Category Archives: Shopping behavior

Working it in store

supermarket 70774
Where impulse will get'cha

The proof is in the pudding, as the saying goes, and especially so when you are talking ROI for marketing programs.  We’ve posted often enough about the value of metrics and measurement, and nothing is quite as satisfying for a marketer than to see those sales needles jump in-store.

That’s because no matter how brilliant or elegant your marketing plan is, if it doesn’t play in Peoria (or wherever your target market is) then you’ve failed.  The ability to have it work in-store — where the rubber meets the road — is where it counts.

This is especially so when you consider that in-store marketing has recently surpassed the $18 billion mark and is projected to grow significantly in the next five years.  Regardless of the relevance and performance of  primary drivers (see last week’s post), over 70% of buying decisions are said to be made in-store .

Savvy retailers then partner with their vendors to ensure they are keeping a sharp eye on the results of their programs.  Unfortunately for most retailers, developing a program template that achieves reliable results is still a work in progress.  According to MarketingLab, most claim less than half of programs are successful, but as with much of media, the question is:  which half?

The chart below reflects the interesting results of  what promotions and merchandising activities seem to work best:

To us it’s not surprising that “Seasonal Programs” are the  most effective , with almost 30% of responses.  After all, if most shopping is done on impulse then “what’s hot now” is certainly a key motivator.  We would combine this with the “Short Term” stat because, again, it’s the now-or-never inpulse that drives sales.

Within the seasonal focus we would add themed promotions.  We’ve found that when you build an event and display around a well-executed theme — even ones as mundane as “Christmas in July” “Winter Wonderland”, “Fruitful Fall”, or even “Fiesta Days” –customers are drawn in by the visuals (retailtainment)  and the promise of a bargain.

When it comes to the second most effective in-store tactic being media-specific, again, we are not surprised.  Radio, especially, which does not require shoppers’ active attention and plays a strong subconscious influence, is the most cost-effective and easily-measurable.  

VOXPOP, a leading in-store media company, reports that over 40% of shoppers who listen to in-store radio are influenced to buy differently.  They also report 300%+  lifts from their campaigns.

Finally, the higher percentage of success with in-store as well as department-specific programs reinforces that a cohesive effort that goes across all store departments is the best.

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SPECIAL SERIES-Post #5: Mastering Metrics

This is the fifth and final of a “back to basics” review series of the marketing process.  For series introduction, see 4/5 post.

We’ve often posted that being able to analyze and measure the effectiveness of a marketing program is critical.  We’ve also noted that industry experts say that about half of all advertising dollars spent is wasted:  the key is knowing which half (few do).  So, how do you know what works?

With most marketers today understandably concerned about keeping their jobs or clients, they may be loathe to actually find proof  their programs don’t work or have a negative ROI.  Yet knowing how to present metrics masterfully in this climate of fear can work to great competitive advantage. 

Every market researcher knows that it is not the actual study findings that count but how you present the numbers.  Statistics can be interpreted in numerous ways, and research firms are sure to present theirs in a manner that at least shows there is opportunity out there for their clients.  Or, at least they suggest a follow-up study to ensure they will be rehired…

There is also now the element of social media, where readily-available stats for websites, blogs and tweets are daily reminders of  direction.  Importantly, clients can easily access those too, so marketers are no longer the lone gatekeepers of metrics.  

In fact, the new social media metrics are a world unto themselves, with new lingo such as buzz rate (see post below re ambush marketing which beautifully illustrates this.  We’ll address the new social media metrics in a later post.  Remember:  this is a “back-to-basic” series…)

We’re also not going to address complicated econometrics and regression analyses here.  Leave those for the academicians or those pesky auditors.  

Then, there are clever analysis programs that come under the umbrella of  the “path to purchase” where each stage of the sales-actualization process is measured independently.  Good stuff for the big packaged goods guys, as many of the smaller marketers don’t have the time or tools to do this effectively.

Instead, below are some planning tools, plus analyses and metrics that  anyone can use to determine whether a marketing plan is delivering anything:

  • COST-PER-INCH ANALYSIS.  Perhaps one of our very favorites and a standard at PR agencies, it involves the counting of  total inches or minutes your product/company received in “free” publicity from press releases, feature stories, PSAs etc. sent distributed by you.  That is then coverted to actual dollars (based on the media’s highest card rate) to arrive at the savings from not actually buying that media.  Or, how we prefer to present it:  the value added to the program.  Works best if your program has no advertising component…
  • TOTAL IMPRESSIONS.  This is another one used often by PR agencies involving the addition of the total circulation, times the projected bonus readership (i.e. most  publications have what is termed “pass-along” readership).  Often marketers will call this IMPACT, using the standard equation of:  REACH + FREQUENCY = IMPACT.  This is one that only works with specific benchmarks (i.e.  you increase your goals each year).
  • COST PER STORE.  We kinda like this one if we are doing multi-store or chain programs where we can look at the store traffic count (# customers) and evaluate what it cost to post the POP, stage the demos or the promotional event. etc.   Dividing the cost of your marketing effort by the total store or traffic count can help determine which chains/stores deliver the best ROI.
  • CPU/CPM.  Standard measurement of media, the cost-per-unit  or cost-per-thousand (broadcast rate) is typically measured against sales gained via that media.  The goal is to show you spent mere cents or fractions thereof reaching your target audience. (the “which half of the ad dollars is wasted?” quandary…)  This is  traditional mass media measurement, slowing going by the wayside in the wake of social media…
  • COST PER CUSTOMER.  This is a common tool used by sales management, where the cost of servicing the customer via visits, phone calls, baseball tickets, etc.  is pitted against sales to him/her.  Then, typically strategies whether to up-sell, maintain or “divest” the customer are made. (The figure varies but most companies peg the average B2B sales call today at $500+).  Sales being a component of marketing, savvy marketers need to handle this delicately with the sales managers…
  • ACV.  We wrote about this recently:  how knowing the all-commodity volume of the market and chains you are targeting  makes clear sense before making a marketing investment.  Lots have been spent on only few,  just like some salespeople spend way too much time trying to sell widgets in Montana…(check out the state’s ACV.) Again, the key here is ensuring your efforts are in line with the potential of the market.
  • BDI/CDI.  Another potential-measurement tool is the Brand Development Index vs. Category Development Index.  This is a more complex matrix exercise where you plot, using sales data, the position of your product’s total category sales (all competitors, including you)  in the marketplace vs. your own product’s sales (your brand).  The resulting matrix illustrates whether the category is saturated or whether there is hope for your brand to grow.  More complicated, and deserves its own post, but suffice it to say that marketers should know about these tools even if they never (or pray they never) get to use them.

We hope you have found this small series of five posts helpful. (Selfishly, they will be part of a book by your blogger some time…time permitting)   Let us know if you would like some more of these series in the future and which topics are of special interest!

SPECIAL SERIES-Post #2: Aceing ACV

This is the second of a “back to basics” review series  of the marketing process.  For series introduction, see 4/5 post

Now that your multi-element marketing plan is in place, you need to take it on the road.  The question is: where to?  

Allocating marketing dollars is one equation everyone struggles with at some point.  As one famous ad man quipped:  “Half of all advertising spending is wasted.  The key is knowing which half.”

We were gratified for the recent opinion of a blogmaster (those who write these for a living:  the easy life!) that echoed what we wrote about on 11/11 and then again on 3/10 about…fishing.  Daniel Scocco (daniel@dailyblogtips.com) guest-posted on Copyblogger, and we paraphrase that here because it is worth repeating…ad nauseum:

Go where the fish are!

What is the most important factor you need to have if you want to go fishing?
Most people will say the fishing rod. Others will say the bait, or a boat. Interestingly enough, they are all wrong.  The most important element of the equation is the presence of lots of fish.  If you have a lake full of fish but don’t have a fishing rod or bait, you can probably still improvise something that would let you enjoy a fish dinner tonight.  But no matter how great your bait or how cutting-edge your equipment, if there aren’t any fish, there’s no fish dinner…That means…[you need to] target known customers willing to spend money.

 

Remember that we wrote about on 3/10 how ACV — all-commodity volume — is the retail segment keystone because it measures actual sales activity, not just population.  When you target a market with high ACV, you simply have a larger number to bite your bait.  After all, 1% of  millions is something.
 
 Yet there are times when marketers want to go to smaller ponds.  Fact is, high-ACV (“A” markets) such as Los Angeles, Chicago etc, are expensive.  Media costs and, in fact, costs to implement promotional programs there are typically much higher than in B or C markets.
If your budget does not allow this, or if you have a very specific product niche, then focusing on a smaller market makes sense.  But here the key is to know the specific demographic of your target to ensure no wasted dollars.
We urge you to invest in market research (primary and secondary), scanner data and psychographic studies that tell you all about your target.
Segmenting the market is the key to success today, and one that giants like Unilever have down pat with their excellent studies on ethnic and generational groups.  Then, you can tailor your message accordingly.
In short,  if you want to be a successful fisherman today, you’ve got to ace ACV.
NEXT WEEK:   The retailer’s angle…