Discover the key considerations for choosing the right TPx solution for your CPG company. Learn how the right choice can drive your trade promotion...
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TPx (Trade Promotion Execution) is considered an essential part of revenue growth management initiatives within the Consumer Packaged Goods (CPG) industry. In consumer goods companies, TPx refers to the comprehensive approach to managing, optimizing, and analyzing trade promotions at the retail level.
TPx encompasses trade promotion management, trade promotion optimization, trade promotion effectiveness, and analytics. It focuses on ensuring profitable promotions, effective sales planning, and success in trade spending, with the "x" in TPx signaling the 'expansive actions' required for these goals.
Having a unified trade promotion software that encompasses all aspects of TPx is vital as it eliminates the complexity and inefficiency of managing these functions through separate software or spreadsheets.
Why use a TPx (Trade Promotion Management & Optimization) software
Trade promotion management and optimization (TPx) is a complex endeavor. Between forecasting, planning, executing, handling payments, analyzing, and reporting results, it can be difficult to handle. Without modern tools to coordinate these disparate systems, you may end up spending too much time performing tedious manual tasks like data entry and not enough time on high-level tasks like optimizing your trade promotion strategy.
Over time, these manual processes can lead to inaccuracies and human errors that increase costs and cause headaches for your business. At the same time, less time allocated to strategy means you may miss growth opportunities due to a lack of thorough planning, market research, or analysis. Ignore these issues, and you risk your business falling behind.
In fact, industry estimates on trade promotion spend range from 10% all the way up to +20%. Whether you are at the lower or higher end of this range it is risky to manage that level of investment in disjointed spreadsheets or antiquated systems.
A consolidated TPx software ensures real-time integration, streamlined processes, and accurate data analysis. It allows for more agile decision-making, predictive planning, more control, and a holistic view of promotional performance, leading to more effective trade promotions and a competitive advantage and edge in the market.
Three signs it's time to upgrade to a trade promotion (TPx) software solution
1. Your trade promotion management lacks automation
Does your current TPM process involve many individual spreadsheets and hours of tedious data entry? You aren’t alone.
For many CPG companies, trade promotion management and optimization start out as an ad-hoc process built according to immediate sales and financial needs. As the business grows, however, this makeshift process can become unwieldy, involving dozens of spreadsheets and following DIY standard operating procedures.
In such a manual system, the TPM process becomes both labor-intensive and prone to error, which can lead to several challenges, including:
Inaccurate reports: Manual data entry errors or misalignment of parameters in your reports can lead to poor business decisions based on incorrect data.
Inefficient use of time: Manually entering data and compiling it across different sources can be time-consuming, taking away time and manpower that would otherwise be put to use creating value for your business. And the whole laborious process needs to be repeated every time something changes or there is an update.
Vulnerability due to turnover: What happens when the employee who manages your spreadsheets, or anyone in the chain, leaves the company? Your team is left spending weeks struggling to piece together the missing workflow.
Inefficient processes and workflows: If your trade promotion management solution is slowing down your processes and workflows, it could be a sign that the system is not designed to support the company's current level of activity and growth.
Limited visibility into promotions: If a company has limited visibility into the performance of its promotions, it could be a sign that the system is not providing the level of data analysis and insights needed to make informed business decisions.
If this scenario sounds familiar, it may be time to upgrade to a trade promotion management software solution that automates many of those processes. A TPx solution's highly automated workflow cuts down on human error, frees up your employees for higher-value tasks, and reduces your vulnerability to turnover, among other things. That frees your team up to spend more time taking action to maximize ROI.
2. You are expecting your business to scale
Suppose you own a pet supply company and are planning to add new product lines or extensions in the near future, such as new and improved dog beds. Or perhaps you are looking to expand to new retail customers. You acquired a new business. Or maybe you want to increase your trade promotion investment as a whole. Is your TPx process up to the task?
Inefficient processes scale inefficiently, and your TPx process is no exception.
If you are relying on a highly manual trade promotion management and optimization process, growth in your business - which should be a good thing - could lead to even more of the problems we discussed in the last section.
Beyond creating problems for just your company, though, errors in your trade promotion management (TPM) process can also affect your retail customers. For example, manufacturers that fail to accurately track trade promotions might send late or incorrect reimbursements to retailers.
Similarly, failure to communicate and coordinate with retailers throughout the TPM process can lead to inventory management issues like over- or understocking. These problems can cost retailers money and strain your relationship with them, threatening the very growth you are trying to achieve.
A TPx solution lays the groundwork for a well-organized and scalable trade promotion program. Automation and AI-supported tools make it easier to manage multiple campaigns, at a more granular level, in less time. It is especially useful if you plan to add new product lines or extensions.
On the other hand, perhaps you already have a TPx solution but it isn't sophisticated enough to scale with your business growth. If your current TPx solution cannot handle large quantities of data or manage complex promotions, then it is probably a sign it's time to upgrade your TPx.
It is also important to ensure that whatever TPx system you do have is able to integrate well with other systems that the company uses, such as CRM or ERP systems. If integration is lacking then it could be a sign that the system is not flexible enough to support your broader business processes.
3. You want to level up your reporting
Is your cumbersome manual TPx process causing you to lose visibility into your business and miss growth and optimization opportunities? Exceptional, accurate reporting can be a game changer for businesses. Here are a few reasons why:
Informed decision-making: Accurate trade promotion reports identify which promotions are most effective at driving sales, thereby allowing you to make informed decisions about which to continue, which to modify, and which to eliminate.
Better forecasting: Inaccurate forecasts can cause headaches across your business. More accurate reporting means you can better predict demand for your products and increase the accuracy of your forecasts.
Negotiating with customers: More accurate trade promotion reports allow you to demonstrate the value of your promotions to retail customers, giving you leverage when negotiating.
Ultimately, having complete mastery over your trade promotion data and then translating that knowledge into great reports will allow decision-makers throughout your company to make smarter choices that benefit your business.
A TPx software solution does that heavy lifting, eliminating the need to formulate and populate reports manually. Instead, with simple tools and an intuitive user interface, a TPx solution allows you to generate concise, actionable, high-value reports that are visually pleasing and easy to understand. That means less time preparing reports and more time acting to improve your business plan.
Meet CPGvision: A Fully Integrated Revenue Growth Management Solution for the CPG Industry
CPGvision is the best-in-class, fully connected, and integrated TPM and RGM solution suite for Consumer Packaged Goods, built on the Salesforce platform. With the most advanced functionality in the industry, CPGvision equips you with real-life problem-solving applications for TPM, TPO, and RGM.
Your success is our success - CPGvision proudly provides a dedicated customer success team staffed with CPG industry professionals. Regardless of where you are in your RGM journey, you’ll be fully equipped with the solutions you need for profitable revenue growth. Find out how we can revolutionize your business.