How is AI Playing a Role in NRM and What You May Be Missing

LS International

While we are still figuring out all the possibilities that the AI of Chat GPT can do for us, many consumer companies have been working with AI for years without letting anyone know. After a couple of conversations with senior leaders within one of the most data driven functions in the sales or finance department, I decided to put together an article with our discoveries.

Anyone who has a global vision of how consumer companies optimise their revenue knows that companies have been using the concept of Net Revenue Management (NRM) for many years to make decisions around product mix, pricing, timing/type of promotions etc. Leaders know that when done right, NRM delivers significant gains. BCG, the global consulting firm, has reported that by using NRM, some companies have improved their EBIT by as much as 2-5% of sales. (Source)

As the portfolio grows NRM becomes an even more important source of competitive edge for consumer companies. But as the business environment becomes more complex, “NRM as usual” will not suffice. We say this because we are seeing clear signs in the market.

What is changing now in NRM?

In the last couple of years, LS International has been assisting clients in the consumer products industry find the right senior leaders to design, implement and manage their NRM programs. Of late, we are seeing consumer companies consciously looking to infuse AI into their NRM programs. We were initially a little surprised at this, but as we engaged with NRM experts and did our own research, we discovered two reasons behind this shift:

  • NRM decision-making has become more complex as there are many more variables to consider.
  • Thanks to advances in technology, decision-makers have access to a lot more data (often in real-time). They also have superior information processing capabilities, which equips them to uncover actionable insights faster. This speeds up tweaks to strategic and tactical actions.

It is no surprise that AI holds significant potential for transforming various businesses, including CPG/FMCG. However, it might surprise you that NRM programs are clearly ahead when it comes down to benefit from the power of AI. In fact, we are at a critical stage where companies need to go from “proof of concept” to “scaling” and this transition needs to be led by people with the right skill sets. Here is where LS International comes into play.

Consumer companies must consciously focus on getting the right talent

Albert Einstein was once asked how he would go about solving a problem if he had only 60 minutes. His famous reply supposedly was: “I would spend 55 minutes on defining the problem and then 5 minutes on solving it.” In a business environment which is disrupted by AI, companies must follow Einstein’s advice to optimize their NRM strategy. Companies need leaders who are able to ask the right questions and develop the right models, while letting the AI come up with the right information and solution. Understanding the challenges will be the key element in a world dominated by AI tools that come up with answers by crossing millions of data points.

With the disruption of AI within the NRM function, We have had to take a holistic approach in our search for senior leaders who can help take our clients’ businesses to the next level by integrating the right AI capabilities into their NRM programs. Rather than focusing too much on their past experience, when conducting searches for NRM leaders, we need to focus on their ability to make good use of this revolutionary technology. These are some of the relevant questions that we are currently using for evaluating senior NRM profiles.

  • Where within the NRM domain, can AI be used to enrich quality of insights, enhance efficiency, plug data gaps or optimize outcomes?
  • What kinds of AI capabilities are needed? In what priority should these be integrated into the current NRM framework? Does the NRM framework itself need to be tweaked?
  • Which third-party tools can be quickly integrated into NRM? Of these, which are the better ones and why? What are the pros and cons of the others?
  • Should the task of integrating AI tools be done by in-house teams or outsourced? If the latter, who should the external partner be and for what broad scope of work?
  • What process/workflow changes will be needed to effectively integrate AI into the business?
  • What data will be needed, at what frequency and from what sources will they be gathered? What will be the relative weightage assigned to different datasets?
  • What governance protocols are needed to validate the AI-generated output?
  • How can the AI tools/models be enabled to “learn continuously” from new data?
  • How will the results be used in decision-making and how will course corrections be made when necessary?
  • What are the potential risks of using AI in NRM and what steps can be put in place to mitigate any downsides?

We assess candidates based on how well they can see the big picture. It is important to keep in mind that the AI software paradigm is very different from traditional approaches to software design development and implementation (including enterprise application roll-outs). To design/tweak, implement and manage an AI-driven NRM program successfully, your business will need skilled professionals who collectively understand the different dimensions of the business, AI, NRM and data science/ modelling and how best to bring them together for a robust whole that is greater than the parts. Your AI-driven NRM team must therefore include:

  •  Data scientists,  mathematicians/statisticians and ML engineers who can build the machine learning models needed to analyse the huge datasets and use the output to detect patterns and strategically connect the dots.
  • Data engineers and machine learning operations engineers  who can build/integrate the right AI tools to accurately extract the necessary data from diverse data sources.
  • Researchers who can make sure that the data introduced inside the model is correct and accurate.
  • Front-end developers who are experts in creating visually appealing and user-friendly interfaces using design and coding skills.
  • Experts in NRM methodologies and experience in applying them and knowing what the potential pitfalls are. Additionally, Individuals with a visionary mindset who are able to ask the right questions and blaze new trails instead of just being limited by earlier ways of thinking and doing.

Out-of-the-box thinking will be needed.

Given the relative scarcity of top talent with AI and NRM expertise, it may not be always possible to find people within the organization. This is why we believe HR teams need to think outside-the box. To ensure that the business has the right people to lead AI-enabled NRM, HR teams will need to look not just at external hiring but also explore the possibility of reassigning individuals to new roles. Given our own extensive experience in assisting consumer industry clients hire senior talent for NRM leadership roles, we believe that HR teams can benefit by taking steps such as the following:

  • Build an inventory of the key business-technology skills needed and identify gaps. Prioritize them so that the recruitment team knows what skills to hire first.
  • Identify in-house talent with the required capabilities and assess their fit for the new role. Search for skills spanning the entire spectrum- NRM, AI, domain, project management etc.
  •  Work with external executive search specialists with experience in NRM, AI and the consumer products domain to search for the best external candidates and assess them not just in terms of their technical skills but also “cultural” and “attitudinal” fit with your organization so that their chances of success are maximized.
  • To the extent possible, use this search to address DEI goals as well.
  • When onboarding new hires, ensure that they are given a 360o orientation to the culture, demands of the new role, procedures etc.

If you need more information on how your company can benefit from LS International’s expertise in senior level executive search for NRM in the consumer products/CPG/FMCG industry and our unique approach to head-hunting, get in touch with us. You can call us on +34 931 760 239 or drop us an email at