CPG and foodservice manufacturers are spending a significant portion of their budgets on trade promotions that aren’t effective.
Thanks to the digital SaaS marketplace, traditional methods of trade promotion have been forced to evolve. Gone are the days when you could juggle it all with Excel spreadsheets, email threads and a gut feeling.
Research from Consumer Goods Technology suggests that there is only a 50/50 chance that any given trade promotion will be successful. POI says that less than a quarter – 21% – of CPG manufacturers are truly satisfied with their ability to manage promotions.
Most companies surveyed by CGT figure that their trade promotions are effective less than half of the time – likely because many appear to be missing out on innovative trade management technology opportunities.
Fact vs. Fortitude: What it takes to go to bat for your brands ▶️
Today, as you have no doubt heard, it’s all about big data.
Effective trade promotion management relies on the skillful use of available tools and techniques for the collection and analysis of data. In addition to acknowledging the power of data and the need for the right tools, it’s important for manufacturers to understand the crucial need for alignment across all departments.
You have the data to make smarter trade investment decisions! …but it’s sliced off across departments, systems, and files so that you can’t easily access the insights you need to make your promotions successful. And, ineffective data equals unusable insights.
There’s a term for all of this incredible streamlining and efficient unity— data harmonization.
Data harmonization interprets existing characteristics of data and action taken on data and uses that information to transform or suggest subsequent data quality improvements. Data harmonization aligns your data from various formats, and transforms it into one cohesive data set.
Harmonizing your data is the first step to optimized promotional events. To make smarter decisions in your trade spend process, you should understand your company’s marketing performance across all lines. However, if data is siloed or sequestered within each department, it’s hard to get a realistic, comprehensive picture.
Imagine this 🗯 All of your company’s data is consolidated so that you can see outliers, trends, and cause and effect across data sets. Ah, how straightforward it would be to improve your business’s strategies, effectively plan promotions, execute new marketing campaigns, and boost sales.
Benefits of Data Harmonization
Data harmonization enhances the quality and function of your data; it significantly decreases the time it takes to create and access business intelligence and lowers the total cost of data analysis.
Datorama.com defines data harmonization as the process of bringing together your data of varying file formats, naming conventions, and columns, and transforming it into one cohesive data set.
👇 7 Data Harmonization Benefits You Can’t Overlook:
- Provides a single frame of reference.
- Identify and pursue new opportunities more easily.
- Displays each department’s activities and the impact to the company’s bottom line.
- Creates more confident decision-making.
- Reduces time spent analyzing data.
- Maintains data in a reliable data bank – so it’s quicker to access, filter and analyze.
- Enables a more intelligent and efficient organization.
To effectively harmonize your trade spend data, look at each department’s data separately. This microscopic view sounds like a step backward, but auditing your data is vital in allowing you to take additional steps forward.
Data: Where To Go and What to Look For
Data harmonization isn’t simple. It’s likely the largest barrier for those that plan and optimize promotional events. And, depending on your organization’s complexities – there could be various languages, dates, spending components, measurements, and retailer differences that come into play.
- Marketing and advertising data. Look your marketing automation platform, third-party eCommerce sales data (sales via an Amazon store, for example), analytics programs, and any other marketing-related systems. This information provides insight into how marketing and advertising activities impact sales and TPM. For example, a new coupon may be distributed to units that are part of programs, thus creating double dipping scenarios.
- Sales process data. Review the information from your CRM and other sales-systems. By studying the sales process, you can identify inefficiencies in how trade deals are handled. Do reps follow up to close deals? Is there an effective sales cadence for closing new trade spend deals? Do teams use the same scripts and email templates for consistency?
- Customer service data. Peek at your company’s support platform or ticket desk. Do you see any patterns in complaints or service-related questions? Use these insights to reduce friction and improve loyalty when serving customers.
- Finance department data. There is a wealth of data in your company’s ERP system. Gather payment processing (invoices, earned income) product sales data, and accrual and budgeting data to help you identify TPM effectiveness and ROI.
- Trade – contract management data. Analyze your programs: details about the approval process, estimated vs. actual volume, year by year comparisons, price points and lump sums. If you’re using spreadsheets, a homegrown system or another solution to house this data, you may need to work with a department head or IT to gather the data points for review.
- Settlement process data. Review deductions and accruals from your current settlement system or outsource partner. Your data tells a story about the length of time it takes to process an invoice, earned income, accruals, deduction matching, and other TPM-related settlement tasks. This data review can be an eye-opening experience for your team and alert you to inefficiencies that could be costing you money.
- Invoice data and location-level data. Review how you receive data from distributors and operators, the formats, and frequencies. What can you do to improve receipt of the information?
Data Transparency Drives ROI
Gathering data from individual departments, eliminating silos, and harmonizing data all in one user-friendly, central repository is a huge step forward for any CPG and/or foodservice organization.
However, there’s another essential quality in data harmonization: transparency.
Your customers will benefit from data transparency when you make business reviews and compliance reporting available. It creates a sense of confidence through in-depth analysis reporting to distributors, retailers and operators.
🗯 For example, you can offer a Distributor Business Review report to distributors to show transparency and to provide detailed information back to the customer. Access to this information helps both parties make more informed decisions compared to making decisions on the fly. This level of transparency is priceless. Plus it builds a stronger connection between you, your team, and your customers. In the interest of transparency, ensure that your sales reps have full access to all your data. Then they can pull reports and generate reviews for your distributors and operators.
If harmonizing all of your data seems like an impossible task, it’s not. The reality is probably much more manageable than you think.
The team at TABS Analytics are experts in data harmonization. TABS takes scattered data and cleans it of any inaccurate or misleading information. We’re here to help you better understand the information that can reveal where your company is and where it’s headed. It’s the companies and individuals that learn to manage their information that will be the ones who place themselves in a position to win big…
Because once you’ve combined your data sources, you can then measure, analyze, plan and optimize your trade dollars.
With an action plan, you can implement some critical business actions to gain positive effects for your business.