3 Ways Trade Spend Data Empowers Better Business
Trade spend inefficiency costs consumer goods manufacturers millions of dollars every year.
To make business operations better, companies are turning to trade promotion software to compile and dissect data. With these solutions and insights, companies can learn about their customers, workflows and finances, in real-time.
Deloitte CEO, Cathy Englebert says that there’s “an even more fundamental differentiator that will play a critical role in how companies effectively compete in the decade to come: getting the right data, extracting insights from that data, and identifying the platforms on which data can be used strategically.”
“Food and beverage companies are embracing big data and embedded analytics to optimize decision making. This requires a thoughtful approach to data analysis and information management,” Subrata Chakrabarti, Anaplan.
Studies indicate that 67% of trade promotions don’t break even, and 28% of CPG executives believe their trade promotion performance to be totally ineffective or in need of significant improvement.
But, if you aren’t compiling and analyzing volume and margin data, how can you truly evaluate performance?
An Accenture survey discovered that 6 in 10 CPG company executives believe their technology investments have produced data that could generate actionable decisions and improve trade promotions.
Understanding volume, program commitment, pricing, and settlement metrics is a key difference in the meaningful evaluation of trade ROI. Armed with trade spend software, CPG companies can extract data and test scenarios to validate profitability and program performance. Software also enables automated correspondence with customers and approval process efficiency.
Because there is so much information available from internal and external sources, many companies are manually mining it and struggling to collect insights. Our appetite for data consumption will continue to grow, since more data indicates a more complete picture of nuanced business dynamics. The need to efficiently manage data will continue to grow, too.
“The ability to connect data and analytics across the business can help food and beverage companies track shifting priorities among segments of consumers. A company that can connect such parameters and preferences into their planning and decision making process stands to profit tremendously,” Chakrabrti said.
How can you use data to improve trade deals?
- Validate and collaborate
- Provide access to data across functions in your organization so the right employees are aware of the right steps in the workflow.
- Review datasets – Consider past program performance, available budget and product demand to understand a deal’s effectiveness.
- Align with customers
- Calculate profitability on an account-by-account, SKU-by-SKU basis.
- Know what your customer’s strategy is and see how your products can support it.
- Keep the category management team involved.
- Develop insights
- Assemble a program-creation best practice document, to make faster, better decisions.
- Combine financial and consumption data to calculate ROI and profitability.
Trade promotion applications deliver actionable metrics for manufacturers to improve business operations. Automated workflows and payments, inclusive program creation, visibility across data fields, and margin accuracy are functions that allow businesses to improve their trade deals, which will improve the bottom line. Companies that successfully implement optimized trade practices spend less time and fewer resources to demonstrate trade fund ROI.
Leading consumer goods manufacturers aren’t spending more, they’re spending smarter; they’re looking at metrics to obtain margin visibility, spending control and deal profitability.
