Effective and Efficient Management of Trade Promotion Expenditure, and ROI Optimization,
has proven Elusive and is a Top Priority with most Companies
Typical Issues that must be Addressed
Trade overspending hurts the P&L, large deduction balances and unauthorized deductions cloud the balance sheet while the optimum level and allocation of trade spending to channels and customers is an open strategic question. Trade studies show that 66% of all trade promotions do not so much as break even while 22% produce no incremental lift and historically about half do not produce the desired results. On top of this, sales organizations in many companies are spending a disproportionately high percentage of their time managing cumbersome and inefficient processes.
Benchmarks for Best Practice Trade
Our benchmarks for “Best Practice” trade spending management have proven to be excellent guidelines for companies to follow when upgrading trade promotion management capabilities.
Optimizing Trade Promotion ROI is a Top
Down/Bottom Up Process
We have considerable experience in the design of promotion management processes and implementation of ROI improvement initiatives. Every one of our clients has turned trade promotion spending from a weakness into strength. Our process for optimizing trade promotion ROI is defined as follows.
What We Do
- Assess current trade promotion strategies, management processes, practices and overall effectiveness.
- During the assessment phase we examine trade spending allocation methods and criteria, promotion planning systems, customer offer guidelines, promotion management processes, integration of trade promotion into volume forecasting and usage of post event analysis and predictive modeling tools.
- Assess the importance of trade spending as a key volume driver in relation to other marketing drivers.
- Design the overall trade promotion strategy for the company and brand specific trade promotion strategies, guidelines and best practices in terms of preferred vehicles, level of price reduction and optimum timing and frequency.
- Design the management processes and systems requirements for effective trade spending planning, management and financial controls… Our expertise in banded process mapping and design, utilizing cross functional client process teams, produces highly efficient and effective processes.
- Guide the selection and development of decision support tools.
- Determine the organization effectiveness requirements in terms of resources, skills and training.
- Select implementing and training on decision support tools for post event analysis and predictive modeling to understand and optimize the ROI of trade spending.
- We apply our change management expertise to ensure institutionalization of the changes made.
Decision Support Tools
We have experience with multiple suppliers of decision support tools for improving promotion effectiveness. We help companies evaluate approaches and options for post event analysis, predictive modeling and optimization tools. We then assist in the integration of these tools into planning systems.