Considering business process improvement? Guest blog post looks at an aspect of enterprise technology known as trade promotion management software.
Managing trade promotion programs is a multifaceted business process for consumer goods manufacturers; it involves a significant amount of time, money and resources. Companies spend 25% of gross sales on trade promotions, and still, more than half don’t break even.
To avoid loss and drive accountability, CPG companies are turning away from manual processes and implementing trade promotion management [TPM] software.
Why Implement a Trade Promotion Management Solution?
TPM solutions support the complexity of planning, optimizing and analyzing trade dollars. They deliver actionable metrics so you can make better decisions to improve performance. With trade spend software in place, you’ll discover that tiered pricing, deduction management, deviated costs, and double dipping are headaches from your past.
Consider this class of enterprise software to avoid guessing what promotions are working and what aren’t. Leverage available data sets to confirm product strategy, review demand and develop insights to a deal’s effectiveness.
Benefits of a SaaS pricing application include:
- Fast approval turnaround time (promotions, rebates, price requests)
- Clearly follow deals that are about to expire
- Quickly find status of payments, check requests, deductions
- Consistent communication of deal parameters to distributors and operators
- Track the budget, committed and actual spend amounts
TPM software demonstrates time and cost savings, but companies can also capture real-time and historical data available in the software to assess various levels of information and uncover more ways to increase profitability.
Functionality to Increase ROI in Trade Promotions:
- P&L Management: Calculate a deal’s exact profitability and review deal-level P&L inclusive of all other programs.
- Live Accruals: Post accruals by customer and product, enabling in-month visibility to customer net review. Files can be accessed and downloaded from the application for analysis and reconciliation.
- Recapture: Set up recapture programs to be automatically managed per predetermined distributor agreements.
- Claim Management: Improve settlement outcomes through automated billback claim and validated workflows. Track customer purchases relative to program commitments.
With these features, companies improve program accuracy, decrease time spent on approvals, recapture price deviations, and develop a 360-view of pricing activity.
“Trade spend software generates data consistency and accessibility to performance measures,” says Matt Caldwell of Blacksmith Applications. “With an application in place, companies can efficiently evaluate the profitability of discounts and allowances, generating actionable insights to their spending trends and pricing strategies.”
Tips when Considering Trade Promotion Management Software
- Find a solution that is non-invasive and ERP agnostic with the ability to integrate for master data on a nightly basis.
- Think about comprehensive capabilities ‘out of the box’ so that various business functions can leverage one centralized application.
- Consider an intuitive application so that programs are quickly and easily set up, using templates that configure a wide range of program types.
- The software should base trade rates on actual events to increase margin accuracy and eliminate re-work steps.
- Choose an application with flexible reporting capabilities so you can evaluate profits by business and region.
- Switch to a software partner with industry knowledge, building their solution to solve challenges of your business dynamics.
Trade promotion management software generates insightful actions for business decision makers to gain profitability – understand the ins and outs of your trade promotions by implementing a system that focuses on key metrics – gaining visibility into pricing programs, taking control of trade dollars and growing profitability through product and business strategy.
Guest Post by Blacksmith Applications – developer of trade management software solution, FORGE, for CPG retail and foodservice manufacturers.