What You’ll Learn:

  • What a closed-loop trade management solution is and how you can automate promotional activities while enhancing visibility and efficiency
  • How trade promotion optimization software enhances your TPM solution via analytics and predictive capabilities
  • What a holistic trade management ecosystem looks like and the many benefits gained when TPM & TPO solutions work together

Webinar Hosts 💻

Katelyn Cieslinski, Marketing, Blacksmith Applications

Shelley Fow, Director of Pre Sales, Blacksmith Applications

This session examines the concepts of managing trade. You’ve heard the acronyms TPM and TPO… but do you know what they mean, how they’re different? We’ll break it down so that you can understand what these systems are, how your team will benefit from using them, and what you want to consider for the future.


How Did Trade Spend Start?

(video time: 4:03)

Trade promotion evolved as a result of default, not by design. During the Nixon era, the administration had enacted a price increase to help contain inflation on retail products. And, not surprisingly, prior to the price freeze going into effect, the consumer products industry initiated a big price increase to help offset those inevitable increased cost of goods.

💥 The world of trade promotion got its start.

In the early stages of trade promotion, or what they used to call it – Co-Op advertising – retailers created retail opportunities that were offered at a nominal costs that revolved around retail price reductions and special in-store displays. At the time, leading manufacturers aggressively supported those opportunities – and saw a major sales lift. That created a win/win on both sides.

Back then, tracking promotional expenses was much easier. They utilized a flat dollar rate per case and built a fund up per retailer. CPG brand managers typically tracked accruals against the P&L… which ultimately created the first (formal) trade promotion management process.

If only trade promotion management were that simple today! Now, most CPG companies invest substantial money and time into trade investments to protect market share and increase revenue. Today, entire departments manage trade. It’s more important than ever to make sure our teams have a consistent approach to the trade spend process.


State of the Industry

(video time: 7:15)

CPG companies responded to a recent POI survey to say…

  • The process of creating a promotion, budgeting, planning, executing, settling, and analyzing is “burdensome
  • We’re dissatisfied with our ability to manage trade promotions
  • We struggle to manage modern trade
  • We lack the capabilities to optimize pricing, allocations and go-to-market strategies
  • It’s difficult to align promotions that are executed in the store


CPG state of trade promotion stats

Blacksmith poll on trade management satisfaction


Managing all of the aspects of trade really can be overwhelming.

During the live webinar, the poll showed…

    • 43% of the attendees are dissatisfied with their ability to manage trade promotions
    • Only 22% of the attendees said they are satisfied with their ability to manage trade promotions
    • 76% find it difficult to get aligned on in-store promotion execution


Trade Promotion Management Essentials

What is trade promotion management? The process of managing trade spend activity. Many CPGs opt for a best-in-class TPM software.

(video time: 12:40)

The best, most effective trade management process starts with setting objectives. Then, the rest of the process starts to fall into place.

  1. Set Objectives. Establish and track against sales and budget goals.
  2. Plan Promotions. Record each promotion and manually enter base and incremental volume forecasts.
  3. Approve Plans. Accept promotions through a metric based approval scheme.
  4. Manage Spend. Oversee forecasts for accruals while monitoring performance in-flight.
  5. Process Settlements. Validate invoices and manage payments and deductions.
  6. Report Performance. Analyze the impact to your business with best practice reporting.

If you’re currently managing your trade spend in spreadsheets, then investing in a TPM system should be your first step. A TPM system will solve your biggest issues (i.e., lack of visibility to planning, spending, forecasting). It gives you the ability to match planned promotions to actual spending.

In addition, establishing new and improved business practices is always a great part of step 1 – setting objectives. Ensure your system is utilized properly – to its full potential. That old saying ‘garbage in – garbage out’ can apply here. Internally, take time to examine the areas that could be improved. Know that if you opt for a best-in-class solution, make sure you keep all things trade in one place, one system. Steps 1 – 6 should be in one system.

(video time: 18:25)


Do you have a closed-loop TPM


Unfortunately, 78% of the webinar attendees say they’re missing one or more of these essential elements from their TPM system.

TPM is Tactical

We think about TPM as tactical. What we mean by tactical is relating to or constituting actions carefully planned to gain a specific military end. Of course, we’re not planning military actions… although trade promotion can feel like a battle.

TPM systems provide CPGs with specific activities and capabilities such as:

  • Assign rates and dates for promotional and tactical execution
  • Enter volume estimates manually, typically by the account manager
  • Capture promotion details such as merchandising conditions and promotion price
  • Document agreed to promotional rate and agreed to start and end dates during a promotional period
  • Settle promotional fund payments
  • Integrates with your ERP and if needed demand planning and TPO systems


10 Key Benefits of a TPM Solution

(video time: 23:00)

  1. Include one master record
  2. Provide accurate and timely information that supports the entire promotion decision-making process
  3. Plan promotions based on your analytics
  4. Automate funding and approval processes
  5. Gain cross-functional visibility through reporting
  6. Increase ROI on trade investments
  7. Improve performance through your access to actionable KPIs
  8. Build stronger relationships with retailers
  9. Promote your product… in the right place, at the right time
  10. View monthly snapshots of the forecast


benefit of tpm poll


The webinar audience said the most important TPM benefits are:

  • (45%) promotion planning based on analytics
  • (30%) cross-functional visibility and awareness
  • (15%) actionable KPIs
  • (5%) standardization
  • (5%) automated funding and approval process


Trade Promotion Optimization Essentials

What is trade promotion optimization? TPO software is an enhancement to TPM software. TPO takes trade investment planning to the next level.

(video time: 28:00)

Data Harmonization

Centralize your internal and external data. That includes shipment, spending, syndicated, and retailer POS data.

Baseline Modeling

Smooth your baselines for accuracy. Know the true consumption in the absence of a promotion.

Optimized Planning

Use predictive planning to optimize your promotions at an individual event level and full calendar level.

Post-Event Analysis

Evaluate your ROI and competitor actions. Understand how your events really performed.


Of the live webinar attendees….

📊 38% perform post-event analysis 0 – 25% of time time

📊 31% perform post-event analysis 25 – 50% of the time

📊 19% perform post-event analysis 51 – 75% of the time

📊 13% perform post-event analysis 76 – 100% of the time


Blind Spot Data

(video time: 31:30)

We do have clients that access SPINS data (vs. IRI or Nielsen). The key components that TPO software focuses on – are data points that give you the ability to see and predict how your promotions did on feature or on display. When we have all of those elements available,

If all you have is shipment data, or limited SPINS data… you should still be able to have your base and incremental modeled out. Sure, it may be harder to get those angles when you don’t have all of the insights. Regardless, you’ll see when you had promotions and if there was a lift.


TPO is Predictive

(video time: 36:45)

We think about TPO as predictive. Predictive is defined as relating to or having the effect of predicting an event of result. That’s exactly what TPO does.

TPO systems provide CPGs with specific activities and capabilities such as:

  • Use scientific volume calculations vs. hand entered gut feeling volume estimates
  • Apply historical lift coefficients driven by tactic, price, discount levels, and historical results
  • Create a credible base volume forecast
  • Utilize what-of scenario modeling
  • Require syndicated data and promotional data points
  • Integrates with your TPM system and demand planning system


10 Key Benefits of a TPO Solution

(video time: 39:48)

  1. Have a data-driven approach to minimize spending on trade promotions
  2. Measure and analyze KPIs to improve performance
  3. Ability to conduct in-depth PEA
  4. Understand consumer responses to your product and brand
  5. Report on just-in-time user inputs
  6. Increase ROI on trade investments
  7. Enhance “tactical” TPM with “predictive” capabilities
  8. Build stronger relationships with retailers
  9. Promote your product… in the right place, at the right time
  10. Ensure effective promotional strategies


TPO benefits poll from webinar


The webinar audience said the most important TPO benefits are:

  • (50%) ability to conduct in-depth post-event analysis
  • (31%) increased ROI on trade investments
  • (13%) better understanding of consumer response to your brand
  • (6%) data-driven approach to minimize spending
  • (0%) stronger relationships with retailers


Customer Case Study

(video time: 42:22)

Welch’s became a Blacksmith TPO customer in 2017.


The Key Challenges:

  1. Poor promotional ROI
  2. Budget adherence
  3. Non-repeatable practices
  4. Siloed planning

The Solution: After a 10-week implementation, the Welch’s team was able to:

  1. Work together to identify ineffective trade spend and create profitable promotions
  2. Move away from manual planning and analysis to automated post-event analytics and predictive optimized planning

The Results

  • Trade investment ROI increased 16%+
  • Achieved volume objectives


TPM and TPO are powerful tools. Together, these systems created an integrated ecosystem to optimize and manage trade promotions.

How it all works together:

  • Establish and track against sales and budget goals
  • Project accurate baseline volume and optimize promotions with constraint-based modeling
  • Approve plans, forecast volume and spend for accruals and manage the P&L
  • Manage payments and deductions
  • Assess the health of baseline business and conduct post-event analysis
  • Analyze the impact to your business through our best practice reporting

Integrated Trade Ecosystem