TPM

How to Implement Trade Promotion Management Software At Your CPG Company

Discover key steps to successfully implement Trade Promotion Management (TPM) software for more efficient trade promotions in your CPG company.

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Implementing a trade promotion management system is crucial for Consumer Goods companies to survive in the competitive retail landscape. However, the path to a successful TPM software implementation can be challenging. In this guide, we'll explore the key aspects and steps to ensure your CPG business successfully implements a trade promotion management system.

The Need for Better Trade Promotions

In the most recent POI survey, only 16% of GPC companies said they were satisfied with their ability to manage trade promotions. 16% - satisfaction with the ability to manage the second largest spend line in most CPGs.

A Trade Promotion Management (TPM) system becomes imperative for a business when it encounters several key triggers. Legacy systems may no longer be sustainable due to limitations in patching, and as the business grows in complexity, existing systems may struggle to accommodate all the necessary factors.

Increased sales, wider distribution networks, and higher spending requirements can necessitate the accuracy, collaboration, transparency, and accountability that TPM provides. An unsuccessful audit can also serve as a compelling reason to adopt TPM.

Furthermore, as an organization expands, the involvement of multiple teams and complex processes can outgrow the capabilities of manual systems like Excel and Google Sheets. Signs such as heavy reliance on numerous spreadsheets and processes indicate that it's time to implement a TPM solution.

To identify the right time to implement a TPM solution, consider the following:

  • Assess your data: Begin by collecting and cleaning relevant data from legacy systems and spreadsheets, including master data, sell-through data, and sell-out data.
  • Level of trade investment: Consider implementing TPM when trade spending reaches a certain threshold (e.g., $10-20 million), as even small improvements can result in significant ROI.
  • Alignment with internal resources: Ensure that key stakeholders, including IT, sales, finance, and others, are aligned with the change and have the necessary resources for implementation.

You may also be interested in how Fruit of the Loom boosted its TPM with CPG.

Is Your Organization Ready for TPM Software?

Before embarking on the implementation journey, it's crucial to ensure your organization is ready for the change. Follow these steps:

  • Build consensus among key stakeholders: Gather support from IT, Finance, Sales, Sales Ops, and other relevant departments. Address their needs and concerns in your RFP.
  • Determine the budget: Have a range of acceptable spend in mind, along with an understanding of where the budget will come from.
  • Prepare your data house: TPM systems require robust data. Gather master and historical data, including accounts, products, pricing, and sales data.

Once you have enough data to make a decision, here's what you must do to ensure successful implementation.

How to Implement Trade Promotion Management (TPM) Software

1. Choose the Right TPM Solution

Selecting the right TPM vendor is crucial for a successful implementation. Tailor your approach based on your business goals and needs, and work closely with your chosen vendor to ensure a smooth transition. Here's what to keep in mind:

  • The approach: Recognize that one size does not fit all. Align the TPM implementation approach with your specific business objectives, expected results, and vision of success.
  • Get it right from the start: Set clear expectations and work with your TPM vendor to build standard operating procedures (SOPs) that match your unique business requirements.
  • Drive user adoption: Focus on scalability, reliability, accuracy, and best practices in collaboration with your TPM vendor to ensure strong user adoption.
  • Support the implementation: Look for vendors offering clear documentation, excellent customer support, hands-on training, and a user-friendly interface. Ensure your vendor provides ongoing support even after implementation.

2. Select the Right TPM Vendor

With many potential partners out there, selecting the right TPM vendor can be a heavy task, but a well-defined process can make it smoother. Follow these steps:

  • Define pain points and objectives: Understand the requirements and concerns of each department, and define your budget.
  • Create a project team: Include trusted team members from sales, finance, operations, etc., to lead the project.
  • Outline project scope and objectives: Consider factors like the go-live time frame and the number of users.
  • Research the market: Check industry resources, vendor websites, software review sites, and consult with colleagues at CPG companies for insights.
  • Produce an RFP document: Create a document that allows for easy comparison of TPM vendors' capabilities and pricing. You can use a template for this.
  • Demo your top vendors: Select 2-3 TPM vendors and thoroughly evaluate their attributes and information with a demo.
  • Make a final decision: Collate all your information and select the TPM vendor that best fits your business needs.

3. Build a Business Case for TPM Adoption

Quantifying the benefits of TPM adoption and convincing stakeholders of its necessity is key. Use the following facts to build a compelling business case:

  • TPM software can improve promotion effectiveness and efficiency, potentially leading to significant ROI.
  • It facilitates promotion planning, ensuring coordination and approval workflows.
  • TPM software can automate deduction management, reducing accrual liability and AR aging.

TPM ROI calculator 

Quantify the ROI of forecast accuracy and other elements of our platform with our free ROI calculator.

 

Did you know Finance departments are the new driving force of trade spend projects?

Finance departments have become central to trade spend projects, taking on the responsibility of closely monitoring and managing expenditures, down to the account, SKU, and week levels, thanks to advanced trade promotion management solutions. In contrast to traditional brand-level trade spending tracked with Excel formulas, these solutions provide a more profound financial understanding, facilitating ROI analysis, assortment optimization, and accurate accruals to the general ledger.

However, conflicts can arise between sales and finance departments due to differing objectives. While finance aims to ensure profitability, efficient spending, and proper accounting for deductions, sales may prioritize autonomy in fund allocation. Despite resistance, implementing comprehensive trade promotion management systems can potentially boost the bottom line by up to 10%, aligning the goals of both departments and promoting greater efficiency and financial viability in trade promotions.

4. Ensure Successful Trade Promotion Management (TPM) Software User Adoption

User adoption is key to the success of your TPM system implementation. Prepare your team for the switch from spreadsheets to software by actively communicating the benefits and defining success.

  • Select a change management leader: Appoint a strong leader dedicated to managing the change process. Understand that change can be challenging but necessary. Setting SMART goals and KPIs, ensuring new processes are followed, and motivating your team are essential components of effective change management. A bottom-up approach can help your organization adapt before involving the executive level.
  • Actively communicate the benefits: Use real data to showcase the advantages of the TPM system. Secure support from key stakeholders and team members by clearly communicating the program's benefits and addressing potential challenges.
  • Have a plan: Clearly define your goals and what success means for your business.
  • Implement a phased approach: Recognize that every business is unique. Implementing an MVP (Minimum Viable Product) or phased approach allows you to launch the software, identify areas that require adjustment, and align it with your specific processes and revenue goals.

5. Ensure Continuous Improvement and User Support

After the TPM system is implemented, focus on continuous improvement and ongoing user support to ensure long-term success.

  • Monitor and adjust: Monitor user activity and adjust SOPs as needed. Implement feedback from your team to enhance the user experience.
  • Usage reporting: Track user logins and promotion creation to identify those who may need additional support.
  • Post-planning recap: Gather feedback from users after the first planning cycle to make improvements based on their experiences.

Implementing an effective Trade Promotion Management system in your CPG company is a strategic move to streamline trade promotions, enhance financial understanding, and drive profitability. By following these comprehensive steps and collaborating with the right TPM vendor, you can ensure a successful implementation and long-term success in the competitive CPG industry.

CPGvision is The Most Comprehensive TPM and TPO Software for the CPG Industry

CPGvision is a best-in-class, fully connected, and integrated TPM, TPO, 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. Contact us today for a consultation.

Our proven implementation Methodology for Trade Promotion Management (TPM) System

Here at CPGvision, we have developed an implementation methodology that takes all of this into account and ensures the successful implementation of our solutions.

The key parts of our successful methodology are:

  • Experienced team: We offer a dedicated implementation team with extensive experience in implementing TPM solutions for CPG companies.
  • Tailored implementation plan: Our customized implementation guide reflects your unique needs, outlining tasks, milestones, and resource allocation.
  • Executive orientation: We believe it's crucial for top management and their direct reports to fully comprehend the goals and benefits of the new system. We offer orientation sessions for top management and their direct reports to convey the TPM solution's goals, benefits, and implementation plan.
  • Integration with internal systems: We work together to identify which internal systems house the necessary data to support the TPM system. Our flexible interface is designed to interact with most ERP and CRM applications, such as SAP, Oracle, NetSuite, SalesForce, and more.
  • User training: Once the TPM system is populated with your trade promotion activities, events, workflows, and business rules, we create a demonstration environment for user training. Training sessions are conducted with your data and promotions, ensuring your end users are well-prepared.
  • Customer support: Post-implementation, our customer support team remains readily available to address any issues or questions that may arise as you transition to the new system. We are committed to providing ongoing support to ensure a seamless experience.

Bringing your trade promotion process into the 21st century with our advanced solutions is an important step in ensuring business success. By employing the right TPM software, you are better positioned to meet the challenges of trade promotion management and craft a distinct advantage in the ever-competitive world of the consumer goods industry.

Find out how CPGvision has implemented its TPM solutions at many CPG companies to address these shortcomings. Get in touch with our team of experts and let us help you avoid failed TPM implementation.

FAQ:

  1. What factors lead to Trade Promotion Management process failure?

Here are some possible factors that can contribute to failed TPM implementation:

  • Lack of clarity on business goals, leading to inadequate resource allocation and system misalignment with business needs.
  • Poor data quality, including incomplete or inaccurate data, resulting in incorrect forecasting and suboptimal decision-making.
  • Resistance to change among employees, hampering system adoption and reducing its effectiveness.
  • Inadequate training and support, limiting employees' ability to fully utilize the TPM system.
  • Lack of integration with other business systems, such as sales, accounting, and marketing, preventing a comprehensive view of promotion performance.
  • Over-reliance on technology without the development of effective business processes and strategies, potentially diminishing the system's benefits.

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