Trade promotion management has been a hot topic for the consumer goods industry that has seen historic increases in sales that show no signs of slowing down. The industry had an estimated $655.8 billion in sales in 2015, and that number is projected to increase to $721.8 billion in 2020. Your product seems to matter to consumers. The highly targeted millennial population seems to love packaged food and sweets as much as they enjoy healthy snacks.
Even though business is good, companies can still sabotage their profits by not improving their trade promotion management. Sabotage might occur because company officials are slow to embrace the technology that is available or they don’t see the value of the investment in a trade promotion management solution. But these incredible changes could increase revenue while uncomplicating the process. Let’s look at three TPM improvements.
Data can be easy to collect but hard to manage. Lack of data management can turn into a big mess if you have multiple people entering contracts and authorizing rebates. You’ve probably been told for years about how ineffective spreadsheets and other programs can be. Software-as-a-service, SaaS, has helped many companies store the data in one place and make it accessible to everyone. Having a data storage technique keeps everyone on the same page and saves you from double rebates and contract confusion. An investment in SaaS costs less and allows you to have the latest technology.
Another benefit from better data management—you can move beyond traditional metrics. The right TPM tool will give you the ability to slice and dice your data in ways that you don’t have the ability to with a homegrown solution.
What would you do if you knew what promotions were working and exactly how much return on investment you were getting for your trade spend dollars? Tracking ROI has never been an exact science for any industry. But improved data management is helping the consumer goods industry learn just how effective their trade promotion management is. Data management enables you to determine what methods are working and which ones need to be improved or scrapped altogether. Better ROI through enhanced trade promotion management could save you thousands of dollars.
Better eCommerce Management
If your company has not jumped on the e-commerce train, hurry because it’s about to leave you behind at the station. More buyers are researching your products before you call on them or if you are lucky, they call you. It all sounds simple, but poor management of e-commerce can hurt you. Buyers are savvier than ever and are checking out your online offerings and comparing them to what your salespeople offer and what they can find in brick and mortar outlets.
Let’s say your online marketing department decides to offer a promotion on a product to Internet shoppers only. Your sales representative is not aware of what is online and makes a sales call to a business, offering a promotion that is less attractive than the web promotion. These types of inconsistencies create confusion for the buyer and trust in your company’s brand is eroded. No one wants to do business with a company they feel is not adequately managed.
While eCommerce presents potential problems and is somewhat disruptive to the industry, it also opens up new doors for companies. Promotions can be created on digital platforms and tracked so that you have a clearer view of your return on investment. There are always pros and cons to any selling method. Weigh them out to identify the right one for your organization.
The changes are exciting, but consumer goods companies will need to adapt to them quickly. As eCommerce grows, look for more competition. More employees with technical training will need to join the industry to help guide it through the challenges of managing multiple sales channels. Companies that don’t adapt will likely see profit losses as their competition adopts better trade promotion management processes.