Building a Business Case for Trade Solutions

Webinar recording hosted by trade solutions expert Joel Cartwright

What You’ll Learn:

  • What you need to prepare internally for a trade solution business case
  • Your current challenges and pain points
  • How the system can create value across the planning lifecycle
  • Estimate ROI and measure the value of the system



Preparing Internally

  1. Decide what you want to fix and what habits need to be changed
    1. Identify the current TPM process and where the gaps exist
    2. Identify the outcomes you want to improve and quantify them
  2. Determine the resources and investment needed for the initiative
    1. Identify the departments and individuals that are required to evaluate and decide on the system
    2. Understand if there’s funding available – if not, what is the approval process for budget
  3. Set a pragmatic timeline
    1. Decide when you want the system to “go-live”
    2. Ensure that the timeframe take into consideration annual planning timeframes
  4. Quantify the return on investment
    1. Identify the ROI of deploying a system
  5. Plan the work (and work the plan)
    1. Identify an executive sponsor that will provide the leadership to push the project through the end

(video time: 6:45)

Addressing Current Challenges and Pain Points

Do these challenges sound familiar?


  • Poor alignment between sales and demand planning (resulting in excess inventory)
  • Low visibility to sales, trade spend, promotion ROI plans, actual performance
  • Undesirable activities taking place (resulting in customer overspending)
  • Can’t understand indirect customer plans and performance
  • Profit leakage due to invalid deductions
  • Inaccurate trade spending and balance sheet


(video time: 9:50)

  • Create, update, collate planning templates
  • Planning output data levels are limited (PPG or SKU)
  • Creating merchandising calendars
  • No automated workflow
  • OI allowance, deduction credit memo/GL adjustments
  • Records in different systems / places

Ready to increase trade effectiveness?

Value Proposition Across Your Annual Planning Process

(video time: 12:08)

Planning – Customer and Products

  • 25% to 30% reduction to the planning period — more time for plan and promotion analysis

Planning – Direct and Indirect Customers

  • Improved control and efficiency on indirect trade spend
  • Represents a direct improvement in annual net sales
  • Indirect spend accuracy improves spending accrual
  • Indirect volume forecast improves production planning

Alignment – Top Down / Bottom Up Plans

  • Plan product mix for contribution
  • Multiplan calendar for alignment to retailer
  • Plan at multilevel — approval at multilevel
  • Align plan to drive category share

Once the plan is in place, you can understand and forecast to S&OP. You can course correct on this event type, product, or SKU.

Deployment: Align plan to retailer calendar

Control: Approve spend by margin, total cost, percentage of list price

Accrual: Spend accruals to general ledger

Plan: Corrections or additional allocation of funding

(video time: 21:20)

The last component on value creation is understanding the settlement process.

Order to Cash Cycle: Deductions

From deduction aging standpoint, you want to have 90% of your deduction balance in under 30 days to improve your accrual accuracy.

  • Reduce invalid deductions (typically 3.7%) and shorten deduction processing by days
    • 3.5% of your overall trade budget is a lot – you should be getting that money back from the retailer
  • Speed up the settlement process time and improves operating cash flow

Invalid Settlements: Capture and repay

Estimate Return on Investment

(video time: 23:50)

I want to improve – not maintain. Look at it as projected benefits vs. cost.

Overall trade system project benefit:

  • Sales and net revenue lift
  • Cost reductions
  • Streamline settlement processing
  • Forecast accuracy

Use a project analysis to compare benefits: *Your trade promotion system provider should be able to provide numbers 

  • Net Value Impact = Projected benefits – cost
  • Projected Value Creation: 3 to 5 year projection
  • Calculated ROI
  • Payback years

Benchmark Numbers

Looking for a value assessment? (video time: 28:50) These numbers are build around a customer with $60 million in gross revenue. Their retail business is roughly around 25% trade rate.

💰 Increase in net margin at 2.4% ($363k) in year 1. (Year 1 refers to the first year fully utilizing the process and application.)

💰 Increase net revenue by $2.1 million dollars over 5 years.

💰 Replicate successful events and prioritize profitable products.

💰 Optimize inventory costs with more accurate volume forecasts.

💰 Lower write-off tolerance.

Allow the process to take hold. Allowing trade promotion and optimization systems to their work — you’ll gain financial efficiencies.


Next Steps:

  1. Set up a discovery call with a trade system provider
  2. Identify executive sponsor & budget
  3. Identify timeline for the trade system project go-live and implementation
  4. Communicate challenges and areas of importance