5 Goals CPG Executives Can Accomplish With a TPO

Topics: Leadership, Management, Predictive Analytics

For many CPG companies analytics is an interest that never evolves into action. This is due to the thinking that adopting analytics will be a significant change in how the company operates resulting in greater expenses, greater resources and greater headaches without tangible results. 

However, the reality is that most companies are not seeing the results that they want from their trade investment largely due to a lack of tangible insight, and as a result is a prime opportunity to be innovative without significant disruption. Implementing an analytically-focused Trade Promotion Optimization Solution can be the key to finally accomplishing the organizational objectives that have always been just out of reach. In doing so, companies will see that moving the data they already have to quantifiable insight to profitable action is innately embedded in how the solution supports revenue growth management.pexels-photo-59197-large-2.jpeg

No longer is trade promotion an area of guessing and fear of the future. With a TPO solution, companies can make informed, intelligent decisions while empowering employees and communicating effectively with retailers. While adopting a TPO solution will improve day-to-day processes, the executive team will benefit from:

Aligning trade investment to corporate initiatives

Without the ability to quantify ROI during post-event analysis or planning, there is no way to see if promotional activity is meeting company goals. Currently, many companies set objectives such as cutting trade spending by a certain percentage without affecting revenue, but they have no way to plan against these constraints or to evaluate their success. A TPO solution allows your trade and sales team to see the results of changing spending on a promotional customer plan and the result. It also provides a predictive rollup view of the trade investment for executives, enabling them to evaluate the overall trade strategy, set guardrails and monitor progress.

Monitoring and Quantifying ROI of trade investment

Companies are unable to quantify ROI because they lack the ability to harmonize POS, shipment and spending data giving them visibility to promotional performance. A TPO solution pulls back the curtains by giving not only a historical view of past promotions, but a real-time view of current promotions and their performance. This allows companies to quantify ROI and in turn, better plan next year’s trade investment to maximize revenue, volume, or profit. This means that companies are no longer waiting until the end of the quarter to scramble for an understanding of why results didn’t meet expectations. They now can know more, in real-time facilitating the ability to develop an accurate adjusted plan of action that accomplishes optimal corporate objectives.

"No longer is trade promotion an area of guessing and fear of the future."

Gaining competitive insight and advantage

No matter the industry, every company wants a competitive advantage, but in the CPG world, companies struggle to achieve this due to a lack of comparative insight into competitor promotions. But with a TPO Solution, CPG companies can accurately monitor competitive promotions both as a comparison to their own activity and identify competitive trade promotion strategies/tactics. This competitive visibility plays a key role in strategic planning, enabling the company to develop an optimal customer annual plan

Aligning with retail partners (who are already using predictive analytics)

More retailers are using predictive analytics. This can further widen that gap between manufacturer and retailer because now the retailer is going to want to make strategic moves that may not line up with what the manufacturer expects. However, when a manufacturer also uses predictive analytics, they can share their intelligent data with retailers, including retailer KPIs, and then collaboratively create an optimized plan that meets both retailer and manufacturer goals. With this true joint business planning capability trust between the manufacturer and retailer is significantly increased as well as a mutual ROI on the annual trade spend.

Empowering teams to make decisions that impact revenue generation

In most departments executives tend to be pulled in multiple directions for funding. This creates contention between each of those departments because they are working against each other toward individual goals rather than seeing how collective decisions impact the corporate objective. However, a TPO Solution can break down departmental communication walls allowing performance visibility and strategic input necessary to attain corporate objectives.

"Implementing an analytically-focused Trade Promotion Optimization Solution can be the key
to finally accomplishing the organizational objectives that have always been just out of reach."

It is no longer enough to make analytics  a “corporate priority” that your organization will eventually get around to. CPG executives need to drive revenue growth management practices throughout an organization by emphasizing the necessity of data-driven, results-focused decision making and empower their teams with the insight to create actions that positively impact the business. It is not only the C-level’s responsibility to set the direction of company goals, but also to support /demand the change management that achieves these goals.

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