Promotional Return on Investment
Promotional ROI measures the financial return generated by a trade promotion relative to its cost. A positive ROI means the incremental sales generated by the promotion cover the promotional investment. A negative ROI means the promotion lost money.
Industry research consistently shows that a significant proportion (estimates range from 50–70%) of FMCG trade promotion spend generates negative ROI. Revenue Growth Management (RGM) programmes focus heavily on improving promotional ROI by reducing frequency, targeting depth, and better timing. Retailers also scrutinise promotional ROI through JBP review processes.
Promotional ROI analysis is a core skill for National Account Managers, Trade Marketing Managers, and RGM Analysts. Demonstrating that you've improved promotional ROI (e.g., 'reduced value-destroying promotions by 30%, improving total promotional ROI by 22%') is compelling interview evidence.
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