The first commercial spreadsheet to run on a personal computer was invented by Dan Bricklin and Bob Frankston of VisiCorp and released to the public as VisiCalc in October 1979. It ran on the Apple II. Since then, the spreadsheet has become one of the most popular and usable computer applications in history and seems to be more present now than ever.
My first introduction to the spreadsheet was to create a revenue forecast in the business plan for my first company, MEDIANET in 1984. It was Lotus 1,2,3; and I was completely over my head with it at first. Wait, what am I saying? I’m still completely over my head with Microsoft Excel® spreadsheets NOW!
Most job descriptions these days require knowledge and experience with the Microsoft family of products including Excel® because in virtually every kind of business, these are the tools of the trade. They are also the tools of Trade Promotion.
The 2022 HPM Survey on Trade Promotion shows that the spreadsheet is tagged as the dominant tool for trade promotion analytics. Of the 298 respondents in the survey, 84.8% said it was the top of the list of daily analytics tools used, ahead of commercial analytics platforms and nearly twice the percentage of usage of analytics tools embedded within the trade promotion management platform and application.
The level of functionality in today’s modern spreadsheet application is certainly worthy of having become a “system of record” for analytics and financial management. The amount of customization I’ve seen in trade promotion use cases is mind-blowing, to be sure.
A few years ago, I was asked to provide counsel and advice to a very small local food manufacturer on the recommendation for trade promotion management, planning and analytics platform. The company had less than 300 total employees and they introduced a fledgling trade promotion program to their growing retail customer base. They told me that everything ran on spreadsheets, but that they were growing so fast that they felt that it was time to invest in a full scale TPx platform. When I first gazed upon their spreadsheets, I was blown away.
They were smart enough to hire a super-user spreadsheet guru who had customized the spreadsheet so much that it looked like a true TPM application. She had created so many automatic checks and validations, created an upload configuration to integrate master data from the ERP and even an accrual calculation that ensured accurate funding. Her “planning tool” looked better than many commercial TPx solutions and was probably more functional. On top of that functionality, it had an elegant user interface that was super easy to navigate and manage.
If this company was not growing so fast and had been established for several years, I might have simply recommended that they stay with what they had—it was THAT good.
The above referenced survey shows what we all know, which is that the spreadsheet is so versatile and common, there is a level of trust that is hard to deny. Notwithstanding the obvious issue of manual entry and management where human error is elevated with the complexity of each spreadsheet, the phenomenon of preferring it over a more sophisticated and functionally superior analytics toolset keeps financial executives up at night. They worry about the accuracy of the data which, all too often, is the only source of real promotional performance and financial accountability which key account managers and sales representatives depend upon to run their planning and execution.
Hence, eliminating spreadsheets is often a top reason given for wanting to install a TPx platform.
Any TPx analyst or consultant will tell you that the number of times they see sophisticated analytics tools being ignored by the sales and trade marketing teams in preference to spreadsheets is voluminous. The same holds true for promotional planning tools where the analytics tools are embedded within the planning solution.
This is even more pronounced with the trade promotion optimization (TPO) tools. More often than not, it seems that the real work of “what if” scenario modeling that the embedded TPO tools provide is actually done on spreadsheets maintained by each sales rep and KAM.
“I’m sorry, but I don’t know what is behind the calculation of ROI I am getting from my TPO, so I don’t feel confident enough to let that be what I show my buyer,” says a longtime key account manager for a paper products manufacturer. “Don’t get me wrong, I like the TPO, but it has burned me several times, and I can’t trust it to do what I need to do with my own spreadsheet.”
First, the culprit here is more likely the DATA, not the TPO engine. Second, if you take this route, you end up with as many different variations of spreadsheets as you have sales executives. That is arguably the more dangerous scenario.
You have to fix the data problem first. But that’s another blog.
The “Fear of TPO” issue is not uncommon, and frankly is one of the main reasons why you don’t see the TPO tool as a first priority when transforming the trade promotion by implementing modern TPx functionality. And it’s not so much fear as it is change management. But that’s another blog as well.
Virtually every TPx platform has the ability to download the data managed in the application to the spreadsheet. In fact, that is always going to be a selling point brought up by the account executive in TPx solution presentations. So, we all know that there is going to be a need for offloading working data from the TPM tool to an outside spreadsheet to manage many key pieces of data required by value chain executives—supply chain, demand planning, logistics, warehousing, marketing and of course, financial planners and accountants.
Because of the amount of money paid in trade promotions, there are a lot of people across the various organizations and operating departments interested in what is going on inside the funding and settlement. Deduction management technology, for example, is now more sophisticated and most consumer products companies have a specific functional application for it, but when it comes to the research into deductions—the work done outside the application such as managing communications with reps and customers, checking fund availability and managing approval routing—those are often done on spreadsheets. While some top tier TPx vendors are adding some of those functions to their TPM solutions, it is virtually impossible to eliminate the plethora of spreadsheets across the organization where this data, in one form or another, is managed.
One of the most visibly growing areas of trade promotion management is the tracking of point-of-sale (POS) data and the subsequent analysis and evaluation of promotional performance it depicts. Because most CPG companies depend upon third party syndicated data providers for the analysis of this data, the industry as a whole has been using spreadsheets to download the source data and create more detailed analysis from it.
In fact, again, the majority of tools and outputs from the data providers have standardized spreadsheet interfaces to enable rapid transfer of data for individual and independent analysis. There is also a growing trend among CPG companies to seek more direct POS data from the retailers to enable 100% of store coverage and more frequent visibility to POS results. Because most TPx platforms have not accommodated this ingestion of data, spreadsheets are often the ONLY way sales, marketing and trade executives can analyze and apply learnings.
The consumer products, retail and value chain industries have just emerged from a month of excellent conferences and gatherings where executives have had a chance to see the latest and greatest of technology for virtually every aspect of TPx. One thing shines brightly in those conferences and that is that the vendors have created some very powerful solutions to the top problems we all face. I am continually amazed at the combination of sophistication and elegance in the functionality and user experience available on these platforms. 
As I walked through the vendor showcases, I saw and heard so many of the vendor sales people tout the ability to interface with spreadsheets—across all functionality and solution type.
So, for the TPx vendors, one of their top sales pitches is to replace spreadsheets. But they also stress their applications’ integration with existing spreadsheets, so the recognition of the importance of spreadsheets is duly noted as well, isn’t it?
I often ask a question of the audiences to whom I present, “Which is the largest trade promotion vendor in the world?” I get all kinds of answers to that question, but they are not the truth.
The truth is, Microsoft. Excel® Spreadsheets.
As Don Henley sings in the Eagles classic, “Hotel California,” “This could be heaven or this could be hell…” It applies, does it not?
Rob Hand is CEO of Hand Promotion Management, LLC, an analyst, advisory and consulting service firm in the Austin, TX area. His new book, “The Invisible Economy of Consumer Engagement” is being hailed as the top book on the subject of modern trade and channel promotion. He can be reached at rob@handpromotion.com and through the corporate site at www.handpromotion.com.
