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When it comes to running a successful consumer packaged goods (CPG) company, effective planning is critical, and at the core of this planning is accurate sales and spend forecasting. With accurate trade promotion forecasting, you can allocate resources wisely, create more targeted marketing campaigns, and drive sales more efficiently.
The role of advanced trade promotion execution (TPx) software, like CPGvision, in gaining forecast accuracy cannot be overstated. These tools bring precision to planning promotions and forecasting sales on both an everyday and promoted basis by using data analytics and machine learning (ML) to predict future sales.
So, let’s explore how using trade promotion management (TPM) tools is not just beneficial but necessary for staying competitive. We'll also explore how our planning promotions and forecasting capabilities can transform your approach, helping your brand not just meet the market demands but also excel in them.
Forecasting involves predicting the outcomes of activities to help businesses make better decisions. Trade promotions have a large impact on forecasting. Due to the high spikes in volume driven by trade promotions, accurately forecasting outcomes is crucial. This ensures that the organization is well-informed about how much product is needed and where it should be distributed. Accurate planning of promotions and forecasting is key to successful business operations in the CPG industry for several reasons:
The impact of getting forecasts wrong can be serious. Poor forecasting can result in inefficient resource use and a weaker position in the competitive market——definitely something you want to avoid!
In the past, trade promotion forecasting primarily depended on analyzing historical sales data manually, a method that often fell short in rapidly changing markets. According to a Gartner Report, about 59% of companies continue to use basic spreadsheets for this purpose, leading to challenges such as limited visibility, inflexibility, and difficulties in data analysis. Modern forecasting techniques have evolved to address these issues, utilizing advanced algorithms and real-time data to offer a more accurate and dynamic understanding of market trends.
This traditional approach has several drawbacks in today's market:
CPGvision's TPM redefines planning promotions and forecasting in the CPG industry. At the heart of CPGvision's TPM is its use of advanced analytics and artificial intelligence (AI). This approach surpasses traditional methods by accurately predicting base and uplift factors. We rely on data science for precise predictions, moving away from the slower, error-prone method of manual input by sales staff. This results in more accurate forecasts, saves time, and reduces errors. And unlike our competitors, you don’t have to purchase our TPO to integrate our AI-driven forecasts into TPM.
Finally, traditional promotion management often misses the mark in forecasting complex market dynamics due to a lack of advanced data science. CPGvision's TPM addresses this by offering sophisticated analytics and AI insights, speeding up the process and improving the accuracy of forecasts for both base and promotional volumes.
For those in the CPG industry, CPGvision offers a practical trade promotion planning and forecasting capability that offers a unique approach, setting itself apart by forecasting both non-promoted and promoted volumes. This is a significant advantage over many traditional TPM systems. Let’s explore what this feature offers:
Improving the accuracy of sales forecasting is crucial as it positively impacts various aspects of your business, including human resources, inventory management, supply chain, warehousing, sales, marketing, and financial operations. Therefore, it's important to prioritize sales forecasting accuracy from the start.
Measuring the impact of our TPM on your forecast accuracy is a good idea as it will enable you to maximize the effectiveness of your trade promotions, optimize resource allocation, enhance customer satisfaction, and maintain a competitive edge in the market. Here are key steps and metrics commonly used to measure forecast accuracy:
By following these steps, you will be able to measure the improvements in your forecasting accuracy effectively. This is a great way to evaluate the improved performance that you will see from using a TPM like CPGvision.
As we've explored throughout this blog, the integration of trade promotion forecasting into your CPG strategy is not just a step forward—it's a leap towards transformative growth and efficiency.
With CPGvision, you gain access to a suite of tools that are specifically designed to enhance your promotional strategies, forecast accuracy, and deduction management all while increasing productivity. Whether you're looking to refine your current approach or overhaul your promotional planning entirely, CPGvision has the solution.
Don't let the complexities of planning promotions and forecasting hold you back. Our team is ready to help you unlock the full potential of your promotional activities and drive significant revenue growth. Contact us today and discover how our trade promotion software can enhance your success.
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