In the trade promotion world, a great deal of attention is being paid these days to measuring results. This is quite understandable and quite proper, many billions are spent on trade promotion, and it is essential that the effectiveness of those billions be evaluated fully.

Too often, however, all those dollar signs obscure the fact that billions are also being spent on the processes connected to trade promotion, and that those processes also need to be measured, if only because, as we all know, what can't be measured can't be managed, and what isn't measured too often won't be done.

So here we will discuss the measures a manager or executive might use to evaluate the efficiency of a trade programs processes and how the program is being utilized, we will leave for another day the discussion of ROI and effectiveness (though, in fact, in some cases the efficiency measures may correlate with effectiveness measures).

The most common descriptions of the trade promotion process are to view it as a circle. But, to describe it lineally, it runs: Budgeting, Planning & Forecast, Execution, Monitoring Compliance, Settlement, Post-Analysis. And then, to complete the circle, back to Budgeting.

A well-run program will have measures in place that touch on each of these, and in many cases measure across them.

The most obvious measure of Budgeting, of course, is whether you are within budget, how much is being spent versus what was budgeted? Beyond the gross numbers, the Budget vs. Spend should be measured by account, channel or class of trade, sales rep, region, division, brand, fund, and any other categories you might have. Even if there are not serious overages, the differences will be instructive.

The same sort of measures should be expanded to include what was planned, giving a comparison of Budgeted vs. Planned vs. Spent.

In addition, if you have accrual-based programs, you will want to measure what is accrued versus what is spent, again breaking it down by account, channel, region, etc.

In measuring Planning, one metric (comparing what is planned to the budget and the amount spent) has already been mentioned. But an important efficiency measure is to compare the date plans are entered against the date of the activity planned. There are few bigger problems in many programs than the frequency with which plans are entered after the fact, and you should have a measure of that frequency, by account, rep, region, etc.

The measure of Forecasting is obvious, how accurate are the forecasts? What percentages of initial forecasts are within given percentages of actual results? Consistent misses of the same type (e.g., bigger misses for one particular brand, or for a particular event type) may point out problems with the forecasting tool, or changes in consumer or trade behavior.

Execution in one sense is measured by how many planned events take place, and is therefore covered in the comparison of Budget vs. Planned vs. Spent. The other measure of Execution is in terms of such things as how many of your displays were set up; whether the ad that was to be in a circular in five hundred newspapers appeared in five hundred or some lesser number; whether the temporary price reduction actually took place; and similar questions. Getting the data can be a serious question itself. But gathering such reports is important, since it impinges seriously on your effectiveness measures: Your measurement of the effectiveness of in-store displays, for example, will be meaningless if the displays are not being implemented.

Compliance Monitoring is a part of the measurement process, but it can be measured itself in some categories. Where there is some kind of billback process in which a claim is submitted with documentation (as is common in consumer durables and business-to-business) and a check or credit memo issued for payment, the time involved should be measured, since it is an important customer satisfaction issue. Additionally, the frequency with which claims are rejected or partially disallowed should be measured, both as a customer satisfaction measure and a measure of where problems might exist in the program (if claims of a certain type are being rejected with great frequency).

If most of your settlements are by deduction, your Credit Department (or whoever clears the deductions) should have many measurements in place. If you pay by check or credit memo, it was mentioned above that you should measure the time from receipt of claim or billback to the issuance of payment (and, ideally, each step in the process).

And finally, with post-event analysis, the primary measures would be of time, how long does it take to collect the data and do the analysis, and of accuracy.

Some other things you might want to measure include:

Expenditure by Activity Type, This tells you what you are buying. How much of your spending is for in-store promotion versus media, or slotting, or TPRs or all the other options. Broken down by account, channel, and other variables, this may give some insights, especially when combined with effectiveness reports that tell you which activities provide the greatest lift and/or profitability.

Expenditure by Product/Brand, This report may be required by Finance, which may use it to allocate the costs of the program. But in any case, it again provides insight, especially if the spending patterns are not consistent with profitability variations among the products.

If your product has significant seasonal variations, you will also want reports on spending by season to track whether the spending is in sync.

There are also purely administrative and customer service measures, such as web usage, if you have a program website accessible by your customers, who is accessing it and who isn't? Phone and email communications from customers, complaints and program inquiries, should be measured as well.

There are numerous other reports that you can design, these are simply the basic ones that almost everyone should have. The others you need might depend on the specifics of your program and, more importantly, your goals for the program.

But remember, there are dangers in having too many reports, just as there are in having too few. The most basic danger is that an information overload leads to the few nuggets of really important information being buried in a mountain of trivia. You should probably have some kind of dashboard for these reports that will signal the problem areas.

We began by mentioning that most attention these days goes toward measuring program effectiveness, and nobody questions the importance of that effort. But although measuring processes is considerably less exciting, many of these measures will contribute to the accuracy of the effective's metrics. As always, it's necessary to get the most basic things right, and that won't happen unless you are measuring those basics.

Bob Houk is the executive director of the Trade Promotion Management Associates. He has worked in all aspects of trade promotion over the past four decades, retail, distribution, manufacturing, outsourcing, software and consulting, covering virtually every channel and product category. He has written three books on the subject, most recently Trade Promotion Marketing, published by the Association of National Advertisers in 2006.