The Revenue Manager of Tomorrow

Given their job role and evolving shopper preferences, revenue managers are more susceptible to facing volatile markets, 

In this blog, we will dive deep into:

• The role of a revenue managers
• The future needs of revenue managers
• How Buynomics Virtual Shopper technology helps to shape the revenue manager of tomorrow

What is the role of a revenue manager?

Revenue managers are at the forefront of every consumer goods business. Their job is to understand shopper preferences and optimize products and their prices accordingly, all while aiming to maximize revenue.

These goals remain constant, but achieving them requires continuous adaption to evolving market conditions. Shoppers are more informed and demanding, while competition becomes fiercer. Preferences and means of selling goods and services change rapidly.

But the good news is that thanks to accelerating digitization, revenue managers have increasing data at their disposal to inform their decisions. However, without the right tools, information remains fragmented, and leveraging it is exceedingly difficult.

Interested? You can learn more about the revenue manager of tomorrow in our free whitepaper.

Future needs of a revenue manager

Revenue managers face more volatile markets and evolving shopper preferences.

According to Nielsen, consumers are also more diverse than ever in terms of “ethnicity, income, education, and rural-urban divide,” making the “average” shopper difficult to identify. Revenue managers must, therefore, stay up-to-date with market dynamics and respond quickly to relevant changes.

The following principles are key to success in an ever-more dynamic environment:

1. Lean, iterative processes: Conducting analyses quickly and acting fast is key to staying ahead of the competition amid accelerating market dynamism. Lean processes require a flexible toolset that gives accurate, actionable insights to ensure fast testing and measuring of different outcomes to get to the right answer faster.
2. Acting proactively: Being proactive is immensely important for remaining competitive in the age of big data. Tomorrow’s revenue managers must be proactive and better anticipate how their decisions will resonate with consumers.
3. A holistic approach: To ensure an advantage at scale, revenue managers must employ a holistic approach across channels and categories. This means pricing and product decisions are based on a ‘single source of truth’ and coherent methodology is applied. Only with this consistency do revenue managers ensure that their success is sustainable across the organization.

The tools revenue managers work with today cannot reflect these quickly evolving needs. Consequently, product and pricing decisions can be based on wrong assumptions or come too late amid strong market dynamism.

Revenue managers thus need a toolset that enables them to work efficiently, proactively, and holistically to gain a sustainable competitive advantage.

Figure 1: Consumer insights without Buynomics is a long and incoherent process

Buynomics enables the revenue manager of tomorrow to succeed

Analyzing shopper preferences and charging an appropriate price decides the revenues and profitability of any business. When addressing these topics, revenue managers often stick to approaches they have used for decades or rely on their industry expertise and experience. Consequently, changes in shopper preferences and developments in market dynamics might get overlooked.

At Buynomics' core is the Virtual Shopper AI, a behavioral machine learning algorithm that reflects general human behavior.

Behavioral effects are crucial in pricing and portfolio optimization. Buynomics creates a sample of Virtual Shoppers who behave just like their real counterparts. In over 10 A/B tests, Buynomics has proven to be >95% accurate in its forecasts. This allows revenue managers to optimize prices and product portfolios, including the competitors’ offers.

Figure 2: Buynomics provides an exact picture of consumer behavior

With its machine learning capabilities, Buynomics enables you to become tomorrow’s revenue manager thanks to three core benefits:

1. Buynomics makes forecasting shopper behavior a lean and straightforward process: Running a simulation takes only a few minutes. Results can be saved, and multiple test iterations can be run with ease. Changing prices or product features only takes a few clicks.
2. Buynomics simulates new scenarios in real time: The platform shows the effect of portfolio and price decisions on revenue and profit immediately, without having to wait for additional market study results. Revenue managers can, therefore, proactively test their ideas instead of merely reacting to market trends.
3. Buynomics reflects the complexity of your market: Buynomics can combine all available information, including costs, competitors’ portfolios, and market analyses, to forecast with its Virtual Shoppers. Any simulation, therefore, takes all relevant factors into account every time. Hence, Buynomics solves the difficult task of combining different streams of information into actionable insights.

Figure 3: Profitability of different scenarios compared with Buynomics

Buynomics is a simple, intuitive SaaS-based solution that allows you to test out all scenarios, prices, and product variations imaginable on a virtual market in mere minutes and eliminates the risk of making wrong decisions in the real world.

Virtual Shopper AI combines readily available information into a bigger picture. It creates a sample of Virtual Shoppers who behave just like their real-life counterparts. Once set up, revenue managers can test out various prices and product feature combinations in real time, with no need for additional market and price research.

The risks and expenses of market studies and conjoint analyses are eliminated. With the solution's help, our clients could improve their annual revenue by 3-7%.

All of the above makes the Buynomics machine learning solution ideal for the revenue manager of tomorrow—for a business that is not only more dynamic but also more profitable.

Contact us to learn more about how Buynomics enables the revenue manager of tomorrow to succeed.