Build Better Financial Guardrails

CPG companies continue to tighten their trade spend. Instead, you should emphasize matching trade promotion investment with measurable return. To position your organization for a return on trade, implement guardrails. Guardrails will protect the organization’s investment and align revenue generation objectives. Until recently, this was easier said than done.

Why is this so challenging?

Without a TPM solution in place, understanding of trade promotions lacks an accurate analysis of spending and effectiveness. Without this insight, it’s nearly impossible to put alerts in place when performance falls outside of the expected range.

Similarly, when planning without predictive promotional outcomes, you cannot apply guardrails to prevent deep discounts or over spending. Without this insight, trade promotion spending is an acceptable sunk cost — making change even more difficult.

Performance Guardrails

Adding guardrails during post-event analysis to alert your team on performance discrepancies preserves your data integrity and allows you to quickly take corrective action. For example, receive an alert when baseline performance falls out of a user defined threshold. Then, you can identify an anomaly or alarming trend. Guardrails are not limited to manufacturer performance, because real-time promotional trend analysis can also allow for the identification of execution issues, opening a fact-based dialogue with your retail partners.

Planning Guardrails

The safeguards that exist as part of post-event analysis are in place, in part, to be a catalyst for more informed decision making. However, additional guardrails instituted during the planning processes lead to optimized results, aligned with organizational initiatives and business constraints. Put guardrails in place to prevent tactical planning decisions that do not correspond with your objectives. With guardrails in place, you can continue to optimize your plan within budget while maximizing for revenue, profit or volume. Use guardrails as a competitive advantage. Gain the informed ability to quickly change tactics without losing time or wasting money.

 

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