Smarter Trade Planning: Connecting Trade Spend and Sales Forecasts

We’ve now explored the differences between trade promotion forecasting and sales forecasting and how each process works.

But here’s the key — the real value for CPG brands comes from integrating both these processes, to gain a holistic understanding of how their products are performing.

It's only by integrating promotion planning with overall sales forecasts that finance and sales teams gain clarity to optimize budgets, inventory, and growth decisions.

Here’s why your brand needs to connect your trade spend and sales forecasts.

Allocating Trade Spend More Intelligently

CPG marketing and sales departments face pressure to fuel growth through savvy trade promotion campaigns that incentivize retailer support like premium shelf placement and flyer features. However, excessive discounting erodes margins while underinvesting loses market share. 

By predicting the incremental sales lift each planned promotion is statistically likely to drive based on past performance, brands can devise optimum trade budgets and sharpen ROI. Ongoing comparison of projected vs. actual lift post-campaign further refines models.

Ensuring Supply Availability

A recurring frustration for brands is losing sales from stockouts when promotions wildly overperform forecasts. By linking sales team promotion schedules and projections to the supply chain's production plans in an integrated system, manufacturers align inventory to demand. 

Automation also enables rapid re-planning when launch dates shift or forecast adjustments alter expected peaks. The result is upside sales realization and lower write-off costs from scrapped expired products.

Informing Growth and Innovation Plans

New product initiatives require significant investments, making anticipated profitability paramount. Historical performance often proves a poor guide, but by modeling likely trial rates, repeat purchase curves and retail expansion, sales forecasts provide essential visibility into viability to inform launch decisions.

Ongoing monitoring of new item performance against forecasts then indicates when more marketing nurturing is needed or if a pivot is required. This post-launch feedback loop continues optimizing both forecasts and innovation initiatives over time.

Allocating Resources and Investments

Rather than departments working in silos, sales and marketing teams collaboratively building integrated forecasts encourages efficiently aligning plans across domains based on data-driven growth scenarios. 

For example, production can scale capacity, inventory, and staffing to meet promotion-driven sales surges quantified in models. Marketing can better sequence brand campaigns with new product launches based on likely attribution effects.

Sales can set account investment levels based on share of growth rather than historical precedent.

This cross-functional synchronization means all your teams will have a line of sight into, and feel equally accountable for, ROI.

Competitive Advantages

Transitioning to interconnected planning can help your brand:

  • Get products on the shelf before competitors in winning categories
  • Lock in shelf space as losing categories decline  
  • Reassign sales and marketing talent to high-potential targets
  • Dynamically reallocate trade budgets to optimal channels

This agility leaves competitors anchored to legacy norms in the dust - the more flexible you can be in predicting and responding to trends, the better your brand will do.


The Challenges of Integrated Forecasting for CPG Brands

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