Come Together: How Trade Promotion Optimization Unites People and Processes

Topics: Optimization, Leadership

Two of the biggest sources of contention within CPG companies revolve around internal competing views of business health and miscommunication between manufacturer and retailer. Due to redundant manual data entries in Excel spreadsheets and lack of visibility into one database, separate departments have different ideas on how to approach future planning. Similarly, without quantified predictions of retailer KPIs and post-event analysis showing promotion execution, retailers are hesitant to alter plans from last year and are also reluctant to trust a manufacturer based on uncalculated risk.

All of this adds together to create a web of miscommunication, both internally and externally, that prevents CPG manufacturers from achieving objectives and successfully executing plans. However, with a Trade Promotion Optimization solution, manufacturers can break down barriers between departments and with retailers, allowing for better communication and visibility inside and out.

Start with introspection


In today’s collaborative marketing environment, success won’t come simply by adopting a TPO solution. While the analytics are important, they won’t reach their full potential if the people using them remain on different pages.

In other words, sales, marketing and finance teams need to be united and have access to one view of the truth. This visibility means that sales teams are not going to retailers with different plans than what trade teams came up with and finance teams aren’t wondering why revenue goals aren’t being met despite clearly defined budgets and targets. A TPO solution allows this by becoming the single intelligence center, where everyone can turn to see the results of the past and also the impact of decisions on the future. It begins with harmonizing data to eliminate inaccuracy and then providing real-time post-event analytics that allow for adjustments as needed. The ability to make these adjustments based on quantified results means that teams can increase the accuracy and effectiveness of their plans and with visibility to the present as well as the future, teams can react progressively rather than retroactively. These quantified insights about the company’s trade investment can then help company executives in developing a more sound strategy. However, without the executive team valuing the importance of these contributions, the benefits of the insights are lost.

Looking outwards

Once internal teams are successfully working together rather than against each other, companies need to look to their outside retail partners. Currently, many manufacturers find themselves struggling with retail execution because communication with retailers is unclear, thus retailers often deviate from manufacturers plans to meet their own KPIs. This creates distrust in the manufacturer-retailer relationship. This does not have to be an issue in a best in class TPO environment, though. A TPO solution allows manufacturers to not only develop optimized plans for their revenue, volume and profit targets but also can optimize to the retailers category objectives. This capability truly fosters the joint business planning environment between manufacturer and retailer as opposed to just talking about it.

Without a TPO solution, companies cannot hope to quickly and successfully improve poor retail execution as well as internal collaboration. It is not enough to continue operating on old, slow and inaccurate methods. Those who do will find themselves not only left behind by manufacturer competition, but by their own retail partners as well, as more and more manufacturers and retailers begin adopting predictive analytics solutions. For CPG companies to operate as well-oiled machines, they will need the help of a TPO solution to break down communication barriers between internal teams as well as with retailers.

What to read next: CPG Companies Need to Break Up Not Only Data Siloes, But People Siloes to Have Successful Strategy

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