Trade Promotion Excellence: Putting Together the Total Package

Read the full "Journey to Trade Promotion Excellence" Roadmap

Q: In what key ways has the practice of trade promotion management changed in the last five years? 

It shocks me how much it hasn’t. If I were to scorecard the transformation that’s taken place in marketing and compare it to how sales teams have adapted in a world of digitally connected commerce, it’s not flattering to most sales organizations. 

For marketers, it’s now a given that multivariate testing and artificial intelligence and automation are standard tools, yet most trade management programs are stuck in the old world of econometric regression of the last two year’s data to pick winners. I’d love to hear more sales leaders talk about a roadmap towards programmatic selling within five years. 

There are between five and 10 consumer goods companies who are far out ahead of their peers. They’re redefining what it means to think about trade promotion management — combining decision authority with national consumer promotion/couponing/shopper marketing dollars to have an integrated view of their shopper-facing investments. They’re using far more modern tools in terms of offer testing, automated planning and artificial intelligence. The lines between marketing and sales might be blurring, but they have a clear picture of the total package. 

Q: How would you scorecard the industry right now? How many companies have addressed these changes to improve their revenue management practices? How many are still bogged in the same old spreadsheets? 

I think most companies are still setting their sights too low in regard to trade promotion effectiveness. I’ve seen too many organizations use the crutch of “crawl, walk, run” to prioritize enhancing administrative solutions to handle the operational processing of trade — versus putting more emphasis on running better promotions from day one of a transformation. 

The leading companies are doing it the opposite way: moving to a “precision guidelines” approach to empower the field to be increasingly granular and sophisticated in terms of putting the right types of offers out in the marketplace that will more effectively boost sales. It’s a lot easier to get field acceptance of administrative controls when they’re coupled with hard proof that having those systems in place also provides the tools they need to help hit their numbers. 

Q: Is there any urgency among retailers to improve the trade promotion management process, or are they worried about upsetting the financial applecart?


In a post Amazon-Whole Foods world, I’d say that retailers are generally feeling far more urgency than brands to change how they price, promote, and personalize. 

That said, they’re also trying to get a lot done. These initiatives compete with a short-term focus on handover options — for example, making sure there’s a credible way to click and collect, or get home delivery, or subscription ordering. 

Promotion initiatives have been a lot more fragmented. Should you run dynamic promotions to compete with Amazon, or build a proprietary “digital offers wallet,” or work to minimize promotions that subsidize the base and instead shift funding into offers that drive loyalty? I think the industry is still trying to determine which bets to make here.