricing and promotion are the two levers a small team can decide and execute alone. The other four need a shared fact base and cross-functional authority, which is why they are so often left idle.

Why 2026 is when the one-lever playbook stops paying

For three years, one lever was enough. Costs were rising, retailers were forwarding the increases, and shoppers accepted them because the headlines explained why. Growth came from higher prices and premiumization, without much change to the underlying value proposition.1 It worked until it did not.

The conditions have turned. Input costs have settled, so a price rise now reads as a choice rather than a pass-through. Shoppers who traded into private label during the squeeze have largely stayed there. Retailers push back hard: in January 2024 Carrefour pulled Lay's, Quaker, Lipton, and Pepsi from its shelves across France, Belgium, Spain, and Italy over increases it called unacceptable.7 A company whose only working lever is list price has nothing left to pull into that.

The companies ahead of this are already moving. Unilever delivered volume growth with positive mix in 2025 and has guided 2026 to at least 2 percent volume growth, the language of a business that has rebuilt more than one lever.8 The point is not that pricing was wrong. It is that a portfolio needs all six levers working when the easy one stops paying.

The six levers, and what each one controls

Strategic pricing is the list price and the price-value position behind it. How far you can push it depends on elasticity, which for mainstream FMCG brands clusters somewhere around minus 1.7 to minus 2.6 across published meta-analyses.34 It is the heaviest lever you have, and the figure below shows why.

DATA · FIG. 02 Why price is the heaviest lever Operating-profit lift from a 1% improvement in each lever Price 11.1% Variable cost 7.8% Volume 3.3% Fixed cost 2.3% Price is about three times the volume lever. It is also the one you can pull least often. SOURCE: MARN & ROSIELLO, HBR 1992 (2,463-COMPANY AGGREGATE) FIG. 02
Fig. 02 · Why price is the heaviest lever. On the classic 2,463-company aggregate, a 1 percent improvement in price moves operating profit by about 11.1 percent, against 7.8 for variable cost, 3.3 for volume, and 2.3 for fixed cost. Source: Marn and Rosiello, Harvard Business Review, 1992.

Why the gap between 11.1 and 3.3 is bigger than it sounds

The gap looks like a tidy statistic until you sit with what it means for where you spend your effort. On the 2,463-company benchmark, improving price by a single point moves operating profit about 11.1 percent, while winning a point of volume moves it about 3.3 percent. So price does roughly three times the work of volume per point gained. That is why pricing earns its reputation as the heaviest lever. The catch is in the second half of the sentence: you can win volume again next month, but you cannot keep raising price every quarter without the shopper and the retailer pushing back. A lever that powerful but rarely pullable is exactly why one lever is not a strategy.

Promotion is the trade calendar, and it is where the most money leaks. More than half of all trade promotions deliver little or no sales lift, which means a large share of the single biggest line in the trade budget is renting volume that would have arrived anyway.5 Price-pack architecture is the set of pack sizes and price points that lets each shopper find a reason to buy; many brands have quietly vacated the opening price points that used to anchor their volume.6 Mix and assortment is the steering of the basket toward the lines and channels that pay, rather than chasing every listing. Trade terms is the gross-to-net line, the 15 to 30 percent of list price that disappears between invoice and net revenue, which is investment if you manage it and a giveaway if you do not. Channel strategy is the discipline of pricing and packing differently by format and customer, including the channels growing fastest: global retail media is on track for roughly 165 billion dollars in 2026, and India's quick commerce market is forecast to reach 57 billion dollars by 2030.910

Gross-to-net, in plain words

The list price on the invoice is almost never the money you keep. Between that headline number and your actual net revenue sits a stack of deductions: promotional allowances, customer discounts, listing and display fees, rebates. On a typical consumer-goods line that stack is 15 to 30 percent of the list price. Manage it deliberately and it is investment that buys you volume or distribution. Leave it on autopilot and it is a giveaway nobody decided to make. The gross-to-net line is where a lot of the money a portfolio thinks it earns quietly leaks away.

What integration looks like: Coca-Cola's OBPPC

The six levers earn their keep when they aim at the same target. Coca-Cola's OBPPC discipline, pioneered by its Latin America division, is the cleanest example. It puts the right brand, pack, and price into each occasion and channel, so a single-serve chilled bottle at a convenience till and a multipack at a supermarket are deliberate, different decisions rather than the same product at two prices.

FRAMEWORK · FIG. 03 One shopper moment at a time An illustrative OBPPC matrix: pack and price by occasion and channel CONVENIENCE SUPERMARKET ONLINE On-the-go 250ml, premium white space white space Daily fridge 1L, mainstream 1.5L, value subscription Sharing white space 6-pack, bulk 12-pack, bulk Each cell is a deliberate choice. The white space is a choice too. ILLUSTRATIVE OBPPC MATRIX · OCCASION x CHANNEL FIG. 03
Fig. 03 · One shopper moment at a time. An illustrative OBPPC grid. Each filled cell is a deliberate pack-and-price choice for one occasion in one channel; the empty cells are deliberate too. Illustrative, not a real Coca-Cola plan.

The software everyone is buying sits on top of this, not underneath it. Coca-Cola committed 1.1 billion dollars over five years to the Microsoft Cloud and its generative-AI capabilities, up from a 250 million dollar agreement in 2020,11 and Reckitt built an AI-enabled RGM platform with McKinsey that it has rolled out across roughly 35 markets since 2021.12 Applied to levers that are already wired together, that spend compounds. Applied to a two-lever programme, it just produces confident noise faster.

Seven questions that reveal which two levers you really run

Score yourself yes or no, quickly, without flattering the answer.

  1. Can you state your price-value position against the category, in numbers, today?
  2. Do you know what share of last year's promotions actually paid back?
  3. Is there an entry pack at a price point the value shopper can reach?
  4. Does anyone own the mix, deciding which lines to push and which to let go?
  5. Can you read your gross-to-net line by customer, not just in aggregate?
  6. Do your packs and prices change by channel on purpose, not by accident?
  7. Is there one person with the authority to trade one lever off against another?

Most companies answer yes to two, usually the first and the second. The pattern of your noes is the map of the levers you are leaving on the table.

The two failure modes that kill RGM before it scales

The first is no owner. Analysis without authority produces excellent slides and very little change, because every lever has a different function protecting it and nobody empowered to overrule them. RGM only works when one team holds the integrated view and carries a profit and loss it can defend.

The second is buying the tool before building the capability. A platform handed to a two-lever organisation does not create the missing four levers. It automates the two you already had and bills you for the privilege. Get the wiring right first, then let the software make a working system faster.

So name the two levers you actually run, find the one whose absence is costing you most, and build that third lever before you renew the platform contract. The companies in the small minority that get RGM right are not the ones with the best pricing. They are the ones running the most levers at once.

References

  1. "Growth is now a challenge for consumer goods companies because they have built their successful strategies since 2022 on higher prices and premiumization (trading up), but without changing the underlying value proposition." Boston Consulting Group, Driving Volume-Led Growth in Consumer Markets, 2025. bcg.com
  2. A 1 percent improvement in price lifts operating profit by about 11.1 percent, against 7.8 for variable cost, 3.3 for volume, and 2.3 for fixed cost, across a 2,463-company aggregate. Michael V. Marn and Robert L. Rosiello, "Managing Price, Gaining Profit," Harvard Business Review, 1992. hbr.org
  3. Mean brand-level price elasticity of about -1.76 across more than 220 brands. Gerard Tellis, "The Price Elasticity of Selective Demand: A Meta-Analysis," Journal of Marketing Research, 1988. gtellis.net
  4. Mean price elasticity of about -2.62 for consumer goods. Bijmolt, van Heerde, and Pieters, "New Empirical Generalizations on the Determinants of Price Elasticity," Journal of Marketing Research, 2005. journals.sagepub.com
  5. "Over half of all trade promotions result in little to no sales lift, meaning manufacturers are ultimately wasting time and money." NielsenIQ, 2022. nielseniq.com
  6. Some manufacturers have unintentionally vacated key opening price points, limiting accessibility among price-sensitive shoppers. Simon-Kucher, 2025 Growth Playbook. simon-kucher.com
  7. Carrefour stopped selling PepsiCo products, including Lay's, Quaker, Lipton, and Pepsi, across France, Belgium, Spain, and Italy in January 2024, citing "unacceptable price increases." CNBC, 5 January 2024. cnbc.com
  8. Unilever delivered volume growth and positive mix in 2025 and expects full-year 2026 underlying sales growth at the bottom end of its 4 to 6 percent range, with at least 2 percent volume growth. Unilever, 2026. unilever.com
  9. Global retail media ad spend is projected to reach approximately 165 billion dollars in 2026 (US about 69.3 billion dollars). eMarketer, 2026. emarketer.com
  10. India's quick commerce total addressable market is projected to reach 57 billion dollars by 2030 (Morgan Stanley, raised from an earlier 42 billion dollar estimate). BW Retailworld, 2025. bwretailworld.com
  11. "Coca-Cola made a 1.1 billion dollar commitment to the Microsoft Cloud and its generative AI capabilities," up from a 250 million dollar agreement in 2020. The Coca-Cola Company, April 2024. coca-colacompany.com
  12. Reckitt's RGMx, an AI-enabled revenue-growth-management platform built with McKinsey and deployed across roughly 35 markets since 2021. McKinsey & Company. mckinsey.com

Keep going

If this is the map, the lessons below are the territory. Each one trains one of the six levers.

More from the blog

NRM vs RGM. Why the label is a reporting-line signature, and the three markers that separate a real capability from a branded programme.

The Great RGM Reset. The shift from price-led to volume-led growth, and why the volume machine is a multi-year rebuild rather than a switch.

Why CPG Promotions Destroy Value. A closer look at the second lever, and the three metrics that tell real lift from rented volume.

Lessons inside the course

Price elasticity →The first lever. How much volume a price move costs you, and therefore how far you can push the heaviest lever you have.Start the lesson → Promotion ROI →The second lever. How to read whether a promotion paid back, so you stop funding the half that does not.Start the lesson → Pack roles →The third lever. How pack-price architecture covers each occasion and why the entry pack matters most.Start the lesson → The gross-to-net bridge →The fifth lever. Where the 15 to 30 percent between invoice and net actually goes, line by line.Start the lesson →