TRADE PROMOTION
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When Is the Best Time to Upgrade to a TPM System?
When is it time for a consumer packaged goods manufacturer to upgrade to
a Trade Promotion Management (TPM) system? This is a popular question
among growing manufacturers, especially those in the natural and organic space.
While there are many variables to consider, here are five true-tale signs that the
time is right:
1. You have gone national. Congratulations! Preparing and reacting to the natural growing pains that come with mass distribution and multiple promotional activities occurring in various geographic locations can be a challenge to manage without an effective suite of tools.
2. You are expanding with a broker network. Having “feet on the street” supplies an arsenal of valuable retailer insights and promotional data. This information needs to be tracked and analyzed so it can be put to good use and thoughtfully incorporated into strategies and plans.
3. You have at least $500,000 in trade spend. Even if your budget is not expected to increase, will you know how to do more with the same amount of dollars next year? The ability to see what promotions were profitable (and which ones were not) will be a necessary starting point when you dive into planning mode.
4. You have trouble managing charge-backs and deductions. You are not alone. Sifting through charge-backs and trying to determine if deductions are valid or simply unexpected is a time-consuming challenge. Automating the settlement process will help clear deductions faster and easier, allowing you to determine if there are unused dollars to spend or add to the bottom line.
5. You don’t know the exact amount of sales lift you are getting from trade spend. At the end of a trade promotion lifecycle, accurate baseline sales and post-promotion analytics are essential. Having a sophisticated TPM measurement tool to assess the promotional lift received from trade spending will ensure different promotion scenarios are developed and also allows for ROI predictions and meaningful post-program analysis. Mastering this step is critical if you truly wish to take trade promotion management to the next level.
If your company meets these criteria, the time is right for a TPM solution. However, if you conclude that the solution to these criteria is to start building complex Excel spreadsheets: Stop! History shows companies quickly outgrow this management method and are dissatisfied with visibility into critical trade spending activities. According to industry surveys, the top barriers preventing companies from leaving ineffective processes and prohibitive desktop spreadsheets in favor of a TPM software system are cost and organizational readiness. Are those hurdles holding your company back?
This article was provided by TradeInsight. For more information: www.TradeInsight.com.
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