Quantify the Cost of the Status Quo

CPG companies find themselves struggling to measure and quantify promotional results.

You can’t measure what you can’t see.

CPGs are blinded; they’re running the same plans year after year, failing to see the ineffectiveness of their trade promotion investment. Without being open to change in the form of powerful analytics and optimization capabilities to build a profitable trade strategy, companies will continue to see less than an optimal return in their future planning initiatives.

The Present

Currently, CPG companies invest a quarter of their revenue on trade promotions. The investment is compromised due to inaccurate baselines and a limited view of event and plan performance, thus projecting a skewed view of the health of their business. In other words, CPGs are missing the opportunity to know whether promotions are working. The confusion over data validity and various measurements of promotional success leads internal stakeholders vying for funds to spur results (instead of analyzing the best investment). It’s impossible to assess these competing priorities, but the fear of not meeting objectives results in needlessly spending on plans that historically do not work.

 

 

This possibly flawed view of your business will not only affect the bottom line, but as your peers adopt advanced analytics and predictive planning capabilities, the competitive gap widens. Those who do not adopt trade promotion optimization strategies will fall further behind.

 

The Possible

Good news! Inefficiency and miscommunication are no longer the norm. Now, we can turn information into profit. All it takes is commitment. See your results when you make one change, to one promotion, and you’ll understand what’s been missing. Multiply that by all of the promotions and retail partners, and companies will find themselves as a leader.

With analytics and optimization, trade planning becomes informed, flexible and intelligent.

Thanks to one, harmonious view of the truth, departments can collectively work in synergy to meet company objectives, and do so with an realistic understanding of quantified historical performance.

Furthermore, a view of competing promotions give you a strategic advantage – knowing the price points, timing and promotional strategy of your competition. Couple this advantage with an integrated view of consumer marketing activity and you can really see look at how they optimize their entire marketing spend.

 

“As other CPGs begin to adopt advanced analytics and predictive planning capabilities,  the competitive gap widens. Those who do not adopt these strategies will fall further behind.”

As companies organize sales planning around insights gained from historical data and predictive modeling, they’re more likely to align their plans with company objectives – eliminating the wait-and-see approach that leaves too many consumer product companies caught off guard with poor results.

With an open mindset about analytics, the sooner you jump-start a proactive approach to trade spending. You’ll no longer search for answers – you’ll create effective strategies with learned tactics to execute controlled and profitable promotional plans.

All in all, CPG companies should be aware that the cost of the status quo places them in a position that jeopardizes growth and competitive advantage. A failure to secure the opportunity to manage their trade investment for sustainable revenue contribution can set a company up for costly consequences that stretch far beyond a single ineffective promotion.



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