Imagine this…
Every month you get your credit card bill (not very hard to imagine!), you hop online, and pay your bill. The only difference is that your credit card company only provides you with a total amount due. There isn’t a line item statement included detailing the charges to your card. Would you just pay your bill and trust that they’re not charging you an inflated interest rate or billing you for charges you didn’t authorize? Probably not. You could potentially be throwing away money!
This is the kind of limited visibility I’m talking about when it comes to foodservice manufacturers blindly paying claims without a verification or audit process in place. Trade spend is a big chunk of a foodservice manufacturer’s marketing budget, this is no secret. It’s also no secret that most foodservice manufacturers don’t have a solid system in place for tracking
trade promotion performance. Hand in hand with the lack of performance tracking is the absence of verification and audit processes when settling claims. This environment definitely leads to limited visibility, making for cloudy judgment and a marginal ROI.
With that said, what kind of return on trade spend should be expected? When an organization has an accurate and proven
trade promotion management solution in place, it can see a 15%+ improvement in ROI just by identifying errors through verification alone. That’s amazing! Couple that with access to claims and contracts, foodservice manufacturers can measure actual performance vs. expected performance. This is key in identifying inaccurate claims and unprofitable trade agreements. Continuing the behavior of paying out on erroneous claims or ineffective trade promotions is the equivalent to paying your hypothetical credit card bill. Foodservice manufacturers are missing a significant amount of profit and ROI with trade spend without a solution in place.
So as you can see, foodservice manufacturers don’t have to continue to pay inaccurate claims or accept deductions simply because they’ve received them from a client. Integrating a solid, detailed
trade promotion management solution will afford foodservice manufacturers access to information that will make for improved trade spend ROI, clear skies and endless trade spend performance visibility.