Exploring the next level of Trade Spend Optimization

There is no shortage of pithy quotes about how we should embrace uncertainty. Just ask Bard or ChatGPT. But inspiring as they are, they really don’t help CPG firms trying to establish the best way to invest trade spend in the short term, while positioning themselves for growth in the long term. 

Commercial teams who simply repeat what they think has worked in the past are liable to get left behind. They might look to establish what return on investment a given activity will deliver and use that as a basis for planning. But individual activities happen within a much larger context, not least the long-term contracts between manufacturers and retailers. And even the most carefully constructed plans can be thrown off course by factors such as political volatility or supply chain shortages. Or just an unexpected  early loss at the world cup. 

But if establishing the true value of trade investments with retailers and channels is a challenge, teasing out how they contribute to a long-term trade spend strategy of sustainable growth might appear impossible. 

In this article we’ll show that while a focus on ROI is a starting point, there are limits to its utility. But, by moving to a more strategic total contribution model, adopting trade spend optimization, and investing in the tools to underpin this, CPGs can improve their trade spend management decisions and set the stage for sustainable growth over the long term. 

The ROI challenge in trade spend optimization

If you’re a business and you’re spending up to two fifth of your revenue on something, you’d want to make sure you’re getting value from that investment. So, in the CPG world, sales teams, finance, and senior management, should all be paying attention to the 40 percent of their revenue they typically devote to trade spend. 

But how exactly do you assess whether you’re getting value? 

The starting point for this is return on investment. If a discount scheme with a particular retailer or market is not delivering a benefit, why would you want to throw good money after bad? But if a particular instore activity is helping you increase market share, wouldn’t a switched-on account manager want to extend that promo period? Or roll it out to more stores? It’s a compromise CPGs can be willing to make, depending on context. 

The problem is each single promotion or discount, each SKU or family of brands, exists within a broader context. Each activity is just one aspect of a broader, often long-term, contractual relationship between manufacturer and retailer. This relationship can span multiple investments and activities, which overlap, and potentially impact each other.  

Looking at the ROI of one isolated promotion might not say much about progress towards fulfilling those broader, longer-term contractual goals. 

And the manufacturer will – or certainly should – have a broader strategy, stretching years beyond any contractual period with any single retailer. This strategy should be designed to ensure sustainable growth, both for individual brands and the company as a whole.  

ROI might be a straightforward indicator when it comes to specific activities, but establishing long-term, growth-oriented ROI is more of a challenge. Profitability, ultimately, will be what underpins a brand, a group, and a company’s success and viability into the future. Taking all this into account, marginal contribution becomes a better measure of success and a sounder basis for analysis. 

Moving beyond ROI: total contribution analysis 

Tracking ROI might appear straightforward. An account manager will plan a particular promotion with a retailer and look to predict a specific measurable return. Invest X amount in instore activity, or offer a given discount, and expect sales or volumes to grow by Y. 

But what if this is at odds with other activities from the same CPG vendor? Or if other factors undermine the offer? Perhaps it overlaps with other activities, such as mainstream marketing or advertising. 

Are there other ways to measure the ongoing success or growth of a brand or line and, by implication, the effectiveness of trade spend optimization? Market share might be a key factor for a CPG, but here, too, it’s hard to single out one investment as a driver. A strategy which increases store visits might please a retailer as well as boosting sales of a given product, but this, too, often consists of multiple, overlapping initiatives, making ROI immeasurable 

When sales professionals, and senior executives, start considering all these elements they will inevitably conclude that what’s needed is a more overarching KPI to measure success. What’s needed is a more nuanced view of the effectiveness of trade spend, and that is marginal contribution to overall growth. 

This then creates a platform for deeper analysis of a brand, retailer, or entire channels and their total contribution to growth. And it will provide a base for trade spend optimization, ensuring the total set of activities and investments contributes to the key performance KPIs: profit, revenue and market share.  

This could highlight the need for more strategic decision making. It might become apparent that an individual partner, or an entire channel, is delivering high growth but comparatively low profitability. Left to run on, this could begin to undermine profitability overall. If it becomes clear that a partner is in decline and delivering low profitability, a CPG might decide to maintain or even decrease investment. 

This will be a critical consideration for the sales team, but also for other functions such as demand forecasters or finance. But it’s also important information for more senior leaders looking to discern how tactical, short-term activities translate into the long-term success of the organization. 

Risks in trade spend optimization 

Trade spend optimization goes hand in hand with a strategic approach to sustainable growth. But there are still challenges and traps that can swallow up the unwary. 

One of the biggest dangers is overinvesting in promotions. When a 25 percent price reduction has apparently delivered increases in volumes, there’s a temptation to repeat it more often. Or a sales specialist might even propose to increase the discount rate to 50 percent. If the focus is on volumes, this could make sense. In the short term at least. But it could eat away at baseline profits over time. 

And what is the competition doing? A rival might not be as profitable to a retailer, but could compensate with more investment in shelf space, or pricing actions, that ultimately constrain your efforts. So, how do you keep tabs on what is going on in the market, and how do you respond? 

Inaccurate forecasting is a constant worry. Your model might suggest investing in one retailer with the prospect of 10 percent growth, while predicting a decline at a rival. But if the opposite happens, you have potentially wasted that investment, and fractured your relationship with at least one of your retail partners. 

Likewise, short-term factors – unexpected weather, a glut of products, a supply chain disruption at a rival or across an entire category – can have a significant effect on ROI or contribution. But without visibility both of your own products, and of the market, it can be easy to be swept away by illusory success – or, indeed, what looks like failure. 

A sales team might pat themselves on the back each quarter if a promotion succeeds. But what are those efforts saying about the long-term trajectory of a product line, or a partner, or an entire channel? Are they contributing to the company’s success for the future? And are they demonstrating to the retailers that they understand their challenges? 

Specific, discrete actions designed to optimize your trade spend might appear perfectly logical, considered in the short term. But looked at more holistically, it can become clear that they don’t deliver the benefits you hope for and are actually undermining your business outlook. 

Truly trade spend optimization requires a holistic view of trade activities, and of the company as a whole. And that requires the right tools. 

Trade spend optimization software 

What tools then will allow you to begin your trade spend optimization, and move to a total contribution analysis model that delivers predictable and sustainable revenue growth? 

A feel for the market is not enough. It’s hard to scale a hunch. Hand-tooled spreadsheets or customized systems suck up time and reduce collaboration.  

However, modern trade spend optimization software can give a team, and an entire organization, a common platform to analyze and optimize their trade spend. 

Innovative software will be able to accommodate data from across the organization, and from partners and third parties. State-of-the-art analytics and artificial intelligence can then produce an accurate baseline over time and provide far more accurate forecasts – taking into account the anomalies and disruptions we’ve discussed. 

But CPG strategy is about more than just volumes and trade promotion spend. An integrated solution should allow different teams within an organization to share both raw data and the results thereof, providing insights and a full volume-to-value forecast. This allows account handlers to see the impact of their activities on other parts of the business, and model and optimize accordingly.  

And it should allow sales leaders, finance and senior management to take a bird’s eye or long-term view, and to drill down to specifics when necessary. 

Better forecasting and analytics together with the automation of manual processes means human bias is removed. But that doesn’t mean the human factor is removed altogether. Sales team members are freed up to focus on innovation and relationship building with retail partners. It’s one thing to propose a new pricing scheme or in-store promotion as part of a long-term strategy. It’s another to present a category manager or purchaser at a retailer with both a plan, and the data to support. Decision making suddenly becomes much easier, and much quicker. 

A modern solution allows the organization to trade spend optimization and other activities. But it also enables more personal fulfilment for both account handler and client as they shift from separate, discrete promotions, towards collaboration, knowledge and shared goals as the drivers of future category growth. 

Visualfabriq’s trade spend optimization software 

Visualfabriq’s Trade Spend Master gives CPG companies the data integration, visibility, and AI-powered smarts they need to optimize their trade spend in the short to medium term and deliver sustainable growth in the long-term. Additionally, the Trade Promotion Master provides the required insights into promotional performance and uses embedded AI to optimize promotions to drive performance. 

The software as a service (SaaS) is highly configurable, providing commercial teams, finance, and senior executives with complete visibility into their promotional, pricing, and contract strategies. This visibility is available at both detailed and strategic levels, enabling informed decision-making. Because they are part of Visualfabriq’s broader offering, with an audit-proof workflow, they allow the entire organization to coordinate actions for maximum efficiency and impact. 

The result is that commercial professionals can optimize as they plan, meaning more impactful trade spending, and the ability to analyze the contribution of individual activities, retailers, and partners to the overall success of the company. 

Takeaways 

When it comes to trade spend optimization, considering the ROI of individual promotions or activities is just the first step in ensuring that your investments contribute to overall growth. Investments – and their results – need to be understood within the broader context of contractual relationships with retail partners, and the long-term strategic goals of the CPG. This means adopting an integrated approach to trade spend optimization and adopting a total contribution approach to brands, categories, retailers and entire channels. To see how Visualfabriq’s platform can help you optimize trade spend in the immediate term, and position you for sustainable growth long-term, book a demo today. 

Holistic Enterprise Planning in Consumer packaged goods

The higher you go, the further you should be able to see. But time horizons in the consumer packaged goods industry can be highly compressed, with some functional or brand teams forced into a short term, reactive mode rather than thinking beyond next year, or even next quarter. 

However, those entrusted with safeguarding the success of the company in the long term, by delivering steady and sustainable growth, must try and see years ahead. 

They need to ensure the individuals and teams focused on specific tasks such as trade promotion management, forecasting or marketing all have the tools – and data – they need to do their job. 

But they also need to be certain that the information coming out of those teams is accurate and reliable. And they need to understand how all those tactical activities contribute to growth and strategic development overall, both in the short term and over the longer term. 

Striking that balance is the object of holistic enterprise planning (EPx) in the CPG industry. This assumes the free flow of data throughout the organization, with everyone working on the same view of the truth, and a high degree of automation enabling greater efficiency throughout the business. 

In this blog we’ll examine the impediments to this approach and map out the path to true holistic enterprise planning. 

The challenges addressed by holistic enterprise planning 

Before senior management can think about holistic enterprise planning there are a myriad of hurdles that must be overcome. To a large extent, these are the same problems that prevent teams operating as efficiently as they can at a purely tactical level. 

For example, sales, finance and demand teams are often bogged down in manual tasks. Does revenue or demand planning mean pulling data manually? Does constructing an annual operating plan (AOP) mean pouring data into hand-tooled spreadsheets?  

This all shrinks the amount of time and mental bandwidth teams can apply to problem solving or innovation – and raises the specter of simple mistakes which can have catastrophic results. 

This reliance on manual tasks also makes it harder to address inefficiency at multiple levels in the business whether that is in supply chain processes, cost management, or pricing strategy. And firefighting across all these areas distracts teams from making more accurate volume forecasts or strengthening relationships with customers. 

Related to all of these challenges is the question of visibility. When information is manually compiled and held in siloed applications, it tends to stay there. 

This paralyses process improvement, whether that’s consolidating and sharing insight and learnings from different teams or establishing meaningful monthly review meetings. Assessing trade promotion management (TPx) and Retail Execution (RetX) becomes difficult, if not impossible. 

Siloed, unconnected data also means live dashboards and updated reports become difficult to achieve. This further undermines collaboration, and makes it hard for senior management to grasp what is really happening at a tactical level. 

That is why having a single version of the truth is critical, with well-founded baselines, which in turn lay the groundwork for more accurate forecasts. When accurate reporting is brought into mix, CPG companies can gain a true picture of the progress or their promotions or other activities and optimize accordingly. 

If this is then combined with well-founded artificial intelligence, companies can move to another level. 

A journey to improve efficiency and effectiveness  

So what does this journey look like?  

Trade promotion management and trade promotion optimization are areas that can quicky benefit from a more joined up approach. Simply automating data collection and integration frees up professionals to focus on planning and more accurate trade promotion forecasting, meaning they are better prepared for negotiations with retailers. 

But the use of AI opens up the possibility of not just more accurate forecasts, but the ability to model entirely new promotion strategies, and optimize plans right at the start of the planning and implementation process.  

Potential uplifts can be better predicted, as well as ROI, both at a category level, and at a department or companywide level, thanks to standardized, fact-based calculations.  

This means trade promotion teams can present their retail partners with multiple scenarios and programs, and their likely impact, making a long-term win-win approach far more viable. 

And because all departments, and categories, are working on a single version of the truth, outlooks and models for the entire organization are improved.  

With a view of all the relevant functions, and access to AI-led planning, senior executives can begin to drive optimization across commercial teams, taking a more strategic approach to growth. 

This sets the stage for revenue growth management in CPG, where integrated data and shared insights allow companies to better balance their various functions – promotions, assortment, trade investment – and guide sustainable revenue growth from one year to the next.  

The next strategic evolution – holistic enterprise planning  

But the ultimate benefit from these actions comes from the ability to help top executives steer the company over the long term. That’s because it opens up the possibility of truly holistic enterprise planning, or EPx.  

This is where all the work done in increasing automation, tuning workflows, and ensuring seamless integration and sharing of data and insights, really begins to pay off. 

If they are sure their teams have the right tools, combined with trusted AI and machine learning algorithms, C-level executives can be confident about the actions their teams are taking – and the results they are seeing. 

When the organization is working to a single source of truth, the headline dashboards the C-suite relies on become more meaningful, but also more actionable. The top line view becomes a portal from which they can drill right down to regional operations, individual promotions, or a specific retail partner. If necessary. 

But they can also carry out their own modelling and optimization, taking into account not just short-term factors or uplifts, but longer-term opportunities and risks. So, instead of spending half their workday trying to figure out whether the numbers they see are really true, they can contemplate what the numbers mean in terms of future actions and directions. 

This means C-level executives are better able to articulate their strategic objectives over years long timescales and to plot the steps they can take to reach them. And that benefits everyone. 

Takeaways

By enabling CPG organizations to work with a common truth as well as cutting edge AI, Visualfabriq changes the question from “is this correct?” to “how can I make this better?” 

What begins with automation and optimization of key pillars such as trade promotion and revenue forecasting, lays the groundwork for revenue generation management, and ultimately holistic enterprise planning. 

To see how Visualfabriq can help your organization make this journey to a more sustainable future, get in contact today and arrange a briefing. 

Visualfabriq has proudly achieved best-in-class distinctions in Enterprise Planning Integrated Business Planning (IBP) S&OP Capabilities, recognized by POI.

What is Revenue Growth Management?

Every business wants to increase revenues. But for consumer packaged goods (CPG) companies there’s a big difference between ramping up sales at all costs, and achieving sustainable, managed revenue growth that benefits the manufacturer, its retail partners, and their consumers.  

CPG firms face considerable challenges in achieving sustainable top line growth. Their supply chains are long and complex. A manufacturer will have many individual brands, and these will be offered in a variety of formats and packaging, at different price points. The retail landscape is also incredibly diverse – with a range of consumers buying from convenience stores, supermarkets, and big box retailers, across multiple geographies. That’s a lot to get right. 

The current economic climate makes life even more complicated. Manufacturers face rising materials and energy costs as well as supply chain disruption. Those same factors are contributing to rising inflation rippling throughout the economy. Consumers are acutely sensitive about pricing, while retailers are extremely protective of their profit margins.  

This is why more and more firms are embracing a modern revenue growth management (RGM) approach. Put simply, RGM is the discipline of driving sustainable revenue growth through the methodical and holistic management of all the functions at the manufacturer’s command, including promotions, pricing, assortment, and trade investment. 

In this article we will examine the benefits CPG companies, and their various teams, can reap through effective revenue growth management. We’ll also address the challenges they face in implementing RGM and highlight how an integrated platform approach can overcome these. 

The benefits of Revenue Growth Management 

As we’ve seen, the retail and consumer environment for CPG firms is complex. But a CPG manufacturer’s own internal landscape is incredibly diverse too. A variety of distinct functions and teams all contribute to revenue growth, from demand forecasters and marketers to sales teams and trade promotions professionals.  

Each has a critical role to play, and they are often complementary. But it’s all too easy for different functions to operate as individual silos, working to different objectives, often relying on different data and tooling, and even pulling against each other. 

By taking a revenue growth management approach, CPG manufacturers aim to bring different teams’ tactics and strategies together under a comprehensive commercial plan aimed at securing sustainable and profitable growth. 

RGM is often conceptualized as spanning five pillars, namely: promotion management; pricing; trade spend; commercial planning; and assortment/mix optimization. 

When all these functions are working together in harmony, with a common objective, and a shared version of “the truth”, it becomes easier to plan and review the impact of promotions and other activities. It is then easier to optimize them, and to spot growth opportunities in the short or longer term.  

It also makes it easier to fine-tune and coordinate budgets and spending to ensure trade spend and promotions are more efficient and deliver the biggest possible impact. 

And it results in improved revenue forecasting and optimization, leading to more sustainable revenue growth both in the short and long term. That doesn’t just mean hitting targets, but meeting them in a predictable way, with different functions – and their spending – operating together to deliver the maximum possible benefit. 

What does each team need for Revenue Growth Management implementation? 

It’s easy to say that different units within a CPG manufacturer have different roles to play when implementing revenue growth management. But what does that that look like in practice? And what might be holding them back from playing their part? 

Sales 

Sales teams want to achieve results, and they want to build the commercial relationships that will help them achieve these. But this is about much more than building a rapport with retail partners. It’s about developing a strategy for growth that encompasses trade promotions, pricing optimization, and trade investments.  

In the modern market, this needs to be data-driven, giving execs access to a wide range of information sources, and delivering rapid actionable insights into pricing and promotion activities. They can then optimize their current programs and develop well-grounded forecasts and innovative plans for the future. To be able to do this reliably, and at speed, they need workflows that give them the approvals they need but don’t hold them back. 

Marketing 

Marketing events and activations are critical to revenue growth management. Creativity and innovation are part of this, but so is building and maintaining the trust of both consumers and retailers.  

Marketing teams also need to have workflows that work for them, so they can gain approvals and move quickly, and track activations and campaigns over time. But they must also ensure that their activities are in sync with other teams. A creative campaign might go to waste if there is not sufficient stock in store. A campaign that is out of sync with trade promotion activity can undermine both.  

This all requires precise planning, careful budgeting, and efficient procurement. So, again, accurate information is essential. 

Finance 

CPG is a complex and fast-moving business, and for the finance team, just keeping up is not enough. It must keep ahead of things, if the organization is going to implement revenue growth management successfully.   

Producing up-to-date estimates and forecasts and developing analysis of investment and pricing strategies can involve a vast range of data, generated by multiple departments, potentially in different applications and formats. For finance to deliver an accurate picture to senior management, and beyond, it needs to have a grip on everything that is going on, both within the company and out in the market. 

Demand teams 

Revenue growth management can’t be a guessing game. Demand teams need to be able to create accurate baselines and statistically sound forecasts. 

The onset of AI has raised the bar when it comes to modeling data, and can free up forecasters, and their colleagues, to focus on exceptions and outliers. But that assumes demand teams are working with accurate historical and up-to-the-minute data. They must have clear insight into the activities that underpinned results in the past, and which should shape the business in the future. And they must have the right tooling to make the most of the data. 

IT 

Each team needs different tools to carry out their roles, but they all rely on timely, accurate data. The IT team is central to a CPG organization’s ability to implement revenue growth management.  

If tech can deliver a common underlying platform, which easily integrates data from multiple sources, they can break down silos and free individual teams from bespoke spreadsheets and tools and time-consuming manual processes. They can also deliver the configurations and workflows each team needs, while upgrades and new features are rolled out seamlessly. 

How does shared software enable Revenue Growth Management?

Revenue growth management holds the promise of predictable, sustainable revenue growth.  

However, there are all too obvious barriers to achieving this. Each team’s contribution and influence on the overall plan, as well as their required data and tooling will be subtly different. Often, they will evolve bespoke spreadsheets to underpin their functions.  

Just getting information into legacy tools can be a challenge. Automated data integration might not be possible. Manual processes are time consuming and can mean mistakes.  

When data lands in silos or standalone applications it can become stale. Teams might not have the most appropriate tools to analyze it. But worst of all, changes and insights can be locked into individual departments and not shared with the organization at large. This undermines efficiency, and the reliability of forecasts. 

But by opting for Visualfabriq’s software, CPG manufacturers can give their key teams the tools and workflows they need, along with the common data to power them, in a single software solution. Individual teams can coordinate and optimize their activities, for mutual benefit and maximum impact. 

Demand forecasters and sales teams alike can use cutting edge AI to analyze and model data, producing more accurate forecasts, gauging the impact of trade spend, and unlocking opportunities for innovation or growth. Marketing teams can ensure their activities are aligned with sales teams’ programs and speed up the approval process. 

And RGM and finance specialists will benefit from a holistic view of the myriad of activities and programs their organization is running. This in turn will ensure that the drive towards sustainable growth is embedded in every fiber of the organization – and that all of these are pulling in the same direction. 

Takeaways 

There’s a cultural aspect to revenue growth management in the CPG world. Each team needs to understand its role, and its contribution to delivering sustainable growth, as well as the importance of working with their peers and their partners in retail to achieve this.  

But this will be far easier if they are all using software that supports the key processes and teams that contribute to revenue growth management. A solution that ensures they are working with and sharing common data, and can deliver insights, instead of questions, wherever you are in the organization. 

To see how Visualfabriq’s software can enable you to implement revenue growth management which delights all your stakeholders, book a demo today.

Five steps to make a marketing activation plan for CPG

A well-built and executed marketing activation plan is essential for a consumer packaged goods (CPG) manufacturer – it is the key ingredient for building trust, loyalty, and awareness with consumers. In today’s landscape, CPG firms must navigate a variety of channels, both above and below the line, to find the perfect mix to connect with their audience. This article describes 5 key steps to create a Marketing activation Plan for CPG: 

• Market research and analysis
• Defining brand identity and objectives 
• Targeting and segmentation 
• Marketing strategies and tactics 
• Budgeting and measurement

Market Research and Analysis

The first step in building a successful marketing activation plan for a CPG brand is to do thorough market research and analysis. This is based on gathering valuable data and insights to understand the target audience, industry trends, and competitors. Here are a few tips and must-do’s for conducting effective market research: 

1. Understand the audience. Know your customers inside out. Identify their demographics, preferences, needs, and pain points. This will help you tailor the marketing activation plan to specifically resonate with them and boost engagement. 

2. Know your industry trends and market conditions. Stay up to date with the latest trends, innovations, and shifts in your industry. Being aware of market conditions helps you identify opportunities and potential challenges for your brands. 

3. Map your competitors’ strengths, weaknesses, strategies, and market positioning. Understanding what others are doing will guide you in differentiating your brand and offering unique value to consumers. 

4. Make full use of data sources and analytics. Use data sources such as internal commercial data, market reports, social media analytics, and website traffic data, to gain deeper insights into consumer behavior and preferences. 

5. Create a market segmentation analysis. Divide your target market into distinct segments based on shared characteristics. This allows you to tailor your marketing messages and tactics to specific groups effectively. 

6. Identify the main opportunities and threats: Analyze the findings to identify opportunities for growth in the market and potential threats to your brand’s success coming both from the market and/or your competitors. 

Market research and analysis will form the foundation for your marketing activation plan, providing crucial insights that will inform your brand’s positioning, messaging, and overall marketing strategy. By understanding your target audience and the market landscape, you can create a compelling and effective marketing activation plan that resonates with consumers and sets your CPG brand on the path to success. 

Defining Objectives 

Defining your brand objectives is a essential step in creating a winning marketing plan for your CPG brand. Start by identifying your unique selling propositions (USPs) and explore the brand identity that sets you apart from competitors.

Next, set clear and achievable marketing objectives, whether it’s increasing market share, launching new products, or expanding distribution channels. Ensure these objectives are specific, measurable, achievable, relevant, and time-bound.

Emphasize the alignment between your brand’s values, mission, and marketing objectives. When your marketing efforts reflect your brand’s core beliefs, it creates a strong connection with consumers and builds brand loyalty.

By defining your USP, setting clear objectives, and aligning with your brand’s values, you lay the foundation for a successful marketing plan that resonates with your target audience and leads your CPG brand to long-term success.

Targeting and Segmentation 

Defining a precise and well-defined target audience is the foundation of a successful marketing strategy for your CPG brand. 

Create detailed buyer personas that represent the ideal customers. By understanding the audience’s demographics, preferences, behaviors, and pain points, you will be able to tailor the marketing strategies to resonate deeply with them.  

These personas will help you to craft messages and content that speak directly to their specific needs, resulting in more effective communication and engagement. Whether catering to busy parents in search of convenient meal solutions or health-conscious millennials looking for sustainable products, a clear understanding of the target audience will empower you as a marketeer to connect on a personal level and establish an emotional bond.  

This intimate knowledge will also be a guide in selecting the most appropriate channels and platforms for reaching the audience, ensuring your marketing efforts are focused and impactful. Ultimately, defining a target audience is a fundamental step that allows marketeers like you to build meaningful relationships and drive customer loyalty through targeted and relevant marketing initiatives.

Marketing Strategies 

Exploring effective marketing strategies isn’t just a choice, it’s a must-do when creating a marketing plan for consumer packaged goods (CPG) brands. 

Marketers must dive into a spectrum of marketing channels and strategies that can work wonders for their brand, including digital marketing, social media, influencer partnerships, content marketing, and even traditional advertising. To hit the bullseye, you should opt for strategies that flawlessly align with the target audience’s behaviors and preferences.  

Each strategy has its own unique strengths. Digital marketing brings precision targeting and measurable outcomes. Social media creates direct engagement. Influencer partnerships harness trusted voices. Content marketing establishes your brand’s authority. And traditional advertising reaches wider audiences.  

The ace in the hole for a marketeer? Thoughtfully selecting and blending these strategies to create a marketing mix that supercharges your brand’s impact and resonance. With audience insight as a guiding star, you should adapt each strategy to seize attention and convert potential customers into loyal advocates. 

Budgeting and measuring 

Navigating the waters of budgeting and measuring isn’t just another item on a to do list. It’s a pivotal aspect of executing a marketing activation plan for consumer packaged goods (CPG) brands. 

Marketeers need to allocate their resources wisely across their chosen strategies, weighing potential return on investment (ROI) against each one. Keep a watchful eye on the purse strings and be ready to adjust as necessary.  

Equally crucial is the art of measurement – track key performance indicators (KPIs) with eagle-eyed precision. Whether it’s website traffic, conversion rates, social media engagement, or sales figures, these metrics are your North Star, guiding you and your team towards a clear understanding of marketing efforts’ effectiveness. 

By deciphering these numbers, marketeers unveil insights that can propel their brand forward. Adapt and optimize strategies based on these findings, turning data into actionable steps for growth. The road ahead isn’t fixed; it’s a journey of constant improvement fueled by the insights uncovered. 

Explore Visualfabriq’s Marketing Events solutions and book a demo today.

Visualfabriq receives 4 best-in-class recognitions from POI 

Visualfabriq is on a mission: to revolutionize revenue forecasting and optimization. We’re happy to announce that our software received 4 best-in-class distinctions from the 2023 POI Enterprise Planning Vendor Panorama.

The independent analysis from the Promotion Optimization Institute (POI) supports leaders in the CPG industry to select the right software for their organization to drive critical business transformation. To be awarded 4 best-in-class distinctions by POI recognizes the hard work and dedication of the team to deliver cutting-edge solutions that drive transformation in the consumer-packaged goods (CPG) industry.   

Visualfabriq enables leaders in the consumer-packaged goods (CPG) industry to make the best decisions to drive profitable revenue growth, based on a reliable outlook. At the same time, the software as a service (SaaS) frees up the time of commercial teams to take data-driven actions that make the difference. 

Visualfabriq’s best in class distinctions:

Here are the areas where Visualfabriq has been recognized with Best-in-Class Distinctions by POI:  

• Landing Dashboard
• Enterprise Planning IBP: S&OP Capabilities
• HQ Analytics & Insights
• RGM for Tier 2 & 3 Organizations: Other Tier 1 International Geos

The commitment to innovation and excellence has set Visualfabriq apart in the industry, and it is an honor to be acknowledged for our achievements. Visualfabriq is proud to provide customers with a full outlook on their commercial performance in a manner that supports enterprise planning and drives HQ analytics and insights. The modular, scalable software enables CPG organizations of any size to optimize their commercial investments, which is recognized by POI. 

Thank you for being part of this journey and stay tuned for more exciting news as Visualfabriq continues to revolutionize revenue forecasting and optimization! 

To read more about Visualfabriq’s capabilities, download the Enterprise Planning excerpt for Visualfabriq.

To access the full POI 2023 Enterprise Planning Vendor Panorama report, click here: 

https://poinstitute.com/membership

Membership includes complimentary passes to upcoming POI events including the POI Fall Hybrid Summit, November 8-10, 2023, having access to the quarterly POI Manufacturer Connect Share Group and much more.  For company/team membership, please contact Joanie Malin [email protected]  

Annual Planning in CPG: Navigating the path to success

As the warmth of summer fades, Consumer Packaged Goods (CPG) companies start getting busy with a crucial task – planning for the year ahead.  

This is when CPG companies carefully prepare their actions for the next year, setting the stage for growth, for making profits, and developing smarter strategies. In this article, we’ll look closely at the main parts of yearly planning in the CPG world and see how technology, especially AI-powered software, is changing how things are done. 

Key Elements of Annual Planning 

Demand Volume Planning 

Predicting consumer demand is a perpetual puzzle in the CPG industry. Underestimating demand can lead to stockouts, missed opportunities, and disappointed customers, while overestimating can result in excess inventory and financial strain. The annual planning process provides a dedicated window to address this challenge. CPG companies meticulously assess historical data, market trends, and emerging consumer preferences to refine their demand volume forecasts. By doing so, they can better allocate resources, optimize supply chain operations, and strike a delicate balance between meeting customer demands and minimizing excess stock. Effective demand volume planning ensures that CPG companies are prepared to meet the needs of their target audience without facing unnecessary risks. 

Trade Pricing 

Trade pricing plays a pivotal role in determining market competitiveness and profitability. In preparation for the year ahead, CPG companies will conduct a meticulous review of their product pricing strategies. This analysis includes defining recommended selling prices to attract consumers and ensure healthy profit margins. Annual planning provides a dedicated space for recalibrating pricing strategies, taking into account market trends, competitor activities, consumer preferences, and the drift in costs of goods sold, such as changes in commodity prices, changes in labor costs, transport, energy etc. With a clear understanding of how pricing impacts the bottom line, CPG companies can strategically position their products to maximize revenue while maintaining customer loyalty. 

Trade Contract Planning 

The bonds between CPG companies and retailers are forged through trade contracts which determine everything from promotional activities to shelf space allocation.  As annual planning approaches, CPG companies theoretically have a unique opportunity to revisit and refine these contractual arrangements, although this isn’t always a straightforward process. In reality, changing the structure of a contract can sometimes lead to significant conflicts with retailers. Moreover, it’s essential to consider an assessment at the channel level. By reassessing the terms of engagement, both parties can realign their objectives, ensuring that trade contracts are mutually beneficial. This meticulous process not only fosters stronger relationships but also sets the stage for collaborative growth. Annual planning serves as a forum for renegotiating contracts, underpinning a harmonious partnership through the year ahead. 

Trade Promotion Management Planning 

Trade Promotion Management (TPM) is central to engaging consumers and driving sales in the CPG world. However, orchestrating effective trade promotions and managing associated marketing spend is a multifaceted challenge. As annual planning unfolds, CPG companies take the opportunity to fine-tune their TPM strategies. This involves analyzing past performance, consumer behavior trends, and market dynamics. By aligning these insights with the broader annual plan, CPG companies can craft promotions that resonate with consumers and yield substantial returns. Finetuning TPM during annual planning ensures that promotional activities are strategically positioned to maximize impact, bolster sales, and enhance brand visibility. 

Streamlining Annual Planning with Technology 

Utilizing Planning Tools 

Technology has emerged as the compass that guides CPG companies through the intricacies of annual planning. Planning tools streamline the process, replacing manual spreadsheets with efficient, automated solutions. This shift not only saves time but also ensures accuracy and consistency across the planning landscape. 

Single Source of Truth with AI-Enhanced Software 

Data is gold, and AI-enhanced software is the alchemist that turns data into insights. Such software serves as a single source of truth, providing accurate, and actionable data for decision-making. With a reliable outlook, CPG companies can confidently navigate the complex waters of annual planning. 

Empowering Informed Decision-Making 

Think of annual planning like mapping out a road trip. A clear roadmap frees teams to focus on strategic initiatives rather than battling uncertainties. This is what the “one-number principle” is all about – instead of spending time debating whether the numbers are right, everyone agrees on a single set of figures, just as fellow travelers agree on which route to take. This means the team can move on from discussing the truth to planning for the future. With this approach, businesses can concentrate on strategic initiatives that push them forward rather than getting stuck in endless debates about details. And that’s where technology comes in. It provides decision-makers with tools to optimize and information that helps them make smart choices. This kind of agility is crucial in a fast-changing market where adaptability is key. Just as a good map makes a road trip smoother, technology makes navigating the business landscape easier and more effective. 

Visualfabriq: Revolutionizing CPG Annual Planning 

Performance Enhancement 

Visualfabriq’s software revolutionizes the performance landscape for CPG companies. It provides commercial leaders with a comprehensive view of their Profit and Loss (P&L), spanning volume and value aspects. This panoramic view equips them to make data-driven decisions that align with overarching business objectives. 

Process Optimization 

In the intricate dance of trade contracts, promotional strategies, and pricing, Visualfabriq takes the lead. The software enables commercial teams to optimize promotional, marketing, and contractual spend, introducing a meticulous, audit-proof workflow. This process optimization translates to heightened efficiency and compliance, all within a seamless user experience. 

AI-Driven Decision-Making 

Visualfabriq’s unique power lies in its AI-driven expertise. It combines advanced data integration and AI-powered predictions to provide insights that help in understanding upcoming market trends, consumer behavior, and demand patterns. This predictive capability empowers organizations to make well-informed decisions that are oriented toward the future. With Visualfabriq, uncertainty is diminished, and decisions become more insightful. 

Achieving Growth and Efficiency 

During CPG annual planning, the equation for success is simple yet profound: growth and efficiency. Visualfabriq’s software paves the way for organizations to achieve both. By enhancing performance, optimizing processes, and harnessing the power of AI, CPG companies unlock the potential for predictable, long-term revenue and profit growth, all while maximizing operational efficiency. 

As CPG companies embark on their annual planning journey, tradition and technology converge. Trade pricing, trade contract planning, TPM planning, and demand volume planning are the cornerstones of strategic decision-making. Through the lens of technology, annual planning is elevated, becoming not just a routine but a transformational event. With tools like Visualfabriq’s software, the path to success becomes clearer, the destination achievable, and the future promising. In the consumer packaged goods landscape, technology is the compass that guides CPG companies towards growth, efficiency, and prosperity. 

Explore Visualfabriq’s solutions: Trade Promotion Master, Trade Spend Master, and Demand Forecasting.

How can Revenue Growth Management maintain your post-vacation vibe all year round?

When we return from our summer vacation, we should feel more than relaxed and tanned. We should feel refreshed, optimistic, and ready to try new ways of doing things. We should feel like everything just got…easier. 

Then, at least in the consumer-packaged goods (CPG) world, reality hits. Workloads spike as we begin planning for the year ahead. This means negotiations with retailers, coordinating with colleagues, and planning strategies for the year ahead. 

This can be stressful. But that’s when the benefits of our downtime should really kick in. We should be drawing on that energy, that urge to try new ways to do things, that new-found sense of agility. 

But nothing crushes that vacation vibe quite like the realization that, in truth, nothing will change. That a combination of legacy systems and legacy thinking means the space to innovate is minimal at best.  

Instead of making leaps and bounds in increasing revenue or market share, team members are stuck, working their way through a succession of spreadsheets. They have little autonomy to identify new opportunities, think “what if?” or otherwise make a difference.  

Smart CPG organizations know that this is fatal. Not just because it does little to grow revenue or increase value. But because it grinds down talented people, ultimately leading to a brain drain. Which is why taking a holistic approach to building sales, or adopting revenue growth management (RGM), is crucial in CPG.

Revenue Growth Management and its benefits

A whole spectrum of teams and functions play their part in ensuring a CPG brand’s success, from demand forecasters to sales teams to marketers to trade promotion specialists.

Each has a role not just in growing sales for the company, but in creating value for consumers and retailers. And the best outcomes arise if they are all working together, creating an optimal mix of strategies spanning pricing, placements, marketing, and assortment optimization.

The Revenue Growth Management model aims to get all those individuals and teams collaborating and sharing data and insights, under a comprehensive commercial plan to deliver sustainable and profitable growth.

But developing that plan assumes they have a common version of the truth against which to plan and review their promotions, marketing plans, and other activities. Establishing that truth becomes much easier to achieve when different teams are operating on a common platform which allows the seamless integration, sharing and analysis of data.

This removes the danger of misalignment between departments or layers of management, whether it’s the marketing department not coordinating activity with the promotions team, or the CEO questioning the foundations of the sales team’s forecasts.

But it also removes much of the drudgery and friction which can undermine morale and stifle innovation, not just after a vacation break or at busy times but all year round.

How Visualfabriq supports the key components of Revenue Growth Management

Visualfabriq’s Revenue Forecasting and Optimization solution supports the most crucial elements of revenue growth management (RGM). With distinct but connected modules covering trade promotions, trade investment, trade pricing, marketing investment and commercial planning it allows you to coordinate and optimize across the critical domains underpinning Revenue Growth Management. 

Seamless data integration, including external sources, and cutting-edge AI technology mean better grounded forecasts and more flexible planning.  

Configurable workflows and common data mean teams are working together with the same version of the truth. Each can see how their activities and initiatives are contributing to the business overall. Instantly. And it gives them the freedom to optimize or change their plans as needed. 

In the short-term, this means the post-vacation planning period becomes a smooth ramp-up towards those critical retailer negotiations, instead of a stressful scramble. 

Longer term, it means that individuals and teams can maintain that open-minded, optimistic post-vacation outlook all year round. They have the data and visibility to spot new opportunities and develop fresh approaches and are agile enough to react to the unexpected, whether that’s local disruptions or global dislocations. 

Maintaining the vacation spirit all year with Revenue Growth Management

An environment that is data driven and focused on collaboration is just the start. A true revenue growth management approach eliminates inefficiency and removes friction. It means commercial teams always have up-to-the-minute insights and are always well-prepared for negotiations with retail partners. 

It means each professional and each team becomes better aligned, so that all strive for the best possible outcomes, whether that’s increasing ROI on promo spend, deepening connections with consumer and retailers, or simply increasing profit overall. 

Because they have visibility across their activities, and the company as whole, team members can see the effect of their activities while they’re in progress and optimize them as necessary. 

It also removes the stress and frustration that comes from working with rigid systems and tooling, and knowing the space for agility and fresh thinking is limited at best. 

This is a crucial part of maintaining a CPG brand for the long-term. Losing market share or revenue is bad, but losing talented people is worse – because when the unexpected happens, whether that’s an opportunity or a disruption, that’s when you need them most. 

Conclusion

Switching to a revenue growth management model and putting the right tooling in place frees up CPG professionals to rethink how they build the business, whether their expertise is in promotions, pricing, forecasting, planning, or marketing. 

When they know they can trust the forecasts and data, they’re able to focus on optimizing and improving what they do, strengthening the business for the long term. 

The tan might fade but keeping that post-vacation vibe all year round can re-energize a business. To see how Visualfabriq’s Revenue Forecasting and Optimization solution can help you do this, head here and book a demo. 

Trade Promotion Optimization: Drawing a winning CPG strategy roadmap

Trade promotion and trade promotion optimization are key to fostering the long-term success of a consumer-packaged goods brand. Innovative trade promotion strategies can keep customers in love with a product and retailers committed to its success.

But if developing a trade promotion optimization strategy or preparing for a retailer meeting means your account team turns to spreadsheets full of cut and pasted data and reworked promotion plans, you might already be on the wrong track.

Legacy approaches – and legacy technology – can mean account professionals spend too much time pulling data from disparate legacy systems or cutting and pasting information into spreadsheets.

What little time is left is spent simply going through the motions of planning trade promotions each year. Haggling over a fraction of a percent here, a placement there.

This means it’s easy to miss the bigger picture. The one that includes looking for new ways to reach customers with promotions that will delight them. The one that shows account teams drilling down into data and creating reliable forecasts, to create and share value in partnership with retailers, and to strengthen brands and products for the long-term.

That is why account managers with an eye on the future shouldn’t be thinking about trade promotion management alone, but include trade promotion optimization (TPO) to their repertoire.

Rather than hoping for a few points of growth from the same promotions every year, the emphasis should be on developing strategies that will maximize promotional return on investment (ROI), improve trade spend efficiency and nurture collaboration with retailers.

How Trade promotion optimization transforms strategies

Trade promotion optimization begins with pulling together historic data, along with consumer insights, market and syndicated data, and subjecting them to advanced analytics and AI. This will uncover historical patterns, which become the starting point for much more accurate forecasts. 

This in turn allows account managers to take a more holistic approach to planning. It means they can model the impact of different promotions, and incorporate other types of information, such as behavioral and lifestyle data, or even seasonal patterns. This encompasses the full gamut of metrics, such as sales, profit, and market share. 

With the right data, and the right platform, planners can better plan their strategies and optimize them as they’re developing them. This can inform a more innovative approach to trade promotion optimization, spanning pricing, bundles, placements, and broader marketing. 

And because the world changes quickly, a true TPO strategy should be able to incorporate new data while promotions are in progress. This allows account managers to measure trade promotion effectiveness, allowing them to tweak future events, even halting them if necessary, making trade promotion optimization a continuous process. 

The result is better return on trade investments, both for the manufacturer and retailer, AND better value for consumers.

Common challenges moving to Trade Promotion Optimization

Account managers, in theory, have a wealth of data they can draw on to plan their strategies, from their own ERP and other systems, to market and third-party data.  

But drawing all this together in a coherent manner is often a challenge. Data might be in different formats, or incomplete. Even if they can pull together reasonably clean data, too often account teams must use homegrown, spreadsheet-based tooling to analyze it and produce their trade promotion forecasting. These can leave professionals bogged down in manual tasks such as pulling and cleansing data, only to produce insights that say more about the past than the future.  

Alternatively, they may be stuck with nominally integrated, but still clunky suites, often derived from a series of point products. These may force them to switch between different views depending on whether they’re forecasting, planning, or looking to see how their promotions are panning out. 

In the absence of a holistic view across all brands, and all promotions, it’s all too easy for account managers to default to a “this is how we’ve always done things round here” approach.  

This can mean repeating strategies that worked in the past, cutting and pasting in plans from the previous year even as they’re cutting and pasting in incomplete data. It becomes easier to haggle over placements or fractions of a percent of trade spend, rather than evolving new strategies or promotional techniques to replace those which are no longer delivering. 

And while trade promotion optimization specialists play a crucial role in their company’s success, there are other parties involved too. Siloed systems make it harder to coordinate and collaborate with colleagues within the organization, and partners and suppliers outside. 

Either way, precious time and energy is eaten up before any forecasts or insights are even developed, or negotiations can begin. 

This further reduces the bandwidth which professionals can apply to modelling alternative scenarios, developing, and testing new approaches, and, crucially, sharing their insights with their colleagues and their retail partners. 

So, trade promotion optimization can require a cultural change, as well as a technological one. But the benefits can be truly transformative.

Some benefits of TPx

Perhaps a more appropriate abbreviation is TPx, or the combination of trade promotion management and trade promotion optimization, all within a single software solution.

The benefits of such an approach are substantial. A broader range of more reliable data, together with cutting-edge analysis, results in more reliable forecasts and more focused planning.

Account managers, and their colleagues and collaborators, gain better visibility across their operations, spotting underperforming promotions and identifying and highlighting new opportunities.

Immediate benefits include improved return on investment on trade promotions and investment in general, and ultimately increased sales growth and profits growth.

Longer term, account managers can develop deeper, more collaborative relationships with retailers, and can refine their go to market strategies, optimizing market position, and increasing market penetration.

Winning with Trade Promotion optimization – Your path forward

Trade promotion optimization is central to ensuring the success of a CPG portfolio, whether the team is looking at the year ahead, or taking a longer-term view.

Trade promotion optimization means account teams can develop more accurate forecasts, which means better planning. They can gain full visibility into their strategies, both at the planning and execution stage. The result is a more agile, more efficient approach that leads to better performing promotions, improved revenue and profitability, and deeper relationships with retailers and consumers.

But achieving this means giving account teams tools that enable them to apply their expertise to the most pressing challenges, rather than trapping them in legacy processes.

To find out how Visualfabriq’s platform can free up time to implement trade promotion optimization, head here download our brochure and arrange a briefing.

Combining data sources in the CPG industry: A guide to optimizing data utilization 

Data is the driving force behind informed decision-making and business growth in the dynamic Consumer Packaged Goods (CPG) industry. 

Companies that leverage the power of data can gain a competitive edge, but the process of gathering, managing, and utilizing that data can be complex.  

In this blog, we’ll explore strategies to maximize data utilization while bidding farewell to manual data entry. We’ll delve into the challenges and benefits of integrating internal and external data sources, evaluate commonly used data sources, and shed light on the implications of real-time reporting. Additionally, we’ll explore the value of unexpected data sources in making better decisions. 

Maximizing data utilization: No more manual entry 

Manual data entry is not only time-consuming but also prone to errors. In the fast-paced CPG world, every minute counts, and belated insights and inaccuracies can lead to misguided decisions. The key to optimization lies in reducing manual data entry through automation. By utilizing modern tools with sophisticated data integration, businesses can streamline data collection, ensure accuracy and free up valuable resources for strategic analysis. 

Integrating internal and external data sources in CPG

Realizing the true potential of data utilization in the CPG industry depends on integrating multiple relevant data sources, both internal and external. Internal data encompasses information generated within the organization, such as sales figures and inventory levels. External data, on the other hand, includes syndicated data, market trends, customer behavior data, competitor analysis, and customer sentiment from 3rd party sources. 

While integrating these diverse data sources can be challenging, the benefits are immense. Businesses can gain a holistic view of the market, enabling them to make more informed decisions and adapt swiftly to changing conditions. By breaking down data silos, organizations can uncover hidden patterns and insights that drive growth.

Evaluating common data sources and their limitations 

In the CPG industry, understanding the limitations of data sources is crucial. Widely used sources, for example syndicated data such as Nielsen or IRI data, provide valuable insights into consumer sales, market trends and competitor performance. However, these sources may also have limitations, such as data latency (the delay in receiving the data), incomplete coverage, or a lack of real-time updates. 

To mitigate these limitations, businesses must carefully assess the purpose, reliability, accuracy, and timeliness of the data sources they use. Additionally, exploring alternative data providers can help uncover new perspectives and fill gaps in the existing data.

The implications of real-time reporting

The power of real-time reporting is undeniable in the CPG industry. Swift insights and up-to-the-minute data promise enhanced decision-making and agility. However, it is critically important that real-time insights are aligned with actionable strategies. 

The value of real-time reporting hinges on its translation into impactful action. Imagine a promotion that underperforms—real-time insights can uncover execution issues like store placement discrepancies. Yet, fixed promotional timelines or pre-printed materials can make it difficult to make immediate adjustments. 

Similarly, a successful promotion might suggest a need for increased volume but this must be balanced against operational realities. Real-time data may signal a thriving promotion, but a constrained supply window may impede swift responses to prevent stockouts. 

In essence, while real-time reporting offers a transformative edge, its effectiveness is anchored in organizations’ readiness to take timely, informed actions. Achieving a balance between the two empowers businesses to leverage real-time insights effectively, fueling agility and competitiveness.

The role of unexpected data in CPG decision-making

Sometimes, unexpected data sources can be of real value. One often overlooked but essential factor in CPG decision-making is weather data. Weather has a profound impact on consumer behavior and product demand. For example, ice cream sales tend to surge on hot summer days, while comfort food sales may rise during chilly winters. As with real-time data, often the opportunity to boost sales is tempered by operational realities.  

However, the explanatory value of a source like weather data remains: a hot cocoa promotion performing much better due to uncommonly cold temperatures should not necessarily lead to overall increased expectations of hot cocoa sales. Instead, in these situations organizations often choose to resort to smoothening for prediction models. The value of sources such as weather data, if not directly useful for forecasting, often lies in post-evaluation and learnings for the future. 

Takeaways 

Unlocking and combining data sources in the CPG industry is a transformational journey that requires a strategic approach. By maximizing data utilization, integrating internal and external data sources, evaluating their limitations, assessing where real-time reporting adds value, and what unexpected data sources contribute to their predictions and evaluations, businesses can gain a competitive advantage. The road ahead may be challenging, but the rewards in terms of improved decision-making, market responsiveness, and growth potential make the effort well worth it. In the ever-evolving CPG landscape, those who harness the power of data are the ones who will thrive. 

Visualfabriq revolutionizes data integration in the CPG industry, streamlining the process by eliminating manual data entry. It seamlessly combines both internal and external data sources, providing a holistic view of business operations and optimizing data utilization. 

The real-time data connection across different functionalities of the software truly sets Visualfabriq apart. The impact of entries, for example, an added promotion, flows to the full volume to value P&L, empowering CPG companies to review results of their plans and make agile decisions. Additionally, the software has the flexibility to load relevant data such as open orders, offering near real-time insights tailored to specific business needs. At the same time, it acknowledges that not all scenarios require the constant flow of real-time data. This highlights the importance of balancing practicality and strategic utilization of real-time insights. 

And yes, one aspect of Visualfabriq is its integration of weather data. Weather significantly influences consumer behavior, impacting sales and product demand. By incorporating this data, CPG companies gain a deeper understanding of and can better evaluate promotional performance. This deeper insight enables businesses to fine-tune promotions, enhance inventory management, and ultimately boost revenue. 

Visualfabriq offers a comprehensive solution to data integration, converting fragmented information into actionable insights. When they receive actionable insights rather than just information, CPG companies can make informed decisions, seize revenue opportunities, and gain a competitive advantage in the dynamic CPG landscape. If you are looking to maximize the potential of data for driving revenue growth, book a demo with us today.

Achieving Holistic Pricing with Trade Spend Management Software    

Success for sales teams in the consumer-packaged goods (CPG) industry hinges on evolving effective trade spend strategies that balance maximising revenue, satisfying retailers’ demands and keeping products affordable for consumers.  

Trade spend management (TSM) software can be a true gamechanger here, enabling sales teams to navigate complex pricing landscapes with both agility and precision.  

This article delves into the concept of holistic pricing and shows how Trade spend optimisation within Trade Spend Management empowers CPG sales teams to enhance profitability and build lasting partnerships with retailers.

The Complexity of Holistic Pricing 

Holistic pricing is a comprehensive approach to determining product prices that factors in various elements, including production costs, market demand, competitive landscape, and retailer relationships. Traditional pricing strategies were often static and lacked the flexibility needed to adapt to dynamic market conditions. However, the evolving nature of the CPG industry demands a more agile and data-driven approach. 

Holistic pricing recognises that pricing decisions are entwined with a multitude of factors, such as promotional strategies, contract negotiations, and consumer behaviour. The challenge lies in synthesising this intricate web of variables to make informed pricing choices that align with business goals while satisfying retailer requirements. 

Trade Spend Management Software (TSM) 

Trade spend management software is a powerful tool that allows CPG teams to tackle the complexities of holistic pricing head-on. It provides a centralised platform for sales teams to analyse, strategize, and execute pricing and promotion plans in a data-driven manner. TSM software leverages advanced algorithms and combines multiple, relevant data sources (e.g., ex-factory data, syndicated data) to enable sales teams to make informed decisions that enhance profitability and foster collaborative relationships with retailers. 

How Trade Spend Management Software Helps Holistic Pricing 

Scenario Creation and Analysis: Holistic pricing depends on a keen understanding of market trends and consumer behaviour. TSM software enables sales teams to create multiple scenarios that reflect different pricing strategies, promotional plans, and contract terms. This dynamic approach allows teams to analyse the impact of various factors on revenue and profitability, helping them make better informed decisions. 

Data Integration and Automation: Trade spend management software integrates effortlessly with ERP systems like SAP, ensuring that data flows easily between platforms. This eliminates the need for manual data entry and reduces the risk of errors, enabling sales teams to focus on strategic decision-making. 

Retailer Collaboration: Through the seamless integration of syndicated data, trade spend management software provides visibility on retailer profitability. This facilitates effective collaboration between manufacturers and retailers by providing transparent insights into pricing, promotions, and contractual terms. This transparency builds trust and enhances communication, leading to more productive negotiations and stronger partnerships. 

Profitability Analysis: Trade spend management software supplies a comprehensive view of revenue and profitability, including gross profit, and retailer margin analysis. Sales teams can assess the impact of pricing changes and promotional activities on overall profitability, ensuring that decisions align with financial objectives. 

Agility and Decision Making: With TSM software, sales teams can adapt quickly to changing market conditions and emerging opportunities. The ability to generate actionable insights and scenarios in real time empowers sales teams to make on-the-spot decisions during negotiations, fostering a more agile approach. 

Audit-proof Approval Flow: TSM software features an audit-proof approval flow, facilitating a systematic process for obtaining approvals from stakeholders. Sales teams create pricing, contracts, and promotional scenarios which are presented as detailed proposals, and which undergo collaborative feedback and multi-level approvals, all recorded in a comprehensive audit trail.  This means that CPG teams can be confident their pricing strategies will meet compliance and accountability standards. 

A Single Architecture: Efficient Trade spend management software employs a unified single architecture, eliminating the need to knit together different software solutions. This creates a one-number principle, which enhances efficiency and alignment across the organization by synchronizing data smoothly across all functionalities. With real-time, accurate information on pricing, promotions, and contracts available throughout all software functions, sales teams can make well-informed decisions, fostering a collaborative and synchronized approach to trade spend management. The centralized database and streamlined processes optimize workflow efficiency, reducing the duplication of efforts, and enabling a cohesive pricing strategy that aligns with financial objectives. 
 

Navigating a Holistic Pricing Strategy with TSM 

Imagine a CPG sales team preparing for negotiations with a major retailer. Using trade spend management software, the team can create multiple scenarios that explore different pricing and promotional strategies. They can assess the impact of a range of factors such as price increases, promotional spend, and contract terms, on profitability. By considering retailer-specific demands and market trends, the team can develop a balanced approach that maximises revenue without compromising profitability. 

During negotiations, the sales team can employ TSM software to address retailer queries and adjust pricing strategies on the spot. The software’s real-time insights and scenario analysis empower the team to make informed decisions that align with both parties’ interests. As a result, the negotiations are more productive, and a mutually beneficial agreement can be reached. 

Takeaways 

Holistic pricing is a strategic requirement in a CPG world that demands a deep understanding of market dynamics, retailer relationships, and consumer behaviour. Trade spend management software’s ability to create and analyse multiple scenarios, integrate data seamlessly, adapt to market trends, and foster retailer collaboration, gives sales teams a competitive advantage. By leveraging TSM software, CPG sales teams can optimise profitability, enhance decision-making, and establish enduring partnerships with retailers. As the CPG industry continues to evolve, embracing holistic pricing through TSM will be the cornerstone of success for forward-thinking sales teams. 

With a focus on holistic pricing strategies and data-driven insights, Visualfabriq’s trade spend management software offers your sales teams an essential tool to enhance decision-making and strengthen collaborations with retailers. Delve into the possibilities of a more informed and effective CPG sales strategy by scheduling a demo today. To learn more and explore the benefits, click here.