Benchmarking Category Management ROI


A first-ever survey finds standard metrics and consistent measurement metrics to be foremost concerns among CPG panelists.

While results of a first-of-its-kind survey by the Category Management Association (CMA) of the methods and practices used by suppliers to measure the return on investment (ROI) of their category management indicate broad acknowledgment of the growing importance and analytical sophistication of category management, survey participants across all channels say they need standard metrics and a consistent way to measure ROI.

The benchmark survey asked North American category management professionals to report on the prevalence of ROI efforts in their companies, and identify parameters used to measure and demonstrate them to senior management. Sixty-six CPG companies participated in the confidential online survey, with each company represented only once in the dataset. Of those, 27 percent said they currently measure ROI. The inaugural study targeted only manufacturers, with a retailer component planned for subsequent surveys CMA will field annually going forward.

“The survey was a good initial assessment, and we know that CPG companies are measuring ROI,” says Donna Frazier, founding director of Wimberley, Texas-based CMA, adding that the first-ever study brought forth an awareness of “a huge need for standard metrics and ‘how-to-measure CatMan ROI’ guidelines. Particularly in this economy,” Frazier continues, “category management is the key to a total company strategy that keeps CPG manufacturers and retailers in business. CatMan professionals want to know what their peers are doing and what is working successfully. They want to share insights so they know where they fit in terms of reporting structures and value to their companies.”

The survey includes profiles of the responding companies and their CatMan functions, specific questions about their current ROI practices, viewpoints from participants on ROI measurement, and areas for improvement. Among the foremost findings:

■ While a third of the companies do measure ROI, nearly 70 percent of those indicated they don't use a particular formula.

■ Most companies report that resources are deployed to four or fewer “significant” categories.

■ While half of the companies set a dollar goal for sales, 18 percent don't set any quantitative goal for their CatMan initiatives.

■ Retailer metrics are factored into the cost-benefit evaluation.

■ In 85 percent of the cases where manufacturers understand the customer's profitability, CatMan ROI aligns with the profitability of the customer.

Use of a CatMan Customer Hierarchy

  • More than half of all companies (57%) maintain a customer hierarchy assessing a readiness or willingness to engage in CatMan work.
  • Use of hierarchies is more common in larger companies.

One common point of view is that category management has become an intrinsic part of CPG profitability. “Our company has already moved beyond the ROI question,” said one survey respondent. “Category management is a cost of doing business, and the capability helps us win with customers.”

Respondents noted there are many areas that need improvement, particularly the lack of formal methodology and metrics. “[We] need better integration with the sales team and formal scorecard implementation,” remarked another respondent. “Currently, evaluation metrics are limited to revenue and profit at total customer level.” Meanwhile, another participant observed, “Without a straightforward way to calculate ROI, the most difficult part is to justify investments such as analytical packages that have no tangible or direct benefit.”

CMA is currently seeking additional retailer and manufacturer participation in the “How to Measure the ROI of Category Management in Your Company” white paper. For more information, visit

Advance Career Options with CatMan Training

Donna Frazier, founding director of the Wimberley, Texas-based category Management Association (CMA), says one of the most commonly asked questions she and her colleagues regularly field is: “Where can i find category management training?” It's a question asked by both retailers and suppliers, and is often followed by a second question: “Which one is best for me and/or my company?”

Both questions are asked by an array of professionals throughout the supply chain, notes Frazier — from training directors to category management department directors, sales directors and consultants — all of whom “are helping a company reach the next level of strategic competence … and [who] also know that taking formalized coursework is one of the best ways for a company or an individual to demonstrate professional commitment to category management and advance their strategic analysis capabilities.”

Many CPG companies develop in-house proprietary coursework and “expect their employees to progress through a rigorous curriculum over the course of their career,” says Frazier, while some others “mix and match proprietary coursework with industry-offered coursework offered by professional training firms, consultants, and … suppliers of syndicated data and analytics software.”

Industry trainers, meanwhile, also offer a wide selection ranging from “off-the-shelf” to fully customized training, including some courses that also offer consulting to develop a total category management strategy.

With this in mind, the list below identifies companies that have coursework certified (or that's in the process of being certified) by CMA:


Learning Evolution:

ROI: Custom Category Management Training:


The Nielsen Company:

The Partnering Group:

Winston Weber & Associates (WWA):

Many of these offerings include online self-paced coursework. All include testing, and sometimes the creation of a case study, as part of the course. Upon successful completion, this coursework may be submitted by an individual professional for credit toward personal certification at one of three levels — CPCA, CPCM or CPSA — designations ensuring that a minimum agreedupon standard at each level has been met or exceeded.

There are currently at least 20-plus titles for category management roles at various companies, which Frazier says pose an incredible challenge for human resources departments when reading resumes. “certification has helped create a ‘common language’ among CPG companies for assessing the level of competence of a potential hire,” she affirms.

“Certification-level designations also help a retail buyer assess the shelf-set recommendations of suppliers or distributors who are submitting planograms or promotions,” says Frazier, advising manufacturers and retailers to use the following training guidelines to develop their in-house training curricula:

Certified Professional Category Analysts (CPCA)

A. Basic industry Knowledge: CPCA Required

B. Category Management History and Process: CPCA Required

C. Pricing Analysis: CPCA Required

D. Promotion Analysis: CPCA Required

E. Assortment Analysis (Basic): CPCA Required

F. Spreadsheet Development (Basic): CPCA Required

G. Presentation Development (Basic): CPCA Required

H. Syndicated Scanner Data (Basic): CPCA Required

I. Syndicated Panel Data (Basic): CPCA Required

J. Retailer POS Data Analysis (Basic): CPCA Required

K. Space-planning Software (Basic): CPCA Recommended

L. Relational Databases (Basic): CPCA Recommended

Certified Professional Category Managers (CPCM)

A. Assortment Analysis (Advanced): CPCM Required

B. Spreadsheet Development (Advanced): CPCM Required

C. Presentation Development (Advanced): CPCM Required

D. Syndicated Scanner Data (Advanced): CPCM Required

E. Syndicated Panel Data (Advanced): CPCM Required

F. Retailer POS Data Analysis (Advanced): CPCA Required

G. Space-planning Software (Advanced): CPCM Recommended

H. Relational Databases (Advanced): CPCM Recommended

I. Presenting Effectively: CPCM Recommended

J. Ethical Expectations and Legal Implications: CPCM Recommended

K. Space Management: CPCM Required

L. Store-level Data: CPCM Required

M.Syndicated Geodemographic/Behavioral Data: CPCM Required

N. Opportunity Identification for Actionable Insights: CPCM Required

O. Root Cause Analytics: CPCM Required

P. Comprehensive Category Reviews: CPCM Required

Q. Understanding Category Shopper Behavior: CPCM Required

R. Leveraging Data for Basic Business Solutions: CPCM Required

S. Retailer Economics and Supply Chain (Basic): CPCM Required

T. Customer Relationship Management (Basic): CPCM Recommended

Certified Professional Strategic Advisors (CPSA)

A. Retailer Economics and Supply Chain (Advanced): CPSA Required

B. Customer Relationship Management (Advanced): CPSA Recommended

C. Joint Business Planning and Value Creation: CPSA Required

D. Collaborative Partnerships: CPSA Required

E. Consultative Selling: CPSA Required

F. Understanding Shopper Behavior, Beyond the Category: CPSA Required

G. Retailer Shopper Segmentation: CPSA Required

H. Leveraging Data for Advanced Shelving Solutions: CPSA Required

I. Leveraging Data for Advanced Assortment Solutions: CPSA Required

J. Advanced Pricing Analysis: CPSA Recommended

K. Advanced Promotion Analysis: CPSA Recommended

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