How many hours?…How many errors?
The trade promotion investment continues to approach the number one line item entry on a CPG P&L—cost of goods. The CPG sector is mature and the average annual trade promotion investment is averaging 20% of a CPG manufacturer’s gross revenue. Compounding this significant pain point is the fact that more than 40% of the estimated $175B trade promotion investment never reaches the consumer.
As an industry, many companies have made great strides in moving from excel based spreadsheets, to a more sophisticated approach to planning and reconciliation of the trade spend to specific trade promotion events. These trade promotion software solutions provide an accurate financial reconciliation of the significant trade spend, but fall short in providing real time analytical capability regarding the causal effects of successful and unsuccessful promotion tactics. There has been very little progress made to “de-silo-ize” the disparate sources of rich business intelligence that reside in various operating areas of a CPG company. Any analysis being done today, in the multitude of CPG companies, is the result of a manually intensive spreadsheet process that takes information from as many as 5 key business intelligence sources and combines them into a macro formula spreadsheet review. With this process we need to ask ourselves “How many hours and how many errors are imbedded in this tedious process?” The combination of evolving technology and existing predictive analytics and optimization models can cost-effectively be employed to eliminate this manually intensive and inaccurate analysis of the trade promotion investment.
The addition of the T-Pro Analytics predictive analytics solution tightly integrated to your existing trade promotion management solution, will improve your field planning accuracy and your post event analysis substantially. In addition to planning and evaluating your trade promotion investment more accurately. The T-Pro Analytics solution will make the planning process easier for the field sales personnel by providing automated access to accurate baselines and lift coefficients that feed the “What If” planning portal. The T-Pro Analytics “What If” planning portal can quickly develop prospective planned events and provide an accurate incremental profit and volume estimate recap of that event. In addition to the individual event planning capability, T-Pro Analytics can easily duplicate that event to different time periods and automatically calculate the base turn volume estimate, after the period plan is complete. This base turn capability is accomplished by our CPI (Consumption to Purchase Index) methodology that takes imported invoice level feeds from the TPM solution and develops an index of IRI/Nielsen consumption vs. retailer invoice purchases. This volume differential creates an estimated forward buy, based upon specific dead net pricing offered to the retailer on a given promotion event contract. With the base turn becoming an automated function and not a “best guess” from field sales, your initial volume and profit estimates are significantly more accurate. Every time a planned event is adjusted in the “What If” planner the base turn volume is automatically recalculated and incorporated into the latest estimate of volume and profit moving forward. T-Pro Analytics also provides accurate and real time post promotion analysis for your organization, by integrating your actual invoice shipment and spending information with your syndicated POS data. The system has the ability to align the planned TPM event to the actual POS results for accurate profit and volume analysis in real time. In addition we offer our clients the opportunity to overlay in the Master Sales Analysis calendar view, all related consumer marketing activity as well as an overlay of all competitive activity from Nielsen or IRI.
This intelligence in one place, in real time, updated every 4 weeks, provides you the insight to maximize the return of your significant trade promotion investment. The T-Pro baselines and coefficients are updated every 4 weeks to provide the most accurate intelligence and sales trends in the CPG industry. System generated threshold alerts provide guidance on where to focus for possible shifts in future promotion tactic and strategy. If the combination of the manually intensive hours and errors being removed from your day to day trade promotion management in your organization, coupled with the quantified ROI you will realize from the T-Pro Analytics solution, is worth an hour of your time to take a deeper dive, please feel free to contact me at;