The value of trade promotion forecasting: Empowering sales teams in the CPG industry

CPG manufacturers have always used a wide range of techniques to catch consumers’ attention and encourage them to buy their products. But managing multiple product lines and coordinating multiple trade promotions while aligning with partners’ objectives can be challenging. Just how do you decide whether a particular approach or promotion is the right one? How do you accurately predict trade promotion success? A key differentiator between those teams that take a “this might just work” approach, and those that achieve consistent results from their trade promotions is the application of trade promotion forecasting. This involves predicting and pre-evaluating the outcomes and impact of promotional activities implemented by CPG companies.  

This approach can deliver valuable insights to help sales teams plan and optimize their promotional campaigns. Moreover, with the right tools, trade promotion forecasting empowers CPG professionals to develop innovative promotion plans. It also enables them to generate reliable forecasts, and gain ongoing insights into consumer behavior. And with the addition of AI to the mix, the gap between the winners and the also-rans is set to widen.  

Getting it right means understanding the challenges involved, the outcomes and benefits you’re targeting, and the tools and techniques you can deploy. 

Challenges in trade promotion forecasting

One of the biggest headaches in trade promotion forecasting is simply the sheer volume of promotions that need to be managed. With numerous products and variants, it can be a complex task to keep track of all the individual moving parts and ensure they are all aligned for optimal results. 

Collaborating with retail partners adds an extra layer of complexity. However, establishing strong relationships, aligning objectives, and fostering effective communication are essential. Adding to the challenge is that retailers’ objectives may differ from yours, as they strive to drive traffic and maximize sales within their stores. Therefore, balancing their goals with your trade promotional strategies requires careful negotiation and alignment to achieve mutually beneficial outcomes. 

“Brands are not important in 48% of purchase decisions, putting CPG companies at a disadvantage”—EY

Achieving promotional success needs precise planning and meticulous attention to detail. It’s not only essential to define clear objectives for each promotion; you’ll also need to ensure that they align with your overall marketing and sales strategy. Without a robust planning process and the right tools, it can be impossible to create coherent and impactful promotional campaigns. 

The ability to accurately predict trade promotion outcomes is crucial. However, it’s often easier said than done. Indeed, forecasting involves analyzing historical data, market trends, and other relevant factors to project the potential impact of promotions.  Consequently, generating reliable forecasts is essential as it enables you to make informed decisions and optimize your promotional efforts. 

It’s important to realize that trade promotions exist within a dynamic environment, influenced by various external factors. For instance, supply chain disruptions, shifts in consumer behavior, and other unforeseen events can all impact the success of your promotions. To stay ahead, you need to be agile, generating real-time insights, and adjusting your strategies accordingly to maximize results. 

Benefits of trade promotion forecasting 

That’s a formidable set of challenges. Which is why a combination of the right approach to trade promotion forecasting, and the right tools, will deliver value in multiple ways. 

Not least is the ability to carry out real strategic planning. Trade promotion forecasting enables sales teams to set clear objectives for each promotion and develop comprehensive plans that align with their overall business goals. It’s only by understanding the desired outcomes that teams can create promotions that have a greater impact. 

This goes hand in hand with the ability to predict trade promotion outcomes with confidence. Indeed, by leveraging historical data, market trends, and AI-powered algorithms, trade promotion forecasting can provide more accurate predictions of promotional impact. This empowers sales teams to make informed decisions, allocate resources effectively, and drive better results. 

And with the right tools, you can achieve not just better forecasts but real-time insights. This is because trade promotion forecasting allows for real-time monitoring of promotions, providing invaluable insights into their progress. Consequently, you and your team can make adjustments on the fly, ensuring that promotions stay on track and aligned with your objectives. 

This all helps foster collaboration between CPG companies and retail partners. That’s important, because by sharing insights and aligning objectives, you can work together on creating mutually beneficial promotions. This approach not only strengthens relationships but also fosters long-term success. 

Ultimately, this will all lead to enhanced decision-making. With reliable forecasting and thorough pre and post evaluations, your sales teams can make data-driven decisions. As a result, this leads to more efficient resource allocation and improved promotional outcomes. By leveraging the power of trade promotion forecasting, sales teams can prioritize their efforts and achieve better results. 

What’s next? 

To make informed decisions about trade promotions, sales teams need to understand the challenges they face. But also the potential benefits they can gain. It involves managing multiple products and coordinating various promotions. By embracing trade promotion forecasting, commercial teams can gain an advantage. Because it allows them to more reliably predict the outcomes of their trade promotions, evaluate their impact in advance, and adjust their strategies accordingly.

With reliable forecasts and insights into consumer behavior, CPG professionals can create innovative promotion plans that connect with their target customers. The integration of AI technology further enhances their forecasting abilities, allowing for more accurate predictions and real-time adjustments. By leveraging the power of forecasting and staying ahead of the curve, sales teams can seize new opportunities. It also allows them to strengthen customer relationships, and ultimately achieve sustainable success in the dynamic CPG industry.

It’s safe to say that trade promotion forecasting is a game-changer for commercial teams in the CPG industry. Commercial teams should consider embracing this approach and leveraging AI-powered solutions, such as Visualfabriq’s Trade Promotion Master. It can help them optimize their promotional strategies, improve forecasting accuracy, and drive success in a highly competitive market. 

To learn more about Visualfabriq’s Trade Promotion Master and experience the power of trade promotion optimization, download our TPM brochure and book a demo today. Empower your sales team and embark on a journey of growth and success in the dynamic CPG industry.