POI Pulse December 4, 2017

Overcoming the biggest
hurdles in moving from TPM to TPO: It’s not all about the technology!

On Data, TPM, and Time

Data: The 2017 POI survey also cast some light on issues
with the internal workings and viability of a TPO system, specifically data quality. In this case, when data is distorted for any reason it reduces the accuracy of the prediction. This may be part of what drives trust issues in what is seen by users in a TPO system, but most certainly it will gain no credibility from manufactures or retailers if
it has accuracy issues. Without going into how predictive models work, think of it as mixing up weather data from Iceland with that of Israel.

What our survey data shows is that 85% of respondents said that they have issues with the quality of external data. This is usually tied to point of sale (POS) data, which has many
inherent issues with accuracy, time period alignment and so forth.
There are several companies that offer services for acquiring, cleansing, harmonizing data, and staging this type of analysis. There
are also capabilities for doing it yourself with more of a toolkit
approach. Nevetheless, we don’t recommend proceeding with a TPO initiative until 2-3 years of clean “sell out” data are available.

Getting TPM Right First: While this might seem valid as part of a stepwise approach, we have seen many TPO capabilities being groomed by
a few power users on a few key accounts while the TPM system is still ramping up. On the one hand, it can keep you from asking too much
change management from your organization. On the other, you can argue
that the cost of waiting and seeing all that inefficient trade spending happen is just too much. Only you can make that determination. However,
we tend to lean towards having a wave of users begin to work with TPO while the latter waves of TPM users are still getting up to speed. We
have seen this work well provided it is managed appropriately. We also
see that having a partner that offers services that wrap around the software (data management, cleansing, analysis services, training, help desk) can make it easier than it might appear on the surface. 

Time: We fully recognize that everyone who took our survey
has a full-time job. We haven’t seen companies carelessly adding headcount in our careers spanning 30+ years. It is just a reality. The paradox is that it takes time to ferret out all the reports that nobody
really reads and the processes that nobody is sure why they still do.
It is always an aim to reduce non-value added processes, but hard to get traction. We offer no bromide here. But what we can say is that
being able to free up even a modest amount of time to improve promotional outcomes should have a high value placed on it. Perhaps only and executive mandate will make it happen so we recommend that you start there. And besides, any TPO project without executive sponsorship
will likely never get off the ground anyway. Find the time. Find the support. The benefits are well beyond worth it. Learn more, and access the full report here

The Promotion Optimization
Institute (POI), the leading resource for trade marketing and
merchandising executives, today released its 2017 POI TPx Vendor
Panorama, an annual analysis of the trade promotion management/
optimization market (TPx) that was developed to help guide consumer goods companies to successfully execute trade promotions at the headquarters level. Access the full report here