What is the source of benefits and return on investment from the implementation of Promax in our company?
Detailed below is an example of the anticipated ROI that can be achieved in the various impact areas.
Component Impact Area: % of ROI Savings
- Prediction of promotional event ROI Denial of spending; reduction of spending for “bad” events: 40%
- Reduced deductions; clean invoicing and accounts receivable. Reduced paperwork handling, enquiries, and accounting staff: 30%
- Forecasting accuracy, prediction of promotion event spike volume and timing. Better prediction of promotional lift and baseline sales; lower finished goods inventory; less direct labour; higher customer service levels; higher sales: 20%
- Other business efficiencies. Reduced time spent reacting to problems; crisis meetings; digging for missing promotion information: 10%
Promax promotion optimisation technology will assist clients to reveal opportunities for the more effective application of trade spend budget. In those customers that have applied this approach to their business they have achieved gross profit improvements as much as 5%. The extent to which our clients can expect improvements of this magnitude will be driven by the decisions made by the business and profit targets may not be the sole objective for the business. Promax optimisation technology will allow clients to model alternative scenarios and construct a promotional strategy that is targeted at the business objectives.
That being said, the ROI from a Promax project of reasonable size should see the project investment returned inside a year from the “go live” milestone.
Visibility of customer profitability is a key outcome from Promax. From a strategic perspective Promax allows the analysis of customer profitability and the optimisation of pricing strategies to maximise the bottom-line outcome for the company and its trading partners.
Throughout all stages of planning within Promax PX (Strategic & Tactical) the financial outcomes of the promotional plans are available. These results show information about the profitability of the deal for organisation and retailer. This allows the user to ensure that desired customer profitability targets are met.
Analysis of customer profitability occurs in the planning, execution and post event phases of the promotional program. Powerful goal seeking functionality allows the user to create promotional plans that need the desired financial goals in a quick and efficient manner.