Overview: Revenue growth in Practice
This article from Revology Analytics explains revenue growth in the context of modern pricing analytics and revenue growth management. It draws on real engagements with mid-market and enterprise clients to turn revenue growth from a buzzword into a measurable commercial capability. Read on for the full perspective, and see our related reading for additional depth.
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Revenue Growth Drivers Analysis (aka. Price-Volume-Mix analysis) is another simple but powerful Revenue Growth Analytics method. It helps companies understand the specific factors driving their Net Revenue growth (or decline) and identify specific areas to take action for improvements.
Building this capability from customer-product level transactional data intuitively and visually is critical for companies, especially when they are having a hard time with Net Price Realization.
For example, for Consumer Product companies, robust and persistent inflation has created downward pressure from their Retail partners (especially the likes of Walmart) to dampen price increases.
But as we know, Net Revenue increases are more than just raising Prices or selling more stuff. It’s also heavily influenced by optimal Customer and Product Mix Management.
This is where a Revenue Growth Drivers capability comes in: it enables you to identify specific Customer and Product segments where you can surgically raise prices and flag specific opportunities to increase the sales mix on higher priced (or more profitable) products.
In this video, the Revenue Growth Drivers Analysis technique is explored in detail for a fictitious company, Company ABC, to understand the drivers of year-over-year net revenue growth.
The analysis breaks down the impact of Pricing actions, Volume, and Customer and Product mix on the company’s Net Revenue growth. The detailed analysis is conducted at the customer-product level rather than an aggregate level, allowing for more actionable insights.
We illustrate the detailed calculations for Pricing, Volume, and Mix impacts using an Excel Growth Drivers Analysis template, available for download here.
Frequently asked questions about revenue growth drivers analysis
What is revenue growth drivers analysis?
Also known as price-volume-mix analysis, it is a simple but powerful revenue growth analytics method that shows the specific factors behind net revenue growth or decline. It separates the impact of pricing actions, volume, and customer and product mix, and points to specific areas where action can improve results.
Why build the analysis at the customer-product level?
Building it from customer-product level transactional data, rather than at an aggregate level, produces more actionable insights. It pinpoints the customer and product segments where prices can be raised surgically and flags opportunities to shift the sales mix toward higher-priced or more profitable products.
Why does mix management matter for net revenue?
Net revenue growth is not only about raising prices or selling more units; it is also heavily influenced by customer and product mix. That matters most when net price realization is hard, as for consumer products companies whose retail partners, such as Walmart, push back on price increases amid persistent inflation.
How can you calculate price, volume, and mix impacts?
The video walks through the analysis for a fictitious company, Company ABC, to explain its year-over-year net revenue growth. An Excel growth drivers analysis template with the detailed pricing, volume, and mix calculations is available for download.
Related Reading
- Optimizing Profit Margins for Auto Service, Repair & Tire Retailers: Tactics for Smart Pricing and Revenue Growth Management
- Pricing Policy Strategies: A Practical Playbook for B2B Teams
For broader industry perspective on pricing analytics and revenue growth management, see McKinsey’s Growth, Marketing & Sales insights.
