What is Trade Promotion Management?

Trade promotions are a key component of the marketing mix for nearly all consumer brands. A promotion is typically planned to offer a product to consumers at a discount with the intention to raise demand for a specific product or line. 

Without an effective strategy, however, businesses risk the chance of not delivering profitable results or meeting KPIs. That’s where trade promotion management comes in, so that businesses effectively track their results to drive profitable outcomes, learn from past promotions, and apply those learnings to future ones. The process is even more powerful when AI and ML modeling are applied in a trade promotion optimization (TPO) process. Trade promotion management, when done correctly, also delivers a full cycle of financial accountability and reconciliation.

Trade promotion management, in a nutshell 

Trade promotion management (TPM) in the CPG industry describes the process of budgeting, planning, and reconciling a company's trade spending, with the aim of driving sales and profitability while increasing the productivity of sales and finance personnel.

Trade promotion management software

Traditionally, many CPG companies have managed promotions from various spreadsheets with little to no integration across systems. This method can be hard to keep track of, especially when data isn’t automatically updated. 

Today, more companies are making the switch from manual, time-intensive processes, to account planning that is automated and accurate. The use of the right TPM solution can help you manage all your complex distributor relationships, trade arrangements, and reconciliations. This will help you increase your efficiency to achieve better results, boost your ROI and do the following: 

Spend less time on manual work

When your sales 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 and more importantly – more time selling to customers. Similarly, the finance team should be spending their time analyzing data for success, and less time compiling and verifying data.

Stay competitive and agile

The right system can help you change, replan and re-roll forecasts quickly and align on one source of truth across all stakeholders - sales, trade development, finance, and revenue growth management. 

Effectively set financial targets

The right trade promotion management software should allow you to use your historical spending to set goals. This will give you the framework necessary to optimize your trade promotion efforts and reach financial targets. 

Planning for the future of trade promotion management

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 allows you to add more capabilities as your organizations' needs require, a system that can grow with you both in business capabilities as well as systems and integration capacity.

Base and uplift factors feed TPM, but if you change pricing, base projections will also change, affecting your overall trade spend plan. Managing the interrelationships in one solution suite can help your organization be nimbler and make smarter decisions..

If you’re looking to invest in a trade promotion management software, you’ll  need to consider the following factors in a vendor:

1. Size of vendor: Some vendors may just be too small - make sure the vendor has a stable of ongoing clients, low churn and financial strength. It can be good to be a big fish in a small pond, but you don’t want to outgrow the pond either!
   
   
2. Tech stack and platform with:
   • Multi-language and multi-currency capabilities
   • Open APIs for easy integration 
   • A high level of configurability (so you aren’t always paying for customizations)
     
     
3. In-house artificial intelligence and machine learning capabilities: Machine learning is the driving force behind using historical data to make accurate predictions for future promotions. It falls under the umbrella of artificial intelligence (AI), which uses predictive patterns to help you enhance the functions of your promotions, like automating forecasting of inventory needs and optimizing the supply chain. 

Get 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, 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. Get in touch with us today to learn more.