The 2 Metrics Every CPG Professional Should Consider For Successful Growth

One of the realizations that trade promotion teams experience upon implementing a Trade Promotion Optimization solution is the visibility to a wide range of metrics that were not possible before. Determining what metrics an organization should pay attention to depends on what objective they are trying to reach.

So, which metrics matter most?

Like with any access to new information, trying to digest all the data at once means that you are probably not using any of it well. In the  case of Trade Promotion Optimization, start with the metric that fulfills a current hole and expand from there. 

1) Incremental revenue, volume and profit

Most experts agree that incremental revenue and profit is the greatest indicator of trade promotion spending success. With a Trade Promotion Optimization solution that calculates the ROI of promotional events, you can not only determine whether a promotion was profitable, but also whether the lift during a promotion met expectations. Furthermore, the ability to monitor base volume over time and deliver real-time organization-specific KPIs, as well as incremental revenue, volume and profit, serve as a barometer for long-term growth.

Couple this with overlays of consumer spending and competitive events, and you have both a measure of event success and an indication of the factors that influence it.

2) Historical and Predictive Lift Indexes

Growth is not just an outcome of analysis, but with a Trade Promotion Optimization solution that has predictive analytics, growth is a primary consideration during planning. Have you ever wondered what the results would be if you could make one change to one promotion for one customer? Visibility to both historical and predictive lift indexes creates the opportunity to consider projected growth during the planning process. With this ability, you can put growth measures at the center of your planning measures by making adjustments to a planned event to optimize for revenue, profit or volume.

It is crucial to remember that the purpose of monitoring a metric is only as valuable as your ability to act on your findings. Using defined metrics will not only inform you about your current plans and practices, but empower you with the intelligence to act.

Like these metrics but want to read more? Download our whitepaper: A Trade Marketer's Guide to Strategy Optimization. 

 


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