Learn how to cultivate strong retailer relationships and use data to drive your strategy with CPGVision's blog: Your guide to the best practices for...
Manufacturers' trade spending may account for up to 25% of gross sales, with this level of investment, deciding how to track and manage those trade funds is a serious decision. Last year, the Promotion Optimization Institute shared that 40% of respondents expect to deploy new TPM solutions. You know you need the core functionality to manage the entire planning cycle, there is more to consider. Here we'll review three factors in addition to functionality to consider when choosing a solution to ensure your TPM investment dollars are maximized.
1. Data integration and harmonization
Data is a critical input to each stage of the trade promotion lifecycle. If data is not correctly housed or maintained, day-to-day tasks like tracking trade budgets or processing deductions can become cumbersome. Even worse, business decisions can be misinformed if data is not correctly integrated or maintained.
An organization will achieve a better return on its TPM investment when data is leveraged across multiple processes. Therefore, harmonizing different data sources into a standard TPM system is critical. The ability to view, utilize and report on disparate data sources in one system lends productivity and clarity to the whole process. Harmonizing data at the lowest level (account/SKU/week) allows for complete flexibility in aligning reports to account and product hierarchies.
Knowing how your existing data will integrate with the product is important. Here's an example:
If you sell an item to a distributor, who then resells it to a retailer, you will have three data sources that can be aligned to track the sales and accruals for the item: sell-in, sell-through, and sell-out data. You might use the sell-in data at the brand level for your sales forecast, the sell-out data at the promoted price group level to validate the scan cost, and the sell-through data to track distributor inventory fluctuations. You will get a complete picture at every level by aligning all the data.
A TPM solution must interact and retrieve product and customer-related data from your ERP and/or CRM applications as they are the single source for such data.
2. Ease of use
We have all had a frustrating user experience with technology. This is why ease of use is critical. A product that is difficult to use will jeopardize user satisfaction and therefore hamper adoption.
"Difficult to use" means different things to different people. Users from different digital generations adapt to software in different ways. Understanding users and how they manage day-to-day business tasks helps identify which system attributes they rely on most.
Trade promotion managers appreciate attributes that are intuitive and make their daily activities easier to accomplish. Some attributes contributing to ease of use are:
- Mass "add" and "copy/paste" buttons for product groupings, promotions, and customer account settings.
- Automated daily updates of budget tracking.
- Dynamic shipment and gross-to-net forecasting.
- Automated post-event analysis.
- In-app collaboration ability to link all messages to the TPM records they are associated with and allow cross-functional collaboration
When examining whether a TPM solution has these characteristics, evaluate how these drive reporting. Convenient reporting capabilities will boost the product's utilization. For example, trade promotion managers are more likely to use summary reports with easy-to-grasp visualizations, while exported data dumps may be used less often. Finance, however, may really appreciate the ability to download reports and data into Excel.
Dynamic reports with options to filter and compare promotions also provide managers with additional performance context. Both daily users and decision-makers across functions will appreciate easy-to-use reporting to review promotional events quickly.
Advanced TPO solutions facilitate a better user experience and limit manual data processing with artificial intelligence. For example, AI can help increase the speed of action of your data through modeled forecasting, promotional spend optimization, and base and promoted pricing decisions. The ability of a system to serve up insights and modeled information in an easy-to-use interface is the key to adopting advanced TPO solutions.
Clear scenario planning, visualizations, and on-the-fly modifications will increase adoption and speed to action. An AI-driven TPO solution that generates ML algorithms for modeling will allow you to fine-tune your scenario planning.
Overall, the AI/user experience is advantageous when it steps in where employees need it most to help make better decisions faster.
It's wise for you to consider scalability in a TPM solution regardless of the current size of your business. Growth forecasts and company ambitions will influence your future needs. If you're proactive in considering scalability, you're more likely to find a long-term TPM solution.
Imagine that a brand with a small team and small trade budget get started with distribution at a regional grocery chain. Then, the brand catches the eye of a prominent buyer at a top retailer or is granted support through an accelerator program such as Target Forward Founders. As a result, it gains national distribution. Consequently, purchase orders and production take off, as does the need for more trade management.
The TPM product that worked well for this brand last year may not remain the best option. This business needs to scale up to meet demand and manage additional promotional investments. When you find yourself at a similar decision point, the product roadmap for your TPM solution of choice should align with your growing business needs.
Scaling up capabilities comes with scaled investment levels. Consider the pricing at different business stages to identify the best long-term solution within your investment levels. A TPM representative will be able to help you find the right match.
Where to Continue Your Search?
Now that we've recapped key factors to evaluate as you explore the TPM product marketplace, you can explore and compare specific products here.
CPGvision has the industry's leading fully integrated TPM and revenue growth management solution suite. Contact us today to learn more about choosing a TPM suite that best fits your needs. Our experienced staff is happy to discuss potential solutions for your business.