7 effective trade promotion strategies for 2025: best practices to drive success

Trade promotions are a cornerstone of the consumer-packaged goods (CPG) industry. But are you getting the most out of your promotional efforts? In an industry where profitable revenue growth is key, optimizing trade promotions can make a significant difference in your top and bottom line. By adopting effective trade promotion strategies and following best practices, you can reduce waste, enhance efficiency, and drive better returns on investment (ROI). 

In this blog post, we’ll break down essential strategies and best practices for trade promotion success. From setting clear goals to leveraging data and technology, we’ll cover everything you need to know to maximize the impact of your promotional activities. Whether you’re looking to increase sales, gain market share, or launch a new product, these strategies will help you achieve your objectives and drive success. 

Ready to take your trade promotions to the next level? Let’s dive into the best practices and explore the seven effective trade promotion strategies that will set you on the path to success. 

Trade promotion strategies best practices

1. Treat promotions as part of the total annual investment 

Trade promotions should be viewed as an integral part of your overall budget and commercial strategy, not just one-off tactics. Why is this a best practice? Promotions are often value dilutive, but they can be crucial for keeping competitors at bay, generating trials, and maintaining market share. In the CPG industry, promotions have become a staple, and there’s no turning back. 

Consider why promotional spend should be regarded as part of the total annual investment. Ultimately, what matters is that the total sales are profitable. You can only spend your money once, so if you overinvest in the trade contract, there will be fewer promotions, and vice versa. When aligned with broader business objectives, promotions contribute to the long-term financial health of the brand. 

For example, imagine a CPG brand allocating 25% of their trade funds to promotions and tracking it as part of their overall growth strategy. This approach ensures that trade promotions are seen as long-term investments, driving sustainable growth. 

2. Set clear and specific goals for each promotion 

Every trade promotion should have one focused objective—whether it’s boosting sales, increasing market share, or launching a new product. Why is this a best practice? Trying to achieve multiple goals, such as sales and brand awareness, can dilute effectiveness and make performance hard to measure. 

For instance, imagine a seasonal promotion targeting a 300% sales uplift for a specific product SKU. By having a clear and specific goal, you can better target your efforts and evaluate the promotion’s success afterwards. 

In other words, setting a clear objective ensures better targeting and post-promotion evaluation. It allows you to measure the promotion’s impact accurately and make data-driven decisions for future campaigns. 

3. Conduct thorough pre-promotion planning and forecasting 

Planning ahead is crucial for the success of any trade promotion. By using AI and machine learning to analyze current and historical data, you can forecast the potential outcomes of your promotions. This ensures you don’t run into stock issues, overspend, or miss performance targets. 

Why is this a best practice? Thorough planning helps you select the optimal mechanism for the goal assigned to the promotion. For example, predictive analytics can help a CPG manufacturer forecast higher demand for an in-store promotion, avoiding stockouts and ensuring that the promotion runs smoothly. 

Careful planning reduces risks and sets realistic expectations for success. It allows you to make informed decisions and adjust your trade promotion strategies based on data-driven insights and best practices. 

“46% of CPG companies will deploy what-if promotion evaluation capabilities” — POI 2024 State of the Industry Peer-Benchmarking Report

4. Always pre- and post-evaluate promotions 

Evaluating promotions both before and after they run is essential for assessing their potential and actual performance. Pre-evaluation helps fine-tune your approach, ensuring that the promotion is set up for success. Post-evaluation, on the other hand, assesses whether the promotion met its objectives and provides valuable insights for future trade promotion strategies. 

Why is this a best practice? Pre-evaluation allows you to make necessary adjustments before the promotion goes live, increasing the chances of achieving your goals. Post-evaluation helps you understand what worked and what didn’t, enabling continuous improvement and data-driven decision-making. 

For instance, using TPM/TPO software like Visualfabriq to measure ROI after a large promotion unlocks valuable data insights that can inform future campaigns. By systematically evaluating your promotions, you gain a deeper understanding of the drivers of impact, allowing  you to optimize your strategies for greater success. 

5. Leverage data and technology to optimize trade promotions 

In today’s digital age, using advanced tools and data analytics is essential for optimizing trade promotions. CPG teams can no longer afford to work with fragmented, disconnected, and unfit-for-analysis data assets. By combining data sources and utilizing AI-powered analytics, you can significantly enhance the overall effectiveness of your promotional efforts. 

Why is this a best practice? Data-driven insights allow for better targeting, more precise budgeting, and ongoing improvement. Advanced tools can integrate and harmonize data from various sources, making it ‘analysis ready.’ This means you can model different scenarios and predict outcomes more accurately. 

For example, a CPG manufacturer might use AI-driven software to analyze historical sales data, trade investment, and promotional mechanisms. This analysis can help forecast the potential impact of a promotion, allowing the team to plan more effectively. By modeling different scenarios, a CPG firm can identify the most effective promotional strategies and allocate resources accordingly. 

In summary, using technology and data insights drives smarter decisions and more profitable promotions. It allows you to stay agile and responsive to market changes and opportunities, ensuring that your promotional strategies are always optimized for success. 

What sets Visualfabriq software apart is its ability to combine multiple steps into a single, efficient action. By leveraging extensive data and analytics during promotion pre-evaluation, it allows CPG teams to optimize as they plan. This approach provides a rapid understanding of the drivers of success before a promotion even begins, establishing a ‘first time right’ standard. 

6. Collaborate closely with retail partners 

Aligning trade promotions with retail partners is crucial for better execution and higher impact. Retailers play a key role in delivering the promotion to the consumer, so collaborating towards win-win outcomes maximizes success. 

Why is this a best practice? Retailers are essential in ensuring that promotions reach the target audience effectively. By collaborating closely, you can coordinate efforts, share insights, and create a seamless experience for the consumer. 

For example, imagine a CPG manufacturer working with a retailer to coordinate in-store displays and digital advertising during a major product launch. This collaboration ensures that the promotion is visible and engaging, driving higher consumer engagement and sales. 

Close collaboration with retail partners enhances the reach and effectiveness of your promotions. It allows you to leverage their expertise and resources, ensuring that your promotional strategies are executed flawlessly. 

7. Monitor and learn from competitor promotions 

Staying informed about competitor activities is essential for benchmarking and improving your own strategies. By keeping an eye on what your competitors are doing, you can identify gaps, react to new market trends, and refine your promotion timing and messaging. 

Why is this a best practice? Competitor insights help you stay agile and responsive in a dynamic market. By understanding what works for your competitors, you can adapt and enhance your own promotional strategies to stay ahead. 

For example, imagine a CPG brand adjusting its discounting strategy after observing a competitor’s successful holiday promotion. By analyzing the competitor’s approach, the brand can identify effective tactics and incorporate them into their own plans. 

In short, competitive intelligence sharpens your promotional edge and keeps you agile in the market. It allows you to learn from others’ successes and mistakes, ensuring that your promotional strategies are always evolving and improving. 

Trade promotion strategies & best practices: in conclusion 

To recap, running successful trade promotions in the CPG industry requires a strategic approach and adherence to best practices. By treating promotions as part of the total annual investment, setting clear and specific goals, conducting thorough pre-promotion planning and forecasting, and always pre- and post-evaluating promotions, you can optimize your efforts and drive better results. Leveraging data and technology, collaborating closely with retail partners, and monitoring and learning from competitor promotions further enhance your promotional strategies. 

By following these best practices, you can ensure that your trade promotions are not only effective but also contribute to the long-term financial goals of your company. Ready to take your trade promotions to the next level? Download our TPM brochure and book a demo today to see how our solutions can help you achieve your goals.