Trade promotion optimization (TPO) is the use of past trade scheme results to plan the next scheme: the offer, its depth, its timing and the outlets that get it.
Your distributors in Kano or Mombasa ran a scheme last month and orders rose. Was it good, or did stockists just load up early? TPO asks three questions:
- What would these outlets have bought with no scheme?
- How many extra cartons did the scheme bring in?
- How many were real, once you take out orders pulled from later weeks or other packs, and what did each one cost?
Answer those well and trade spend moves from schemes that only shift stock around to schemes that buy new volume cheaply.
The weak link is the street: which dukas and kiosks heard the offer, put up the display, and what each was invoiced. Fed depot shipments and guesses, a model ranks your schemes confidently and wrongly.
Trade promotion optimization or TPM: two different jobs
Trade promotion management (TPM) runs a scheme: the budget, the calendar, the rules and the claims. TPO judges it and tells you which schemes deserve another round.
| TPM: running the scheme | TPO: judging the scheme | |
|---|---|---|
| The question | Was the scheme set up, run and paid the right way? | Which scheme do we back next, in which outlets, at what depth? |
| What you feed it | Budgets, scheme rules, target outlet lists, distributor claims | Past sales, scheme records, proof the scheme ran, full costs |
| What you get back | Live schemes, accruals, settled claims | Baselines, forecast uplift, the return on each scheme, the next plan |
Sort out TPM first, since TPO learns from its records. If schemes still sit in WhatsApp groups and Excel, read our trade promotion guide.
Supermarkets and open markets need separate reviews
Supermarkets and modern trade. You agree each deal chain by chain, and some chains share till data, so TPO works by chain, pack and week. You track depth, timing and display fees, and in-store promoters confirm the deal is on the shelf.
General trade. Most volume moves through distributors and wholesalers to open-market stalls, dukas, spaza shops, kiosks and provision stores, none with a scanner. Cluster shops by type, size and area, and compare each cluster with similar shops that got no scheme. The levers are quantity slabs, free goods and period purchase schemes.
Never pool the two channels. A scheme that pays in a supermarket can lose money in dukas, and the reverse.
The five records to collect from distributors and reps
Pull each one by pack, outlet or chain, and week.
- Normal-week sales.
Sales in weeks with no scheme, across a full year: the festive rush, the rains, harvest time. - Secondary sales by outlet.
What your distributor invoiced to each shop: your secondary sales. - Scheme records.
The offer, its depth, the dates, the packs, the target outlets and who funded it. - Proof the scheme ran.
Was the offer made, the display put up and the claim filed? - Full costs.
Discounts, free stock, display payments and claims, each tied to the scheme that caused it.
A duka has no till data, so the distributor’s invoice to it is your nearest sell-out figure. So step one of TPO is usually getting distributors to bill in a distributor management system that captures secondary sales by outlet.
Before you drop a scheme, check it reached the shop
TPO assumes a scheme planned for certain outlets ran in them. In general trade it often did not: the rep forgot to mention it, the display stayed in the storeroom, the shop never claimed.
The model reads a scheme nobody heard as a scheme nobody wanted, and advises you to kill an offer that was never really tried.
Read every weak scheme beside its execution rate. A weak return with strong execution means the offer is wrong. A weak return with weak execution means the field let it down: fix the field and run the scheme again. Three checks show which it was:
- The offer on the rep’s order screen. The rep’s sales force automation app lists the outlet’s live schemes and applies them as the order is keyed in. The shopkeeper hears the offer while deciding how many cartons to take.
- A dated, geo-tagged shelf photo. A retail audit photo proves the display went up. BeatRoute’s VM Audit AI Agent is in field runs with customers; in those runs it checks the photos at 80% lower cost than a manual shelf audit.
- Claims checked against invoices. Before you pay a stockist’s claim, match it to what the distributor billed that outlet.
AAVA Brands, an FMCG company in Nigeria, had no single view of primary and secondary sales. It moved field sales and distributor data onto BeatRoute and grew store-level sellouts by 25–30% (AAVA Brands case study). That outlet-level view is what lets a scheme review tell a weak offer from a scheme that never reached the shop.
How to read a scheme: baseline, review, then forecast
Get the first two steps right on your own distributor data before you pay for any prediction.
- Baseline and uplift.
The baseline is what the same outlets would have bought with no scheme. Uplift, or sales lift, is what they bought above it. Set the baseline too low and every scheme looks like a hit. - Post-event review.
When a scheme closes, split the extra cartons by where they came from. Some are new demand. Some switched from your own other packs, which is cannibalization. Some are orders pulled forward, as stockists and wholesalers load up during the deal. - Forecast and scenarios.
Once baselines hold, a TPO model can forecast a planned scheme and compare offers, depths and dates before you spend. Compare cost per incremental carton at each depth: past a point, a bigger discount mostly rewards shops that were buying anyway.
Grade each scheme on these four measures together, since any one alone can flatter a loser.
| Measure | What it shows | How to work it out |
|---|---|---|
| Incremental cartons | What the scheme really added | Cartons sold in the scheme period, less the baseline, less the dip afterwards |
| Scheme ROI | Whether the trade spend made money | Gross profit on the incremental cartons, minus the full scheme cost, divided by the full scheme cost. Above zero means it paid |
| Cost per incremental carton | How cheaply the scheme bought extra volume | Full scheme cost divided by incremental cartons |
| Execution rate | Whether the trade really ran it | Outlets where the offer was made or the display verified, divided by outlets targeted |
Compare offers on one pack with cost per incremental carton. Compare across packs with ROI, because a cheap carton of a thin-margin product can still lose money.
Predictive AI helps at scale: it sets baselines for every outlet cluster at once and tests more scenarios than a team could. But it learns from history, so it copies every gap in your records and says little about an offer you have never run.
Test it on one scheme cycle in one territory
Prove the method on one cycle before you change the trade budget.
- Choose one category and one territory where you run schemes often. Compare two or three offers, such as a price-off, free goods and a display payment.
- Split similar outlets into test groups and one control group that gets no scheme. Agree the bar a winner must clear before launch.
- Run one full ordering cycle. Track the offer at the order, the photo on the shelf and the claim against the invoice.
- Read the results against the control group, including the weeks after the scheme ends.
Ask any TPO vendor two things. Can your team see and adjust the baseline? Can it work from distributor invoices without sell-out data?
Where BeatRoute fits. BeatRoute handles the execution and secondary-sales side of TPO. It is not a forecasting suite. It puts live schemes on the rep’s order screen, records what each distributor bills each shop, and logs whether displays went up. A planning tool linked through integrations can then learn from what really ran.
BeatRoute suits brands that run trade schemes across many distributors and outlets; if you only track a few schemes for one distributor, a spreadsheet may do.
If proof of execution is your weak spot, book a demo and see live schemes on the order screen and secondary sales by outlet.
Frequently asked questions
Is trade promotion optimization the same as trade promotion effectiveness?
No. Trade promotion effectiveness (TPE) grades the schemes you have already run. TPO takes those grades, adds a forecast and picks the next scheme. So the TPE review always comes first.
Who should own each number in a scheme review?
Name an owner for each number before the first review. Trade marketing owns the baseline and post-event read, finance the cost, sales the execution rate. Then everyone argues from one scheme report.
What if a distributor will not share invoice data?
Run the first review on the distributors whose billing you can already see. Then tie sharing to money: pay a scheme claim only once the matching invoices to those outlets are visible. Distributors who bill in a system the brand can read meet that rule without extra work.
