An effective shopper marketing program has three key attributes: it changes shopper and consumption behavior; delivers against the company’s profitability objectives, and delivers against the retailer’s objectives too. So how to develop an effective shopper marketing program. In this blog we’re going to introduce a six-step process to do exactly that!
The six-step process to developing effective shopper marketing programs
As you can see the first three steps are grouped together into one master step: defining objectives. This is because we need to consider each of these three steps together. It also reflects the fact that the process of planning a shopper marketing program doesn’t always start with consumption. Lastly, the process reflects that we can’t finalize any objectives until we have considered each of consumption, shopping and channels.
Step 1: Consumption Opportunities
Our goal as a company is to drive consumption, so that is where we start. Out shopper marketing program should be designed to deliver against a clear and specific consumption opportunity (for example to drive penetration of the brand among a particular consumer segment, or to encourage consumption at a new occasion). We therefore need to define the consumption opportunity in terms of who the target consumer is, what their current consumption behavior is, and what their future behavior will be.
Step 2: Shopper Behavior
To enable that consumption, there is a need to change shopping behavior. For a consumer to use a product at a new occasion, someone needs to buy that product and ensure it is available to consume. We can therefore describe the shopper objective by identifying the target shopper, their current behavior, and what their future behavior will be.
Step 3: Prioritizing Channels
The final element of ‘defining objectives’ is is to consider channels. In which channels might it be possible to influence the target shopper to behave differently? Will this happen in a number of channels, or in one specific channel? How many shoppers in each channel?
These three steps are shown as sequential, but that isn’t always the case. You might be planning an activity for a specific channel or retailer: that’s no problem. But we still need to understand what impact on consumption we are planning, who the target shopper is, and the percentage of the target shoppers can be influenced in that channel. If not, we could badly over-estimate the value of the activity in this channel.
At this stage we should be able to complete our objective by specifying:
- Who the target consumer is, their current behavior, and their future behavior as a result of this program (this should include brand and category level data)
- Who the target shopper is, their current behavior, and their future behavior as a result of this program (this should include both brand and category level behavior)
- What will be the impact on the company’s finance – sales, profit, and Return on Investment
- The impact on the retailer’s finance (sales, profit, etc. depending on retailers key KPIs)
Step 4: Selecting Mechanics
With clarity on the consumer opportunity, target shopper behavior, and channel, we can now move onto step four, and consider which potential mechanics might best deliver the desired behavioral change among the target shopper in that channel. We need to consider both the impact on the shopper, as well as whether or not the activity would be acceptable to the retailer.
First, brainstorm all the potential activities you can think of. This works great if you can involve some of your colleagues from marketing and sales. Brainstorms work better with more people and you’ll get better buy-in from other functions if you involve them in the process
You can then prioritize against the three sets of objectives:
- Impact on consumption and shopper behavior
- Impact on company’s finance
- Impact on retailer
In the final step we can select the most appropriate mechanics that deliver best against our objectives.
Step 5: Calculating the Return on Investment
At this stage we can now calculate the RoI. As we do so we may find at this stage that none of our ideas deliver perfectly against all our objectives. That is fine (and common). We could go and brainstorm again, or consider whether our initial objectives were appropriate, or too stretching. Remember that most activities don’t deliver perfection! If necessary, rewrite the objectives, but ensure that there is still at least one objective for each of the three attributes of an effective shopper marketing program.
Step 6: Evaluating the Activity
The final step is to evaluate the activity. We need to measure the impact of our activity against each of our criteria. Did consumption or purchase behavior change in the way we anticipated. What about the impact on sales and profit – for us and the retailer? What was the RoI. The activity must be evaluated against each of its objectives.
This step, overlooked by so many organizations is critical, as it helps us improve in the future. Activities that deliver against their objectives can be repeated. Activities that don’t – well they must be either scrapped, optimized, or used selectively. For example an activity that doesn’t really impact shopper behavior in a valuable way, but meets financial objectives for both the manufacturer and the retailer may not be perfect, but it’s a great tactical promotion, and certainly better than any activity which loses money. A promotion which loses money but changes behavior in a significant way may be high value in the longer term. Perhaps tweaking it might improve its financial performance, or perhaps the long term benefit is worth the short term cost? And of course an activity which delivers the desired behavioral change, the desired financial return and keeps the retailer happy is a real winner!
Improving the performance of shopper marketing programs isn’t about delivering an overnight success. It is more about making incremental improvements: choosing the right activities in the first place, identifying the winners, weeding out the losers, and optimizing the others. Over time, systematic evaluation will improve the overall returns from shopper marketing programs.
Insert process chart (Brainstorm potential activities, prioritize activities, select activities)