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.
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.
According to the POI, only 21% of CPG manufacturers are truly satisfied with their ability to manage promotions.
Today, as you have no doubt heard, it’s all about big data. Effective trade promotion management (TPM) 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 foodservice 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.
There’s a term for all of this incredible streamlining and efficient unity— data harmonization.
Data harmonization refers to the process of aligning your data from various formats, and transforming it into one cohesive data set.
To make smarter decisions in trade spend management, you should understand your company’s marketing performance across all lines. However, if the data is siloed or sequestered within each department, it’s hard to get a realistic, comprehensive picture.
Imagine all your company’s trade promotion and spend data is consolidated so that you can see outliers, trends and cause and effect across data sets. Imagine 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
According to Datorama.com, data harmonization is “the process of bringing together your data of varying file formats, naming conventions, and columns, and transforming it into one cohesive data set.“
- Provides a single frame of reference for the organization.
- Allows your company to identify and pursue new opportunities more easily.
- Reveals each department’s separate activities and its impact to the company’s bottom line.
- Informs confident decision-making.
- Reduces time spent analyzing data,
- Maintains data a single, 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.
Where To Go and What to Look For
- 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 (like TPM software) is a huge step forward for any foodservice organization.
However, there’s another essential quality that your harmonized data needs to have: 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 and operators.
For example, you can offer a Distributor Business Review report to distributors to show transparency in your data 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. It builds a stronger connection between you, your employees, and your customers, a trust that generally goes hand in hand with client loyalty.
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.
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 data harmonization and achieve transparency, starting with some critical incremental steps, to gradually see positive effects for your company.