A comprehensive guide to TPM solutions for CPG companies

Learn about the importance of TPM solutions in this comprehensive guide to nimbly react to changing conditions.

For decades, CPG companies have struggled to drive efficiency and leverage the right tools in trade promotion processes. These tools often don’t produce the results you’re looking for. To make things worse, your team might still depend on Excel as their key TPM solution to make sense of data. You know this process is outdated and siloed, but how do you find the solution that works the best for your goals and vision?   

Now more than ever, CPG companies are under extreme pressure. With an acceleration in consumer behavior shifts in COVID-19, to current supply chain issues and inflation, managing the value equation is more difficult than ever. 

That’s why it’s more important than ever to look to solutions that allow you to react nimbly to changing conditions. This also means kicking clunky spreadsheets and outdated tools to the curb and re-imagining how your organization goes to market with its trade customers. 

What is trade promotion management?

Trade promotion management (TPM) for CPG businesses is a strategy to enhance the sales and profitability of products through planning, management, and execution. TPM includes all aspects of marketing that are aimed at helping products reach buyers through intermediaries such as retailers, dealers, or wholesalers.

TPM also entails the application of business processes and technology to the planning, management, execution, and analysis of trade promotions with the goal of optimizing trade promotion investment. This will help in achieving desired business outcomes such as increased market share, improved gross margin, or increased return on investment.

Trade promotion management solutions

A well-planned and executed trade promotion strategy helps facilitate an increase in both sales and customer loyalty. That’s why it’s important to find a solution that makes it easy for your brand to drive growth and systematically manage, adjust, and optimize your promotions. 

Here are the key components of an ideal trade promotion management solution:

Fully transparent account planning and budgeting

To ensure convergence between sales, marketing, and finance, a TPM solution should provide users across all teams visibility into all promotions, the full account plan, and P&L. This will make the planning efficient across departments.

It’s best to opt for a solution that has an intuitive, but powerful UI to make it easy for all teams to access and make for frictionless onboarding. Capabilities within the system should include single and multi- promotion cloning and annual plan cloning. This will ensure that you spend less time inputting and more time analyzing and improving plans. 

Deduction management 

The solution should also incorporate auto-settlements functionality for greater productivity among your accounts receivable team. 

Having an automated process in place will help your team clear deductions more efficiently. The AR staff should be spending their time on exceptions, while the bulk of deductions is cleared in a more automated fashion. This will allow you to reduce deduction aging and improve validation rates.

Consumption and shipment forecasting

Your account planning should also provide both promotional and non-promotional volume for a complete consumption plan, where you can easily lag and modify to account for shipment timing.

As a result, your team will spend less time manually analyzing data in their siloed systems and increase forecast accuracy based on an up-to-date and real-time model.

Funding commitment and accruals

TPM solutions should allow the user to make financial commitments at the promotion level. This allows the system to take the burden of spreading the liability to the granular level (products, accounts, and weeks). This will allow a view of liability at any level of the account and product hierarchy. 

Intuitive reports and dashboards

Your TPM solution should provide you with clear and actionable insights. This should include reports with key activities related to campaign performance, spend analysis, and trade promotion effectiveness. 

This will help your team react quickly to see what’s working and what isn’t, so you can adjust accordingly to drive positive outcomes. In order to act on these reports, the solution should have an intuitive and user-friendly interface to help manage all of your complex distributor relationships and trade arrangements. 

Along with intuitive reports and dashboards, your TPM solution should also have a customer service team backed by years of experience. This means you should have support from true CPG industry expertise, from development, implementation, and beyond. 

What can the right TPM solution do for your business? 

The use of the right TPM solution can help you manage all your complex distributor relationships, trade arrangements, and reconciliations. In the end, this will help you increase your efficiency to achieve better results and boost your ROI. The right TPM solution will do the following for your business:

Spend less time on manual work

The right TPM solution generates accurate sales and spend forecasts, manages your monthly accrual process, utilizes spend budgets more effectively, and is simple and easy for your sales team to use. 

With a solution that does the heavy lifting for you, you can get down to the granularity of planning and data without working at a granular level. This means you and your team will spend less time inputting data and more time taking action on intelligence. 

Stay competitive and agile

When your team isn’t tied to spreadsheets and manually inputting and extracting data across different systems, they’ll spend less time tied to their desks and more time acting on the data. This means you won’t only be improving your performance, but your team will have more time to interact with clients. It also allows your team to align on one source of truth across every department. This gives you always up-to-date automated and reliable data. 

Plan for the future

At some point, your organization will want to look beyond TPM. Whether TPO and RGM are in your plan immediately or somewhere down the road, make sure you are implementing a solution suite that works together. 

Your RGM functions are related, your solutions should be too and talk to one another. Base and uplift factors feed TPM, but if you change pricing, base projections will also change, affecting your overall trade spend. Managing the interrelationships in one solution suite can help your organization be more nimble, and make smarter decisions. Regardless, you should ensure your TPM has the ability to grow with your organization.

Ready-to-use trade promotion intelligence at your fingertips

Meet CPGvision: the best-in-class fully connected and integrated 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, RGM, and beyond. 

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. Get in touch with us today to learn more.

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