Given that trade spend is often a more significant expense than traditional marketing, accounting for anywhere from 15% to 25% of a consumer goods company’s gross sales, management of trade spend funds is a critical endeavour.
Effective funds management can enhance trade promotion ROI and help achieve higher margins, while poor funds management can lead to budget overruns that diminish the overall effectiveness of promotional activities.
However, successful funds management can come at a cost, namely overburdening Key Account Managers (KAMs) and reducing their potency.
Striking a balance between controlling trade spend and enabling flexibility for KAMs can be challenging.
Trade promotions may be complex and multifaceted, requiring intricate planning, execution and monitoring. A lack of real-time visibility into funds can hinder prompt decision-making, leading to missed opportunities.
As a result, KAMs may spend excessive time in trade promotion management (TPM) solutions. While TPM solution insights are crucial for post-event analysis, too much time spent can slow down decision-making in fast-changing environments.
An agile approach within a broad structural framework is required. Establishing well-defined objectives and measurable KPIs can streamline both planning and evaluation.
While post-event analysis should be conducted to learn from successes and failures and adjust future promotions using the objectives and KPIs defined at the outset, analytics in which KAMs need to find the insights are to be avoided.
Rather, providing KAMs with real-time insights from advanced TPM solutions without bogging them down in analysis paralysis enhances promotion effectiveness visibility and enables better and rapid response to market changes.
KAMs need to focus on their relationship with the retailer, rather than respond to a flood of continual requests for additional funds or complex analytics.
Effective trade spend funds management can lead to higher immediate sales and stronger relationships with retailers, but it requires walking a tightrope between rigorous control and agility.
Companies must remain vigilant in monitoring promotional investments, ensuring alignment with business goals while fostering flexibility to adapt to changing circumstances.
Using data analytics and investing in real-time insights to optimise fund spend, to ensure ROI and alignment with business strategies – combined with clear objectives and empowering KAMs without overburdening them – are the keys to success.
For more information on TELUS Trade Promotion Management, visit telus.com. [Image Courtesy: kenchiro168 - stock.adobe.com]
This article was written in partnership with TELUS Consumer Goods.