Most would agree that you need a proactive approach to win. It’s a mindset that drives action & ultimately results.
In speaking with most emerging brands, however, the approach to trade spending is very reactive. How so?
First, most emerging brands, and CPG companies in general, spend well over 20% of revenue on trade spending. That’s a lot of money & it’s the bulk of your marketing funds.
However, most discussions about trade spending start with deductions – the end, or ‘clean up’ part of the process. Leadership & management seems surprised, frustrated & at times, almost violated by the scope of these deductions. Therefore, the focus becomes addressing these deductions & securing the relatively minor part of these that are to be repaid.
Most teams are not looking at core areas of the deduction – the legitimate, agreed to trade spending. The decisions to spend these dollars were made by your team & are totally controllable. These trade spending funds should focus on major objectives:
- To achieve your volume & revenue targets within a set budget.
- To improve your retailer partnerships for short & long term partnership & growth.
Trade spending has been here for decades; the reality is it will be here for a while longer. How do you plan to become more proactive in making this an asset for your organization?
For emerging brands, many key functions are outsourced – sales leadership & finance to name two. Why not look into fractional trade marketing?
If you’re an investor, a founder or in leadership at a CPG brand looking to be more proactive & make major improvements here, give us a call – it’s certainly worth 30 minutes of your time.