314. Where Your Trade Spend Is Quietly Bleeding Cash

0:00If you're like most founders, trade spend feels expensive, margins are tight, cash flow matters, and it feels like you're spending too much money. But here's the truth. Most brands are not overspending. They're leaking money and they don't even know where. The problem isn't what you're spending. It's what you can't see. Set a 15 minute timer. Answer these questions honestly. If you hesitate, that's where the leak is. Most brands lose money in promotions, timing, placement, deductions, visibility, execution, and decision making. You don't need to spend less. You need to see more clearly. Download the free 15-minute trade spend leak finder in the show notes and use it.

0:41Then join the free webinar where your trade spend is quickly bleeding cash. I'll show you how to fix the leaks, how to improve ROI, how to build a system for growth. Are you ready to hear more? Welcome to the Bulletproof Your CPG Brand Podcast where we discuss the tactics and strategies you need to give your brand the unfair competitive advantage it deserves. Hello, I'm Dan Lohman. Be certain to comment and subscribe to get immediate access to new brand building episodes. Please recommend this to friends and colleagues and help me raise the bar in natural. Let me know what your most pressing issues are and I'll do my best to address them on future episodes.

1:18There's a free downloadable guide at the end of every episode to help you go deeper into the topics we discuss. Now let's roll up our sleeves and get started. where your trade spend is quietly bleeding cash. It's not a spend problem, it's a visibility problem. Most brands don't have a trade spend problem, they have a visibility problem. Let me explain. If you're like most CBG founders, trade spend feels expensive. You're looking at your promotions, your deductions, your invoices, your margin, and it feels like we're spending too much money. So what do you do? You cut costs, reduce promotions, negotiate harder, and you pull back spend.

1:56But here's the uncomfortable truth. Most brands are not overspending. They are leaking money and they don't even know where it's happening because the leaks don't show up clearly in your reports. They show up in missed opportunity, poor execution, bad timing, and invisible decisions happening around you. So today I'm going to show you the three most common places brands leak money in trade spend, why your data doesn't show it, and a simple 15-minute audit you can run immediately. Let me reframe this for you, why this matters right now. Margins are tighter than ever. Retailers are asking more. Costs are rising.

2:33Cash flow matters more than ever. And here's the reality. Trade spend is one of your largest expenses, but it's also one of your least understood. Most founders don't have a trade strategy. They have habits, expectations, and reactions. So money leaks quietly, not because you're careless, because you can't see it. And this happens to brands of every size, but smaller brands have less runway to easily absorb it. Here are the three places you're leaking money. Let's break this down into something you can actually use. Leak number one, ineffective promotions. This is the biggest one. Most brands run promotions and measure success like this.

3:13Did sales go up? Did we hit our volume targets? did we get display to support? In our paper, it looks like it worked. But here's the problem. Many of those sales would have happened anyway. You're not creating demand. You're subsidizing it. You're discounting your loyal customers, your repeat buyers, the people who are already going to make a purchase and calling it growth. What this looks like in real life, you run a promotion, sales spike, everyone feels good. Then the promotion ends and sales drop back down. Let me repeat this. Sales drop to the same level as soon as the event ends. No retention, no behavior change, no long-term impact.

3:53That's not growth. That's leakage. That's trade dollars wasted. That's less runway for you to grow and scale. What to do instead? Start asking a different question. Did this promotion create new behavior? Did we attract new shoppers? Did we increase basket size. Did we improve a repeat purchase? If not, you're leaking money. Leak number two, poor timing versus competitors. This one is almost invisible because your data will never show it and your trade marketing software will overlook it. You run a promotion, you see your lift, you evaluate your results, but what you don't see is what everyone else is doing at the same time.

4:35This is what this looks like. You run a promotion at the same time as a major competitor, a category reset, a retailer-wide event, a competitor retailer, or a pricing shift. Your results look average, so you assume the promotion didn't work as well as it expected. But the truth is, you were competing in the wrong moment, or worse, you were drowned out. Why this matters? Trade marketing is not just about what you do. It's about when you do it and what's happening around you. Without that visibility, you're making decisions in isolation and your competitors are taking your sales. Let that sink in a moment.

5:14What to do instead? Before your next promotion, ask, what else is happening in the category right now? Who else is promoting? What pricing changes are happening? Is this a high noise or low noise window? Timing alone can dramatically improve your ROI. Leak number three, weak placement, the silent killer. This is the one that quietly destroys brands, and most founders completely underestimate it. Shoppers can't buy what they can't find. Here's a real-world example. I've shared this before, but it's worth repeating. A brand launches into a major retailer. They did everything right. Great product, strong promotion, solid demand.

5:54A customer went in to buy it. They looked where they expected it to be. It wasn't there. They checked nearby sections, still nothing. They asked store associates, they couldn't find it either. Eventually, they found it in the wrong category, wrong shelf, wrong placement, wrong contest. That brand spent thousands of dollars driving traffic, time building awareness, resources supporting the launch, including paying the retailer to promote it, and it all failed. Not because of demand, because of placement. it. What this means? Poor schematics, inconsistent merchandising, out of stocks, missing shelf tags.

6:33These all lead to lost sales you never see because your data only shows you what sold, not what didn't sell. What to do instead? Ask, can a first-time shopper find this product in five seconds? If the answer's no, you're leaking money. Here's an important insight why your data and show this. Now, let's connect this, because this is the part most founders miss. Your data tells you what happened. It does not tell you why it happened. Your report shows sales, lift, spend, performance. But they don't show missed purchases, lost visibility, competitive pressure, shopper confusion. And without that, you're making decisions with incomplete information.

7:16Here's the shift, the visibility gap. This is what I call the visibility gap, the space between what you can see and what's actually happening. Most brands operate here. They optimize what they can measure, but the real opportunity is in what they can't see. Introducing a new framework, the retail clarity framework. This is exactly why I built the retail clarity framework, because what's missing isn't more data, it's context. Here's the simple version. Number one, internal. What happened? Your data, your reports. Number two, shopper. Why it happened? Behavior, decision drivers. Number three, competitive.

7:56What influenced it? Timing, pricing, category activity. Number four, predictive. What to do next? Strategy and action. Most brands stop at number one. That's why they leak money. Here's the call to action, the 15-minute trade spend leak finder. Let's make this practical. I want you to do this today. Set a timer for 15 minutes and run the simple audit. Audit question number one, promotions. Did our last promotion create new behavior or just discount existing demand? Audit question number two, timing. What else was happening in the category during our promotion? Audit question number three, placement.

8:37Could a new shopper find our product instantly in every store? Audit question number four, visibility. What are we not saying that could be impacting our performance? If you can't answer these quickly, confidently, and clearly, that's where your leak is. The complete 15-minute trade spend leak finder is this week's free download at the end of the episode. Download it instantly to plug other gaps that are shortening your runway. Recap, where you're losing money. Most brands think we're spending too much, but the truth is you're leaking money in three places. Number one, ineffective promotions. Number two, poor timing versus competitors.

9:16Number three, weak placement. And your data won't show it. You don't need to spend less. You need to see more clearly because the brands that win don't just measure performance. They understand what's actually happening. If this episode made you think differently, Share this with a founder looking for more runway. Visit RetailSolve.com for more brand building advice and strategies. Download the 15-minute TradeSpend leak finder along with the show notes at the end of the episode. Connect with me on LinkedIn and subscribe so that you never miss an episode. I'm Dan Lomond, and this is the Bolt Proof Your CPG Brand Podcast.

9:55If you're like most founders, trade spend feels expensive, margins are tight, cash flow matters, and it feels like you're spending too much. But here's the truth. Most brands are not overspending. They're leaking money and they don't even know where. The problem isn't what you're spending. It's what you can't see. Set a 15 minute timer. Answer these questions honestly. If you hesitate, that's where the leak is. Most brands lose money in promotions, timing, placement, deductions, execution, visibility, and decision making. You don't need to spend less. You need to say more clearly. Download the free 15-minute trade spend leak finder in the show notes and use it.

10:36Then, join the free webinar where your trade spend is quietly bleeding cash, and I'll walk you through how to fix those leaks, how to improve your ROI, and how to build a system for growth. Thanks again for joining us today. Please reach out and share your most pressing questions, and I'll do my best to get you the answers that you need on future episodes, including expert advice from CEOs and industry thought leaders. Comment, leave your questions, and get this week's free downloadable guide and the show notes at retailsolve.com session 314.