TRADE PROMOTION

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SECTION TWO

How to Optimize Trade Spend to Spur Growth

A lack of spending insights, coupled with widespread inefficiencies in trade promotion processes, can often

cause a company’s sales organization to spend much more time on trade promotion management than it should.

As a result, millions of dollars are drained each year from the bottom line.

The solution is deploying a system designed specifically to help companies gain better visibility into their trade

spending and to use that visibility to drive greater efficiencies throughout the TPM value chain. That was the

path taken by AdvancePierre Foods.

The company is the country’s #1 provider of sandwiches, fully cooked burgers, Philly steaks, stuffed chicken breasts and country-fried steak. Despite its success in the retail, convenience, and foodservice channels, the marketer of Barber Foods, Steak-EZE, Fast Fixin’ and Pierre brands was stifled by the weak performance of its trade spending programs, which restricted its potential for growth.

Nicholas Gitto remembers discussing how to manage trade spending when he interviewed for the corporate positon of Vice President of Customer Marketing and Sales Operations. The retail division faced significant challenges when it came to creating the TPM capability it wanted.

“I knew if I got the job, that responsibility was going to fall squarely on my shoulders,” he said. “In that moment, I made a pledge. I told my potential boss that I would manage trade spend more effectively than had been done - period!”

Gitto - with his bold promise to rein in trade costs - was brought on board to help optimize AdvancePierre’s trade spend potential. He went about reversing the company’s lackluster performance by implementing the AFS Trade Promotion Management Retail solution, formerly called TradePro.  The TPM solution aims to help companies like AdvancePierre gain better visibility into its trade spending.

He was very familiar with the TPM solution from previous roles in other companies, and knew it offered all the features and flexibility AdvancePierre needed to realize its TPM vision. “The challenge was due to our processes and policies,” he said.

AdvancePierre launched a TPM transformation that focused on three areas: process alignment and reengineering, reporting and training.

“In my opinion, these are the three bundles of capability that underpin a TPM program’s success,” Gitto said. “Our goal was to address these areas so that they - individually and together - would optimally support the AFS TPM Retail solution.”

Nick applied his deep understanding of process development to define roles and responsibilities and standardize how the sales and marketing teams would use the solution to manage trade-related activities and costs. Reporting and training processes were also adjusted to better meet the needs of the business. Throughout the transformation, AFS experts were on hand to ensure that the system supported AdvancePierre’s new ways of working. This involved tactical training and managing the technical interface between TPM Retail and the client’s existing ERP system.

“One of its biggest advantages is its ability to work so seamlessly with other systems. With that built-in agility, we knew that TPM Retail was going to take our data loads and turn them into insights that would drive our business forward,” Gitto said.

New processes, reporting structures and training have helped AdvancePierre’s retail division optimize the value of its investment and dramatically improve the way it plans and manages its trade spending. After the first year of using the solution with new processes and policies, AdvancePierre has pulled millions of dollars of inefficient trade spending out of the system and reapplied these trade funds back into the business-building customer programs.

“We now have standardized, boundary-driven processes directing the ‘who, what, when, where and why’ of trade spending,” said Gitto. “And perhaps most importantly, we now have a streamlined planning cycle. The plans we develop with our brokers and field sales reps are uploaded as flat files into the TPM Retail, which is saving us a month of planning time. Previously, we were loading everything related to our planning by hand.”

Nick attributes the successful transformation of trade spending to two primary factors. “One is visibility,” he said. “With our new processes, TPM solution now gives us clear insight into everything from our plans - and our real-time performance against those plans - to the safeguards we use to prevent mistakes. The second factor, which is related to heightened visibility, lies in the post-evaluation models we can now employ. These models allow us to understand exactly what is working and what is not. We can even examine returns by customer or brand to understand who is spending what and why. With that level of insight, we can make really good choices when it comes to future planning and investment strategies.”

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