In Consumer Goods, a lot of money is spent on promotions. To actively manage margin when trade spending increases you need to: 1) know what promotions work (and don’t work), and 2) take action.

Promotion Return on Investment (ROI) is a financial metric that enables you to compare promotions across customers and products so you can understand what spending is working the hardest for you. You’ll find many ways to calculate ROI. We think the one shown below fits best for quick, actionable insights.

Use the formula described below to calculate ROI for your promotions. Compare ROIs across customers and products to understand what works and what doesn’t.

Revenue Management capabilities like UpClear’s BluePlanner TPM automate the calculation and reporting of promotion ROI using the information from promotion plans and actual results. This approach adds efficiency, but also ensures consistency of the calculation of this metric across customers by eliminating the ability to make personal modifications. This facilitates an apples-to-apples comparison across customers/products.

About UpClear

UpClear makes software used by Consumer Goods brands to improve the management of sales & trade spending. Its BluePlanner platform is an integrated solution supporting Trade Promotion Management, Trade Promotion Optimization, Integrated Business Planning, and Revenue Growth Management.