Promotion analysis: How to measure the success of a promotion

Here's how to dig into promotion analysis to effectively measure the success of a promotion

How to Accurately Measure the Success of a Promotion

Promotions that don’t grow brand and category sales are considered ineffective. Therefore, Consumer Goods manufacturers are equipped with an abundance of real-time tools and proven technology solutions to know right away if a trade promotion is working or not.  An arsenal of rich business intelligence is also placed at the manufacturers’ fingertips to know exactly how to get the most out of the promotions that do work. It sounds like manufacturers have finally figured out the formula to properly manage trade promotions.

Are you sensing the sarcasm?  Despite a proven solution, manufacturers from every product category, be it durables, personal care, snacks or electronics, continue executing poor performing promotions and then act bewildered as to why the event didn’t turn a profit.

Every industry veteran will agree trade promotion funds are difficult to effectively manage. Difficult, yes. Impossible, no.  The difficulty level significantly decreases when CG companies invest in an integrated approach that can effectively track and analyze all the factors required to accurately measure a trade promotion program’s true success.

Ask yourself 3 questions:

  1. Can you account for all costs related to every promotion? When evaluating promotion effectiveness, you can clearly see deductions, missed sales due to out-of-stocks, retailer fees, scan down rate, off-invoice rebates, fixed costs, etc. in one place.
  2. Can you review the execution of your promotion in real-time? You have never missed an opportunity with retail partners because you can adjust promotions on the spot and communicate changes to the team immediately.
  3. Can you evaluate your promotion’s success by retailer, distributor, and broker? Each player in your supply chain factors into the success or failure of a promotion and you can say with complete confidence who is helping or hindering your profitability.

If you answered “no” to any of these questions, it’s no surprise managing promotion effectiveness is an impossible and frustrating task.  Here’s one more question to think about: What are you going to do about it?

CPGToolBox offers a fully integrated, digital TPM solution that allows manufacturers to evaluate promotion effectiveness throughout the supply chain and in real-time.

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