CPGs that combine promotional planning with optimization capabilities see a boost in profitability. The more insights you gather on your customers and promotions, the more your promotion dollars work for you.
See how our trade promotion optimization (TPO) customers are using post-event analysis and what-if scenario planning to drive smart investment strategies.
Trade Promotion Optimization Case Studies
How your peers are using TPO software:
A snack manufacturer used post-event analysis to discover some alarming trends. One, their trade spending was approaching 30% at a retailer customer. Two, despite increased spending, they weren’t gaining market share. And finally, their per-unit price point was less than competitive brands, but they weren’t capturing profitable promotional lift.
Welch’s rolled out Blacksmith’s TPO solution is less than 10 weeks, and the system helped the Welch’s team build more profitable plans. Welch’s used optimization to identify under performing promotions and replace them with more effective tactics. Their trade investment ROI grew more than 16%.
Ventura Foods started using TPO in 2015. With the software, they gained visibility to more than 50 customers across its four main brands. Ventura leverages the master calendar for an easy-to-view snapshot of past promotions. The master calendar enables the team to analyze whether past promotions worked, or didn’t, then they can discover the causes behind their data — Did they get the price point they paid for? Was a competitor on promotion at the same time, or before? Has the baseline been declining (identifying a larger problem)?.
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3 Trade Optimization Challenges
Most CPGs agree, it’s important to find a TPO application that is intuitive, can integrate into their existing system and processes, and have capabilities aligned with the their business objectives.
The biggest trade optimization challenges CPGs face are:
- No visibility to promotional effectiveness
- Dependency on Excel spreadsheet planning
- Execute trade with only shipment data
To tackle these obstacles, one of our customers, a known CPG manufacturer, decided to take a more analytical approach to trade management and planning. After careful consideration, the organization chose Blacksmith Applications TPO solution to improve its trade investment processes and ultimately, results.
With TPO, the company could:
• Eliminate existing Excel-based planning
• Integrate optimization into their existing trade promotion management (TPM) system
• Incorporate fact-based consumption planning and analysis to sales planning
The Software Solution
Upon selection of the TPO application, the company’s TPO and TPM software tools were fully integrated in under 12 weeks. The timely integration was achieved with minimal involvement from the company’s IT department and included sales training. The sales team could immediately use optimization capabilities for more informed, fact-based planning for their next fiscal year promotional activity using the powerful predictive planning functionality.
Blacksmith’s TPO is a user-friendly application that:
- Automates data harmonization (POS consumption, shipment & spending) for real-time post-event analysis
- Applies constraint-based modeling for optimized trade investment planning
- Smooths baselines
- Shows volume and pricing trends
- Builds plans through what-if scenarios
- Creates reports quickly
Using trade promotion optimization software, you can expect a 3% – 5% return on annual trade investment.
First-Rate TPO Results
The customer was able to meet (and exceed) key trade performance metrics two years in a row as a result of:
• Commitment from their trade marketing team
• Strategic support from the executive leadership team
• All stakeholders sharing a vision to prioritize improvements to the process and effectiveness of their trade spending
👉 6+% cut in trade spending
👉 2% gain in net revenue
👉 21x ROI on TPO solution investment