Trade promotion management (TPM) is quickly becoming one of the highest priorities within CPG organizations since it’s the second-largest item on the P&L. Consumer goods manufacturers assess operator and trade programs, processes and systems due to concerns about the value and return on investment of trade dollars. An HPM survey says that trade spending has tripled in the past two decades globally.
We can all agree that managing your trade dollars is complex; generating exact monetary figures, attaining approvals, sharing information across internal departments. Efficiently managing trade spend is a shared challenge of CPG companies. According to Booz & Company, trade spend accounts for as much as 25% of gross sales for many CPG companies. The significant amount of revenue spent on promotions with operators and distributors are designed to boost revenue and increase product and market share.
Using TPM technology to create trade programs enables companies to contain costs, gain visibility and report accurately on profitability. Your organization needs a SaaS solution with functionality that permits you to control and examine your trade dollars.
Each department within a company prioritizes different TPM system functions — the sales team needs software that calculates P&L with the exact trade program rates, the IT team demands secure software that integrates with the company’s other applications, the finance team wants visibility into workflows and prices, and leadership looks for software with straightforward RFAs and easy-to-use search features. And all departments within a company prioritize actionable insights from analytics and reporting. With functional reporting, users can run smooth routing of transactions and review spending versus commitment among programs.
Increasing trade spend effectiveness and automating operator and distributor trade programs means creating profitable opportunities for your organization. When you implement the right trade software, everyone feels the benefits: sales gain the tools they need to forecast profitability, IT sees successful data integration, and finance can process payments and credits with tools to manage deductions.