For many organizations, trade funds remain an addiction, but a few CPG organizations have managed to avoid the multi-billion-dollar costs. What's more, the Sarbanes-Oxley Act (SOA) now requires CEOs, CFOs, and auditors to sign off on the accuracy and internal controls, enforcement, and verification of costs-including those of trade funds spending.
Fortunately, we have the tools you need to improve trade fund management. Now, you can:
- Reduce losses with effective measuring and planning
- Institute real-time controls on spending for accounting accuracy
- Lower costs with automated administration
- Effectively promote trade funds and realize a return on investment (ROI)
Improve Planning and Effectiveness
The key to trade fund effectiveness is to plan and measure your trade fund spending by brand, channel, line, key account, broker, and individual promotion. A majority of organizations have failed to measure results from each of these promotion types. Not surprisingly, when CPG organizations start measuring promotion effectiveness, most are stunned to find how unprofitable most promotions are. In fact, two of the largest CPG firms found that over 40% of their promotions had actually reduced net profits.
These two firms along with many others have now instituted best practices in trade promotions through the use of BI. This entails measuring the results of your trade fund spending in full detail, using measures to improve promotion forecasting, using accurate forecasts to plan and control offers for the next period, and comparing your results with plans.
Over time, you can continuously improve results by reapportioning trade funds for maximum sales and net profit effectiveness. By linking trade funds management with superior account-based sales and inventory forecasts, you can also improve your in-stock customer service rates while minimizing inventories and maximizing operating profits.
In a nutshell, BI helps you save money.
Gain Control Over Spending
Meeting the trade fund demands of retailers while keeping spending within budget is a real challenge for sales. That's why a trade funds BI system is key for your sales managers and brokers. With remote, real-time access to this system, they can more easily monitor and control spending.
The value of creating a trade funds BI system increases even more as more retailers demand and get online access to CPG systems for ordering, status checking, and collaboration. Sales representatives can also use it to measure retailer execution of promotions at the store level and give feedback to account and brand managers.
Reduce Administrative Costs
One of the largest and most wasteful administrative costs at GPG organizations involve invoice discrepancy management. With real-time, web-accessible BI, you can cost-effectively control invoice deductions.
You can also streamline the process of managing deductions for reducing administrative costs while delivering superior customer service. This best practice starts with using web-accessed BI to control offers, help manage orders, and move ever closer toward achieving the perfect order. It continues with automated invoice, payment, and discrepancy adjudication processes.
By reducing administrative costs, you can also reduce sales/customer service costs. And by giving smaller retail accounts secure web access to channel or channel-segment deals, you can increase their market share in channels that have smaller accounts without incurring additional selling costs.
Take Action
- Talk to a sales rep
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