The 3 Year Trade Investment Roadmap

Author: Don Baker

Now that we have covered Strategic Plan elements, I want to discuss the Trade Spend Strategic Plan or probably more accurately the 3 Yr. Trade Investment Roadmap. As I said, The COGS line on the P&L is the biggest and we always see plans behind that number – plant layouts, line configurations, formula changes, product sourcing, waste elimination, and detailed distribution planning.

Don Baker Blog Post image-05However, we rarely see that same level of discipline and detail in a Trade Spend Roadmap. When asked, clients share PowerPoint’s detailing business direction to the Sales Organization occasionally some customer segmentation, and 4 P direction – What Price or Promotions should be implemented, Favored Tactics or times of year/month, etc. What we don’t see are documents outlining the strategic choices and direction for a companies second greatest line on the P&L. The 3 Yr Trade Investment Roadmap should be a 3+ year plan that focuses an Organization on the critical few choices that will help them win in the marketplace. It may detail elements such as:

  • The specifics for implementing brand plans in the marketplace
  • The manner in which channel and customer segmentation will be deployed
  • Capabilities that will be developed to enable the Strategy
  • Organization Design elements that will be added, altered or eliminated
  • Required department and functional processes to drive review, discipline and compliance.
  • Analytical & Planning tools and systems to drive execution
  • Required systems improvements and integration.

The list could go on. But Effective Trade Investment Roadmaps address key strategic issues

  • How to win with customers
  • How to improve revenue & profitability
  • How to embed trade spend across the infrastructure – people and systems
  • Defined methodologies to link spending to brand strategies

And Effective plans drive organizational alignment. Primary considerations are typically;

  • What is required of the Team?
  • What is required of every individual within the Team?
  • What is required of your Brokers, if you use them?

So what does the 3 Yr. Trade Investment Roadmap look like? We like to construct it using a very simple outline. OGSI – Objectives Goals Strategies and Initiatives.

The model works like this:


Objectives are one or two overarching statements of what you want to achieve. This is usually a set of words developed in a way that it will live on for the life of the plan. So it should be broad. Examples include:

  • Drive sustainable company and customer growth by increasing the productivity, effectiveness and discipline of the trade investment
  • Trade investment is aligned to brand strategies and customer segmentation; leverages insights, and supports efficient spend management to deliver accelerated net sales growth

Goals are next. Goals are the specific metrics to measure the 3-year plan’s effectiveness. Examples would include things like; Net Sales Growth, Trade % reduction, accrual or deduction balance reduction, post audit or penalty claim reductions, forecast accuracy improvement, ROI improvement, etc. Like Strategies, Goals should be broader and more indicative of longer term targeting.

Strategies follow goals. These are the specific ways in which the objectives and goals will be achieved. Strategies should stand the test of time and typically will not change over the life of the plan. The key to writing these is to project how this concept is different than anything you do (OR DON’T DO) when developing your approach to Trade Investment today. Examples include:

  • Build an Integrated Commercial Planning Process
  • Drive Policy and Compliance creation and standardization
  • Develop a Pre and Post promotion measurement capabilities and discipline
  • Create and deploy a master data governance approach
  • Enhance System capabilities
  • Train and develop our organization to advance trade investment improvements

Unlike Strategy, Initiatives typically do not run over the life of the plan. They are often the critical and specific 1 or 2 year projects, activities and actions that deliver the Strategies.

The benefit of this approach is that the organization now has the Road Map for how it will improve itself. It can be budgeted, measured, and should remove any ambiguity of success and how trade will enable the customer plan. It is just the right way to run any function.

So how do we insure that the strategy gets executed? It’s starts with proper customer planning. That’s topic is up next.