Essentially, by non-working trade, we refer to dollars that do not get to the consumer, do not drive targeted distribution, and do not drive repeat purchase.
Examples of Non-Working Trade
- OI’s & the Resultant Forward Buying
- Non-Targeted Slotting/Free Goods
- Administrative Fees
- Short Coded Buy Downs
- Unauthorized Deductions That Need to be Repaid
Working Trade is targeted spending with retailers to drive growth, your brand franchise/equity, and represent dollars reflected at the consumer level.
How Can You Measure This?
While short-term results may be difficult to measure, retailer level case growth is a barometer. Longer-term consumption growth, reduced spending per case, and reduced slotting are key metrics. Also, spending can be evaluated and measured by ROI, ‘cost per incremental case’, and customer profitability longer term.
So When Do You Begin to Evaluate This?
It is important to note that these are not ‘big company’ approaches – companies under $10M address some or all of these areas.