How do you know what works, and how much you should be investing?
Keyrings. Stubby holders. Bar fridges. Glassware. Brands and Off Premise retailers spend a fortune on these and other types of merchandise as promotional prizes and giveaways. With shoppers increasingly moving online, where price discounts are the order of the day, just how should you be looking at the role of price discounts and promotions across both offline and online stores and platforms?
Could the dollars be better spent on other types of promotions? How do you know if the support you’re providing both in-store and out-of-store underneath new product launches is hitting the mark? In other words, how do you improve the effectiveness of promotions?
How do you measure the ROI of promotions easily and automatically, without a lot of manual labour and thousands of spreadsheets? By systemising trade promotion management and optimisation (TPM/O) to continuously track promotions performance using your data.
TPM/O software automates promotions management – sales volume and promotions planning and forecasting, scenario planning and promotion mechanics based on your promotions’ historical performance. Typically between two and three years' sales promotion data history, including price points, enable predictive promotions scenario planning.
The TPM/O system provides visibility. Visibility of P&Ls, customers, brands, and promotions. Visibility of ROI, to enable you to see which promotions have a negative or positive ROI to adjust your promotions strategy. Like switching keyrings or glassware to another form of giveaway, reducing the number of giveaway style promotions and channeling the funds into other types of mechanics based on your promotional objectives.
TPM can also prove or disprove the effectiveness of your promotional strategy itself providing:
- visibility around promotions perform to a minimum ROI standard, i.e. 20 per cent
- visibility of trading terms and any SKU’s cannibalised by the promotion
- visibility of which promotions benefit the brand and which benefit the retailer, based on inputs around messaging and attributes such as support spend on catalogue and above the line media.
A good TPM/O system is also granular. Exceedra’s TPM/O software, for instance, enables analysis by offline and online channels, retailer (including multi-site operators and banner groups), and by state.
TPM/O can also be used underneath new product launches, and there’s obviously been a lot of activity in this space in the past 12 months or so with the growth of nolo beverages across beer, wine and spirits and the concurrent acceleration of new categories such as hard seltzers and hard kombuchas.
A TPM/O system can look at a portfolio P&L – by SKU overlaid against sales and revenue performance and versus the retailer’s profitability in order to determine where the value sits, as well as whether the brand’s investment levels underneath the new product are sustainable, too much or too little.
Ultimately a TPM/O system enables better decision making around how and where to invest in promotions, and how much, by driving both promotional efficiency and effectiveness through visibility of promotional performance. Being channel agnostic means you are getting a true picture of omni-channel promotional performance to benefit your company.
Exceedra’s TPM/O software, which uses the manufacturer’s ERP system and data and integrates past promotion performance, is an end-to-end solution covering the stages of pre- and post-evaluation, trade promotion planning and budgeting, predictive analytics, optimisation guidelines, trade spend management, demand planning, and promotional execution. Companies using Exceedra software have seen a 10-20 per cent improvement in their trade spend ROI.
Schedule a call with us to find out more detail about our TPM/O solutions that make us a leading provider of Trade Promotion Solutions in the Consumer Packaged Goods industry.
Exceedra is an Associate Member of the Drinks Association.