Florida’s Natural Growers implemented Blacksmith’s trade promotion optimization software in 2020. The company’s Trade Promotion Manager, Justin Balke, says that through optimization, the juice company can zero-in on important metrics to create promotional wins.
“We’re able to compare promotions in seconds versus hours. The math is done for us and at our fingertips,” Justin adds.
Thanks to post-event analysis functionality within Blacksmith TPO, Justin and his team are able to
📑 See category trends
📑 Quantify COVID sales
📑 Answer 5 key questions about promotions
Post-Event Analysis (PEA) Creates Opportunities for CPGs
- Understand promotional performance
- Frame decisions based on opportunities
- Influence pricing strategies
- Share data with retail partners to create a win / win environment
What is post-event analysis? Post-event analysis or PEA, helps consumer goods companies understand the effectiveness of their promotional spend. PwC says that a strategic PEA capability offers clear benefits, specifically a better ability to evaluate promotions quantitatively and determine the tactics behind good – and bad – performance.
Negative Impact on the Category
» Florida’s Natural noticed that in Publix, one of its 52oz promotions had a significantly lower lift than other promotions of the same item, at the same price point, at the same retailer. “Thanks to the master calendar, we quickly noticed that during the same week, Tropicana was on TPR for the same price,” Justin explains. We brought this to Publix’s attention… “after all, it’s not only bad for us, but bad for the category.”
Quantify COVID Sales
» Florida’s Natural uses TPO to quantify the incremental sales gained due to COVID. “We can easily see – by retailer and product grouping – when our sales spikes happen and the amount that our volume increased,” Justin continues. Armed with this information, Florida’s Natural is able to easily forecast future years and eliminate that COVID-19 baseline bump.
The Post-Event Analysis Process
Every CPG should easily answer the 5 fundamental questions about promotional performance:
1: Did the promotion you expected to run, actually run?
2: Did you get the promotional ACV you were expecting?
3: Were your projected promotional volumes close to the actual volumes?
4: Are there competitive products that perform well with us or vice versa?
5: Was the promotion profitable?
Question 1: Did the promotion you expected to run, actually run?
Justin Balke: Yes! To see that our promotion ran, look at the master calendar (Image A).
That red line represents the average retail price.
When the red line drops below the dotted line (which represents base price), it means that the promotion ran. You can even see that the promotion ran at the price expected.
Question 2: Did you get the promotional ACV you were expecting?
Justin Balke: Drill into the details (Image B). We want to run it for 100% ACV. If we aren’t near that 100% mark, we can have the account manager go to the broker or retailer and have a conversation. When we spend our ad dollars, we want to see that incorporated in all of our stores. The ACV for the ad only promotion type was 99%. It’s safe to say that every store ran the ad.
Question 3: Were projected promotional volumes close to the actual volumes?
Justin Balke: It’s always important to compare whether your projected volumes are close to actual volumes. As part of the planning process, account managers build projections for all of the promotions. Those projections get locked in so we can see how close the account manager is to actuals. We can see when the promotion runs, how close the account manager is to actuals.
With this promotion, the projections were much higher than actual results. Of course, you have to wonder why…
Since Blacksmith TPO layers in competitor data, you can drill into the details (Image C) to learn that the same week we had less-than-stellar lifts, the competitor was promoting too. Immediately, you can see that when more than one big brand promotes at the same time, the category does not perform well.
Question 4: Are there competitive products that perform well with us or vice versa?
Justin Balke: We’ve loaded our competitive data into Blacksmith TPO master calendar. We can constantly see when our competitors (Tropicana and Simply) run promotions the promotional ACV and price points they have. We compare it… did we run a promotion at the same time? How did we perform?
Question 5: Was the promotion profitable?
Justin Balke: For us, ROI isn’t the only KPI we look at, but we can use ROI as a baseline to other other price points. For example if we run a 2 for $6 promotion and get an ROI of 25.. or run a 2 for $5 and get an ROI of 50, we’ll use that data to forecast for future use.
Conducting Post-Event Analysis
Before Blacksmith TPO, “we did PEA the wrong way,” Justin says. “We would look at lift indexes, expected retail prices… but if they weren’t what we thought, we chalked it up to extra data. We had a lot of different teams looking at this too.”
Post-event analysis is not simply looking at syndicated data reports. It’s not comparing what you shipped versus consumption.
It is about visibility, accountability, verification, and collaboration.
At Florida’s Natural, post-event analysis “is absolutely a team effort,” says Justin. “We run 1 – 2 promotions per month, and perform PEA at least every 4 weeks.”
Through PEA, CPGs gather deep insights and ensure promotions were executed as planned.
You can determine if the promotion reached your goal. You can evaluate what worked, and what didn’t by comparing forecasted volume to actual shipments and true consumption. Meet with your retail partners to let data guide your conversations.