Unlocking Success: A Deep Dive Into Trade Promotion Management (TPM)

As consumers become increasingly price-sensitive and more brands opt to go direct-to-consumer, the competitive pursuit for market share and profitable growth remains fierce in the consumer goods industry. The foundation of that growth lies in efficient and effective retail execution that drives product demand and sales.

With 55% of consumers buying only brands that are on promotion,¹ trade promotions that are done right can unlock opportunities to drive product demand and grab more market share. Even though trade promotions can be lucrative, many of these initiatives aren’t successful. Why? Data² and systems are siloed, and sometimes data isn’t tracked well. This can make budget tracking difficult, forecasting inaccurate, and analytics nearly impossible. Plus, working with multiple retail partners, marketing agencies, and your own teams can be difficult to coordinate.

Enter trade promotion management (TPM). This is the process of planning, executing, and analyzing promotions to help with efficiency, collaboration, and accuracy. With TPM, CG companies can not only optimize promotional strategies to propel sales but also improve relationships with retail partners.

Salesforce TPM and How It Works

Salesforce's Trade Promotion Management (TPM) is a comprehensive solution within Consumer Goods Cloud that can help companies effectively manage their trade promotions to increase demand for their products in stores. The solution helps businesses improve efficiency, collaboration with retailers, and data accuracy³—all of which will lead to more sales and revenue. It also integrates with existing systems and processes, providing a robust framework for managing trade promotions from start to finish.

CG companies can plan and run promotions from one platform that provides a single view of all active promotions. This will make it easier to manage multiple promotions concurrently while streamlining efforts. For example, a toy manufacturer might develop promotions for several brands during the holiday season. TPM would ensure all these activities are well-coordinated, and it would help the company get a higher return on investment (ROI). This is crucial as 73% of customers are more likely to do business with a brand that offers promotional products,4 underscoring the need for effective execution and analysis.

Steps in the Promotion Lifecycle

TPM can help companies manage every phase of a promotion. Let’s take a look.

• Strategic Planning: In the first phase, determine your trade budget, targets, timelines, and brand strategies and priorities. For instance, a cosmetics brand might create a promotion for a new product with special discounts and in-store displays.
• Funds Management: Enable Key Account Managers (KAMs) to allocate budgets, set up funds for promotions, and link them to specific tactics.
• Account Planning: Set your trade terms and plan for what-if scenarios.
• Promotion Planning: Create promotions in TPM, plan for what-ifs, and negotiate with retail partners.
• Promotion Execution: Execution is where the planned strategies come to life. Monitor and track promotion performance, fund the actual promotion, and handle the settlements.
• Post-Event Analysis: Gather post-promotion summaries to analyze the ROI. For example, a children’s apparel company might track and evaluate the performance of its back-to-school promotions, using insights to improve strategies or replicate successes. This final step is a valuable but often skipped step, with 60% of trade promotions left unevaluated because companies don’t have the time or the tools to do so.⁵

Key Features of TPM

Integration and collaboration are behind some of the key features of Salesforce TPM, which makes managing trade promotions a more efficient and effective process.

Integration with ERP systems: Product data, including hierarchies and attributes, can be integrated from ERP systems into Salesforce, allowing seamless management of promotions across different products and accounts. Collaboration with retailers is crucial as retailers are responsible for more than 90% of revenue for many CG companies.⁶

Data synchronization:⁷ With tools like MuleSoft⁸ Direct, TPM enables seamless data integration and synchronization between Salesforce and third-party systems, ensuring all relevant data is up to date.

Performance measurement: TPM can measure the effectiveness of promotions using key performance indicators (KPIs). This helps businesses understand the impact of their promotions and refine strategies for better results. Companies must establish clear KPIs to measure the success of their promotions, such as sales lift, ROI, and customer engagement levels.

Collaboration and user management: The TPM solution supports user management by assigning roles and permissions so the right people can access the necessary tools and data.

Consumer insights: By integrating with Data Cloud,⁹ TPM empowers sales reps with consumer insights and store-level product performance data, enhancing decision-making and strategy formulation.

Salesforce Trade Promotion Management is a powerful tool that benefits both consumer goods manufacturers and retailers. For example, a supermarket chain can optimize shelf space for fast-selling products and boost sales, while a toy manufacturer can increase sales and strengthen brand recognition. With promotional products generating 500% more customer referrals¹⁰ than other forms of advertising, the impact of well-managed promotions is significant.

By effectively using TPM, companies across various industries can transform their promotional strategies and achieve significant business growth. A clothing retailer might use the centralized platform to unify all aspects of trade promotions, eliminating data silos and enhancing visibility. A personal care brand can offer personalized promotions and optimize timing to align with broader marketing strategies. A food manufacturer can use data and insights to identify ineffective promotions and optimize budgets.

On average, 20% of revenue is spent on trade spend.¹¹ TPM can help make sure every dollar spent counts.

Sources:

1. Ernst & Young, https://www.ey.com/en_gl/insights/consumer-products/cpg-retail-and-consumers-see-a-changing-dynamic
2. OSF Digital, https://osf.digital/library/blog/data-at-the-core-of-strategy-mastering-the-expansion-of-information
3. OSF Digital, https://osf.digital/library/blog/mastering-data-proliferation-strategies-and-use-cases-to-prepare-for-the-ai-era
4. SellersCommerce, https://www.sellerscommerce.com/blog/promotional-products-statistics/
5. Promotion Optimization Institute, https://poinstitute.com/wp-content/uploads/2017/07/QuriPaperonPromotionalPerformance-2.pdf
6. Salesforce, https://www.salesforce.com/consumer-goods/trade-promotion-management-software/guide/
7. OSF Digital, https://osf.digital/library/blog/mastering-data-proliferation-strategies-and-use-cases-to-prepare-for-the-ai-era
8. OSF Digital, https://osf.digital/library/blog/integrating-agentforce-2-0-with-mulesoft-advancing-intelligent-automation
9. OSF Digital, https://osf.digital/library/blog/why-salesforce-data-cloud-is-right-for-you
10. GoPromotional, https://www.gopromotional.co.uk/blog/how-promotional-products-help-business/
11. Promotion Optimization Institute, https://poinstitute.com/state-of-the-industry/