Develop a TPM Strategy
Learning Objectives
After completing this unit, you’ll be able to:
- Explain how Salesforce TPM helps businesses develop their promotion strategies.
- Identify the different types of funds used for TPM.
It All Starts with the Strategy
Like any successful journey, a solid promotion needs a budget, a strategy, and a plan. And it all begins with a review of the previous years’ results.
That data informs the growth and profit goals for the coming year. What products sold last year? What products does the manufacturer want to sell this year? The sales and finance team calculates the target sales volume and revenue from past annual data, sets high-level goals, and conducts top-down planning for the different regions where their customer does business.
Once the team establishes their high-level strategy, they’re ready to set more detailed targets and break down goals for the various KAMs in different markets. They do this by maintaining targets per account and categories in the customer business plan. Each KAM like Gustavo works off these goals as they do their own planning. That’s a lot of content to track! Salesforce TPM stores all of this data, so users have access to it during the entire trade cycle.
Note: Strategy planning occurs outside of Salesforce. However, teams often facilitate this process through Salesforce, storing all of the data in the Salesforce TPM system.
Plan Your Budget
Now that Gustavo knows the target he needs to hit, it’s time to get planning. Like any journey, someone has to pay for it, and Gustavo needs a budget. Finance teams determine the budgets and allocate the funds to pay for retailer promotions. And, you guessed it, everything is tracked in Salesforce TPM.
Know Your Funds
Each budget is different, and Gustavo uses them in different ways. There are two main ways to fund and use a budget for promotion management.
- Fixed funds are budgets with a set amount. In this case, Gustavo knows his total budget for the planning cycle—for example, $1 million USD—from the beginning.
- Rate-based funds set the budget based on the amount of product sold. For example, the budget grows by $1 USD for every product sold. The more products sold, the bigger the promotional budget, which acts as an incentive for retailers.
After selecting the fund, Gustavo uses the budget for promotional activities in Salesforce Trade Promotion Management. For example, he might pay for the extra space a promoted product will receive in a store, or set the price reduction NTO stores will receive during the promotion timeframe.
Choose a Fund Category
The differences don’t end there. Funds are also budgeted into different categories. Funds are configurable in Salesforce TPM and differ depending on the customer. Funds enable the management of Gustavo’s budget for his customer or a customer-product group combination. Here are some examples of the different types of funds.
- Customer funds are higher-level funds normally allocated by geographic area, such as Atlanta or San Francisco. These are also known as account development or market development funds and are used by KAMS to fund promotions of their individual accounts. They always have one customer anchor and no product anchor.
- Customer category funds support a particular product category in a geographic area, such as energy drinks in San Francisco.
- Customer brand funds target a specific brand within the region’s product category, like promoting a specific juice energy drink in San Francisco. These funds are flexible and not product-specific. Teams adjust and tailor brand funds for other products and categories as needed.
Track the Funds
KAMs like Gustavo manage these funds in Salesforce TPM, getting the financial support to create and execute promotions. Salesforce supplies detailed templates for the various promotions and combinations, making everything easier to track.
With Salesforce, Gustavo and Alpine administrators are able to import spreadsheets and create multiple fund categories—on one platform. They track the details of the fund transactions, and then pay for the promotions. Even better, they have access to all these funds in one place: the checkbook, which is the KAM’s entry point that provides access to all spend information. The checkbook also provides visual overviews of all funds and payment information.
Move Funds in Salesforce TPM
Over the course of the year, Gustavo can use TPM to move the funds around or input new funds into the system. Different types of transactions categorize those changes.
- Initial transactions create new money in the system in the form of a credit.
- Adjustment transactions remove money from the system in the form of a debit.
- Transfer transactions can transfer money to one or more existing funds. In a transfer transaction, both target and source funds must exist. Multiple target funds can be selected within one transfer transaction, if multi-fund transactions are used.
- Drawback transactions can transfer money from one or more existing funds to one target fund. A drawback transaction can be used to roll-back money from a transfer transaction, but also in any other scenarios, where a user needs to move money from multiple source funds to one target fund. The target fund can be above the source funds in the hierarchy–for example, two account funds can transfer money to a headquarter fund.
Balance and Budget
One of Gustavo’s most important responsibilities is tracking both the balance and the budget. They’re not the same, and Gustavo needs to understand the difference.
The balance is the total amount a team has to spend, even if funds are already allocated. Think of this as the current balance in a bank account with known outstanding bills. Some of the account balance is already spoken for.
The budget is the remaining money. It’s what a team has left to spend after considering all of their outstanding bills and committed expenses.
Now that we know the difference, join Gustavo in the next unit as he figures out the best ways to spend the budget for his account and get the most in return.
