TRADE PROMOTION
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Best Practices for Achieving Real-World Customer Planning
Customer planning can be challenging for sales departments. It is where the greatest amount of variability exists
because forecasts can be subjective and/or based on gut instincts - even though many organizations have invested in
trade promotion management (TPM) technologies as part of their ERP solutions to help drive reliability in their planning.
As is often the case, technology is not a silver bullet. To have accurate sales planning, organizations need to also invest
in processes and people - more so even than the technology. Today’s CPG companies often carry out their processes inconsistently and place too much faith in the reliability of off-line planning tools such as spreadsheets. They may also find their ERP TPM doesn’t support their sales needs since it was built for financial record keeping.
Here are three best practices that sales departments should apply to enhance customer planning:
Plan for Your Best Customers
One of the most effective things to do is set up a workflow based on your customer type. Leading-edge CPG organizations segment their customer base by strategic accounts, growth accounts and maintain accounts. Different attributes impact each account type.
By segmenting in this way, allocation of efforts and budget is focused on revenue and trade spending. This is why plans for each segment must be planned drastically different. With this level of segmentation, you can determine how to allocate your efforts and budget for the biggest impact on revenue and trade spending. Planning needs to be drastically different for each segment.
Evaluate the Maturity of Your TPM Program
If you are not satisfied with your current sales planning process, start by evaluating the maturity of your TPM program. Here are benchmarks observed at many CPG organizations:
- Point TPM: At this level, you typically see organizational reliance on stand-alone planning and execution tools, poor governance, and limited and inconsistent use of trade spend analysis and data manipulation.
- Integrated TPM: At this level, there is end-to-end process support on a single platform used for planning. It is coordinated by a central team that has a defined governance structure, utilizes best practices, and is focused on the timeliness of data.
- Closed-loop TPM: At this level, an end-to-end process is supported by systematic promotional analysis, modeling and an outcomes-based approach.
- Optimized TPM: At this level, you are using predictive analytics to drive your decision-making.
Regardless of what level of maturity you might have achieved, be cognizant of the best practices used in the CPG industry: leverage resources based on criteria associated with each retailer trading partner. This is truly unique in a sense that “emotion” is being removed from the equation, while analytical rigor is introduced.
Align Your TPM Systems to Meet Your Needs
To have a successful TPM initiative, there must also be an easy-to-use, but powerful system in place to support people and processes. Whether crafting a solution or evaluating an existing system, take into account the following:
- Integrate all data
- Provide a workflow capability that aligns to your team’s usage and segmentation needs
- Embed analytics and sales intelligence
- Integrate seamlessly with other TPM systems, such as your ERP
- Replace all offline tools.
This article was supplied by AFS Technologies, a global end-to-end solution provider to the Food & Beverage and CPG Retail industry.
For more information: www.afsi.com.
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