Our Minds Can Take Trade Spending Off Yours

By Stew Bishop, President and CEO

One of the highlights of my year is coming to Natural Products Expo West and seeing all the innovation in consumer packaged goods. It’s been particularly rewarding to see the explosive growth of clients like Clif Bar, Plum Organics and Daiya Foods.

It’s not easy to be profitable in this industry. Consolidated manufacturers with big portfolios can reach into deep pockets for high slotting fees and aggressive discounts to gain distribution and displays at powerful retailers. But consumer demand for clean, organic, sustainable products and authentic, innovative brands continues to grow. Regardless of size, manufacturers who can satisfy these needs and manage their businesses effectively will win.

One of the most daunting tasks, particularly for startups, is managing the trade fund budget. It is the largest expense for a CPG after cost of goods and human resources, and the one over which you have no control, only influence. Where else do you spend money when you are not the customer?

I am often asked, “when do I need professional trade fund management?” Our general guideline is when you are spending $5MM or more annually in trade.

What is professional trade fund management? It’s using expert data scientists to mine your POS and trade spend data and seasoned business leaders to plan, negotiate and execute the most profitable retail distribution, pricing and promotion strategies.

For more than 20 years, Customer Marketing Group (CMG) has empowered leading and emerging brands to maximize the efficiency of their trade spend, generating a minimum 200% ROI in the first year.

How do we do it? A dedicated team with extraordinary academic qualifications, analytical firepower, and real world industry experience fully focuses its expertise on the complex job of optimizing your trade budget.

EVERY DAY OUR TEAM MEMBERS ANSWER CLIENT QUESTIONS LIKE THESE:

• Should we take a price increase?
  What will be the impact?
• Which events drive the most topline sales?
  Which have the highest ROI?
• How would you expect this event or plan to perform at my customer?
• Is HiLo or EDLP better at my account?
• Are shallow-frequent promotions better than deep-infrequent promotions?
• What if I take my promoted price up (or down)?
• Can you compare the financial scenarios of these two plans?
• Do I have enough budget to add another event?
  What should I add?
• I need to cut my trade, what’s the best way to do that?
• What time of the year should I promote?
• Have you ever seen this customer program?
  How does it perform? Is it worth paying for?
• Are my accounts executing as planned (base price, promotions, displays)?
  How much is this costing my customer and me?
• Which products should I bundle in this event?
• How incremental/cannibalistic was the new item distribution to my account?
• What is the breakeven slotting for this product?
  When will slotting pay out?

SOFTWARE ALONE DOES NOT PROVIDE THESE ANSWERS. PEOPLE DO.