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 budgeting dollars work for you. See how our customers are using trade promotion optimization to drive smart investment strategies.
Trade Promotion Optimization Case Studies
A snack manufacturer used post-event analysis to discover some alarming trends. One, their trade spending was approaching 30% at one retailer. Two, despite increased spending, they weren’t gaining share. And finally, their per-unit price point was less than competitive brands, but they weren’t capturing profitable promotional lift. See how this customer found a win-win scenario with their retail partner using data-driven insights.
Welch’s rolled out Blacksmith’s TPO solution is less than 10 weeks. The system helped the Welch’s team build more profitable plans. Welch’s used optimization to identify underperforming promotions and replace them with more effective tactics. Trade investment ROI grew more than 16%. See the 4 key directives that led the team to double-digit ROI growth.
Like many consumer goods companies trying to remain competitive in margin-compressed categories, this customer’s goal was to identify a strategy that would improve revenue and position itself for sustainable growth. Continue reading or download the PDF.
3 Optimization Challenges
- No visibility to promotional effectiveness
- Dependency on Excel spreadsheet planning
- Execute trade with only shipment data
To tackle these obstacles, the CPG manufacturer decided to take a more analytical approach to trade management and planning.
The CPG knew it was important to find a TPO solution that was intuitive, could simply integrate into their existing system and processes, and had capabilities aligned with the the organization’s objectives.
After careful consideration, the organization chose Blacksmith Applications TPO solution to improve its trade investment processes and utimately, 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 TPO and TPM 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 utilize the solution 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.
6+% cut in trade spending
2% gain in net revenue
21x ROI on TPO solution investment
Our 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