Companies expend a huge amount of time and effort on shopper marketing programs and activities. And the data that we’ve seen suggests that this is increasing, and likely to increase in the future. Unfortunately, not all of the programs and activities are effective. Our evaluations suggest that as many as 70% of shopper marketing activities lose money for manufacturers. And beyond this, there more to an effective shopper marketing activity than just making money! What makes an effective shopper marketing activity?
Effective Shopper Marketing Programs have clear objectives
If we think beyond shopper marketing, and think about any activity – what would make it effective? An effective activity would be one that met its objectives, right? So, an effective shopper marketing activity would be one that meets it objectives. To help us answer this question, let’s first consider what objectives should we set for a shopper marketing program to ensure that it is effective?
Effective Shopper Marketing Programs change consumption and shopping behavior
Let’s start with consumption. If our activity doesn’t increase brand consumption, then we aren’t driving growth. As stated in our definition of shopper marketing, shopper marketing should ‘influences shopper behavior in such a way as to positively impact consumption of the brand and or category’. So, an effective shopper marketing activity should change shopper and consumption behavior. If it doesn’t, arguably it isn’t shopper marketing. Whether we are driving penetration of a new product or encouraging shoppers to buy more to fuel increased consumption, or supply new occasions, an effective shopper marketing program should create a change in consumption and shopper behavior.
Effective Shopper Marketing Programs meet the company’s profit objectives
Let’s now look at profitability. Our company is a business, after all! The company is investing both time and money into this activity, so to be effective, our activity must deliver a return. What return is appropriate, and how should it be measured? We’ll pick that up later. For now, we can see that a key attribute of an effective shopper marketing program is that it should meet the company’s financial objectives.
Effective Shopper Marketing Programs meet the retailer’s objectives
Finally, let’s consider the retailer. In the vast majority of circumstances, a shopper marketing activity requires the support of a retailer. Why would a retailer support an activity? Because it supports their objectives. As a manufacturer we aren’t responsible for the retailer’s objectives, but if our activity doesn’t support them, they might not support us! And they’d be less likely to repeat the activity and support it in the future. So, an effective shopper marketing activity also has to support the retailer’s goals.
So, there are three attributes of an effective shopper marketing program. Firstly, it delivers a positive change in shopper and consumption behavior. Secondly it meets the company’s financial objectives. And thirdly it meets the retailer’s objectives. Is a program that doesn’t meet all of these a disaster? Not at all! After all, most activities currently don’t meet these criteria! But if an activity doesn’t deliver against all of these, then perhaps there is an opportunity to improve it, tweak it, or replace it with a more effective activity. The starting place has to be defining ‘effective’, then evaluating activity against this. From there we can work to improve, so that in the future more of our activity is truly effective.