If I had a nickel for everytime I heard a variation of this question, I wouldn’t need to write this blog. Whenever the discussion about the value of in-store sampling or in-store product demo, I always ask - “compared to what”?
CPG retail marketing strategy has a number of tools to create and/or improve customer demand which is the main goal of such investment. There are many people who would argue that nebulous terms like “brand awareness”, etc are also critical elements of retail marketing strategy. I would respectfully disagree with pursuing a goal that cannot be quantified in a meaningful way. Brand is what consumers think about a provider of products, based on their personal experience with these products or the personal experience of other consumers, they can relate too.
Therefore if products, collectively marketed by a brand A, consistently deliver an experience that exceeds consumer expectations over a period of time, the reputation of brand A is being built and its value is increasing. From this perspective any funds invested in activities promoting a brand outside of experiential marketing channels, are very expensive - because they deliver results which are very hard to measure or not relatable to actual business goals, i.e. Low or No Return on these investments.
There are many definitions of a retail marketing strategy that can be found online, in magazine articles and in thick paper books, but in simple words they all agree that retail marketing strategy is any set of activities that increase retail shoppers' traffic AND increase sales of the products in stores.
Marketing managers often use in store promotions to stimulate sales of the products and improve customer experience. Sow, why do so many CPG brand builders think that in-store sampling is more expensive than other marketing investments?
Here are a few reasons why some retail marketing strategy practitioners hold this opinion:
In conclusion, an in-store sampling is not “expensive” or “cheap”, it can be valuable or wasteful. It is not just WHAT you choose to do, it is HOW you decide to execute it. If you are ready to extract measurable value from your in-store experiential marketing investment, we can help to make it a reality.
It is notoriously difficult to measure the impact of a brand’s marketing efforts – particularly when it comes to offline advertising. Methods for assessing the ROI of packaging design, billboards, pamphlets, TV advertisements and other traditional offline marketing tactics extremely vague.
This can lend a hand in explaining why the pioneers of the online digital marketing industry, such as Google, Amazon, and Facebook, have seen such explosive growth. After all, the digital funnel analysis can easily provide you with important marketing metrics such as how much reach your advertising has, customer attribution, and cost of customer acquisition, while most brick and mortar marketing efforts cannot.
So the question is: how do you fight this seemingly uphill battle to measure the monetary value of building brand awareness?
In-Store Demo Campaigns
Most people undervalue a long-term impact of In store Demo Campaign, because they do not have a methodology to measure the holistic impact of their event. In other words, ROI is measured only by the amount of product sales during the demo instead of the “big-picture” impact.
While demo sales are certainly an important metric, and are fairly easy to acquire using demo reports and/or POS data in stores, it does not tell a complete story.
The reality is, with proper analytics in place, in-store demo campaigns can provide you with complete visibility into the ROI for every dollar that is invested.
Economic Valuation of Brand Building
When you ask CPG brand builders why they invest time and money into conducting demo campaigns, you will hear a combination of the following responses:
All of the above are very worthy goals, so how would you know if you achieved them or not without assigning economic valuations to them?
Economic valuation of the first two goals are reasonably well represented by sales receipts achieved during the demo event and additional sales uplift during 3-4 weeks immediately following the event. The only sources of such data can be the store POS or the distributor sales order records. But how does one measure the economic value of brand awareness?
A brand is the way a company, organization, or individual is perceived by those who experience it, and growing brand awareness means getting as many people to experience your product or service as possible.
The economic value of brand awareness can be calculated adopting the methods that are commonly used by digital marketers. One of the most effective promotional channels for building brand awareness is internet banner ads. Their effectiveness can be attributed to the powerful algorithms which serve ads using factors such as keywords, demographics, location, and remarketing in order to promote your brand and generate awareness in a very relevant way.
However, there are some big criticisms of online advertising especially around rising data privacy concerns. Ads can be “creepy” in the way they use demographic data and follow a person around the internet.
One may argue that an in-store demo is comparable to running “cold” online advertising (targeting an audience that has not interacted with your company). The goal of each is essentially the same: capture a moment of a potential customer’s attention in order to boost brand awareness.
On the other hand though, the value of tasting a product, interacting with a product, and having direct communication with a brand ambassador, or is a more authentic and valuable interaction than clicking on an advertisement would be. In addition, a consumer may feel more open connecting with a brand in an offline environment, where they are not concerned about their online privacy.
The point is not to argue whether in-store demos are better or worse than online advertising, as the success of different marketing channels can depend heavily on your specific product or service.
Rather, the point is that ROI of in-store demos are often substantially undervalued when, in fact, they should be seen as a valuable offline method of brand awareness building, comparable to online advertising. Therefore, similar methods should be used analyzing the holistic, “big-picture” ROI of an in-store demo, versus simply focusing on the low hanging fruit metrics, such as day sales.
If you’re curious to learn more about getting better analytics from your in-store demos, you can find a free copy of Demo ROI Calculator template by clicking on this link.
One of the recurring complaints you would likely hear from Field Marketing Managers and Demo Coordinators is how unreliable are the Brand Ambassadors they have to deal with. In fact, if you ever experienced scheduling a few demos, you have probably endured a Brand Ambassador's last moment cancellation or "now show".
I would like to posit that the Brand Ambassadors' perceived lack of reliability is not necessarily caused by their mercurial personalities, but by the nature of their business and unavailability of appropriate time management tools. Consider the fact that most Brand Ambassadors are independent contractors who try to earn their living selling their personal skills in small time increments. After all, most in store demos only last 3-4 hours. As such, the Brand Ambassadors need to market their services to Demo Coordinators, Brand Managers, etc. as well as delivering these services in stores and events.
It is impossible to estimate how many hours a Brand Ambassador has to market their services to get a single demo for which she can earn $60-$140. This reality forces them to continuously work with multiple Brands, conflicting times and constantly changing dates.
Demo scheduling is a very fluid process that requires a lot of flexibility from all participants, from Brand and Field Marketing Managers to store personnel, product distributor, to Brand Ambassadors. However, the last link of this chain, the Brand Ambassador, is the least equipped to deal with the demands of flexibility. The byproduct of a flexibility is uncertainty. In the case of Brand Ambassadors it is the uncertainty of being paid for their efforts, while everyone else is paid their hourly salaries. If the changes to dates and times create a conflict with their commitment to other brands they work with, they are the only link in the demo chain who is not getting paid.
Consider the fact that most Brand Ambassadors use a phone, email, Google Calendar and spreadsheets to manage their business commitments and activities, and you will see a picture of a juggler, desperately trying to keep all the "balls" in the air. It is only a matter of time and gravity before some of these "balls", i.e. demo commitments, come down crashing to the floor and cause the last moment cancellations or "no show".
Event Management Software
There are myriads of project/task/shift and event management services available online today. However, all of them are designed for the owners of these business processes, who are in a position to control steps, tasks and communications. Not for the last link of the process chain, Brand Ambassador, who is on the receiving end of all that "flexibility". Besides, many Demo Coordinators do not use such services either because they do not offer enough specific help for the demo management process, and are not a good fit for other demo management tasks.
Use of the right tool for intelligent scheduling and coordination of ever changing demo requirements can go a very long way to reduce the frustration and "flakiness" of Brand Ambassadors. Additional benefits include:
- increased productivity of a Demo Coordinator who can manage 400-500 demos per month
- controlled automated communications with all involved parties
- greater availability of Brand Ambassador time to you because the use of such a tool reduces the uncertainty of Brand Ambassadors being paid for their time and efforts
- automated generation of BA invoices, payment statements and BA tax preparation documentation
- online demo reporting and data collection for subsequent analysis supporting Field Marketing ROI calculations.
Field Marketing is More Effective
Field Marketing is more effective than any other form of advertising because it can measurably impact sales in a very direct and accountable way.
“Half of my advertising budget is wasted away. Unfortunately I don’t know which half” is the quote attributed to John Wanamaker, Philadelphia retailer and marketing pioneer. Even with the advent of digital advertising it is difficult to account how ads exposure and clicks translate into actual unit sales.
Difference Between Solid ROI and Lost Sales
“Per our study (Adweek), in the U.S. 39 percent decide brand choice inside the store and that decision is most frequently triggered by a product demo versus other activities. Twenty-nine percent of shoppers buy products impulsively in-store. How would you rework your marketing if you had this information about your brands?
Activating brands in-store is the single biggest investment most manufacturers should make today, and using a shopper insight-based approach will be the difference between solid ROI and lost sales.”
In Store Demo Campaign
Any field marketing manager can easily figure out the complete cost of in store demo campaign. Understanding factors that contribute to return on this investment is a little more challenging. Most brand builders realize that the product sales during in store demo are only one piece of this puzzle. While it is easy to measure it is only the tip of the proverbial value iceberg.
Another contributor to in store demo profitability is the product residual sales uplift that often lasts weeks after initial event. You need help from the grocer’s POS data or your distributor”s sales reporting to detect and measure it. Keep in mind that grocers benefit greatly from your in store demo investment, as these events lift sales of an entire product category and promote more traffic in their stores. Your demo reports data also has value to both grocers and distributors, and can be used to incentivise them to pool your information resources together as it enhance the value of this information for all.
Brand Awareness contribution of In Store Demo
Lastly, the brand awareness contribution to profitability of in store demo is often targeted, but rarely measured. We have borrowed a methodology from CAC (Customer Acquisition Cost) calculations as it is commonly used in digital marketing to simplify brand awareness contribution estimates and incorporated it into the Demo ROI Calculator available free of charge.
To build this Calculator, we analyzed data collected during thousands of in store demos, including sales numbers for demonstrated products, day of the week variations of foot traffic during the events, and number of shoppers who tasted a product without purchasing it. We also looked at follow-on sales of these items for four-five weeks after the events. This data is a critical asset in your drive to secure more and better shelf space in the stores.