Besides calculating your baseline sales properly, harmonizing your data is the second "pillar" that supports the foundation for the remainder of your trade promotion best practices.
Data harmonization isn't a fashionable topic, despite its importance in analyzing trade promotion. Everyone talks about “big data” from a software perspective. But big data doesn’t get to be very big without a mechanism for harmonizing it correctly.
Harmonizing Your Data Is Essential
Executing data harmonization properly isn't easy. In fact, it’s probably the single largest barrier placed in front of anyone who wants to plan and optimization his promotional plans. And the larger the vendor, the more languages, units of measurement, currency, and individual reporting differences from retailers come into play.
Can we harmonize?
- The spending
- The ad performance
- Images of the ads in question
- The actual scan data
Take a look at these items as an example.
First, we have transactional data through our internal spending system:
Then there’s the actual image:
And finally we have scanning performance:
Here’s the issue: We found that the ending data for all three was different. We’ve got some work to do here, not just from the perspective of harmonizing the dates, but also things like brand size, spending components, etc.
You may be asking, “Okay. Doesn’t this mean that you should have some dedicated TPI software in place before doing any promotional evaluation?”
The short-term answer is "no". You don’t necessarily need to have those systems in place to start your evaluations. The process can certainly be a bit more cumbersome, but you can roll up your sleeves and gain those insights immediately.
However, if you’re planning for longer-term, and dedicated to the process of being as efficient as possible in the management and optimization of your trade promotions, then we would say "yes." It then makes sense to invest in a software solution, one that can holistically integrate all of those elements of the process.
Redefining the Process
We mentioned in the first post of this series the conventional wisdom of first focusing on implementation (what others call trade promotion management, or TPM), and then later on optimization (or TPO).
The new workflow we propose first involves measurement (the “new” TPM), simply rolling up your sleeves and getting a decent handle of promotional impact on sales. You’ve just learned how good measurement involves computing an accurate baseline and appropriately harmonizing your disparate data streams.
In our next post, we’ll discuss the next phase of the new process, where we define a fundamental set of theoretical best practices (TPB).
Then, the next two posts in this series will complete the circle, first taking those best practices and doing some trade promotion planning (TPP), where we incorporate TPB into our workflow.
Finally, we’ll address trade promotion optimization (TPO) as the final step in the process, automating and improving the processes we’ve outlined.