Much has changed since the concept of integrated marketing communications (IMC) was introduced by Don E. Schultz some 30 years ago as a way of looking at the whole of marketing communications instead of deploying each of the parts separately. So much has evolved since then, with the advent of microtargeting, 1-to-1 marketing, retailer media networks, consumer content, and other developments, but the basic goal is still the same — to create synergies through integrated marketing campaigns. IMC can be an expensive proposition, but certain integration initiatives have been shown to develop the desired synergies without overspending on an opportunity.
Five best practices to integrate well:
- Integrate shopper marketing with trade to increase ROI
- Discount less (“price up”) and “spend back” on shopper marketing
- Add profit by timing coupon campaigns with trade promotions
- Reach shoppers all along the path to purchase with both messaging and offers
- Use scale and partnerships to create shopper solutions and share program costs
These four best practices were uncovered from a meta-analysis of 30,000 shopper marketing events measured using analytic methods specifically designed for shopper marketing. These events included products from every department of grocery, supercenters, club, drug, convenience, dollar and commissary outlets. The sales lift, return on investment and diagnostics were measured for every tactic in each of these events using analytic methods specifically designed for shopper marketing. These results have accumulated in the Foresight ROI Shopper Marketing Industry Benchmarks database.
1. Integrate shopper marketing with trade to increase ROI
This is arguably a necessity in many cases. Shopper marketing oftentimes must be integrated with trade support to gain shoppers’ attention. That holds true for retailers’ attention, too — adding shopper marketing to a trade program can garner more and better merchandising. The synergy is powerful. When trade support for shopper marketing is above average, shopper marketing ROI increases by 20%, and when shopper marketing support is above average, sales lift from trade increases by 35%. What tends not to work is running shopper marketing events in between trade events. Let’s say, for example, that a hotdog manufacturer has just loaded up shoppers with a Memorial Day BOGO deal. A web ad or recipe probably won’t entice people to buy hotdogs again soon. The timing is off.
It is also important to balance the spend so that you don’t over-spend the market-place demand. If the product is deeply discounted, then most available shoppers will convert without any additional shopper marketing spending. This would create redundant spending that reduces ROI. You want to strive to invest in the right balance to create synergies that increase your ROI.
2. Discount less (“price up”) and “spend back” on shopper marketing
Many Foresight ROI clients question the need to discount as deeply for trade promotions as they’re often called upon to do. If increased volume is the goal, deep discounts can help achieve that objective. Deep discounts drive high sales lifts at the expense of profits. They also train shoppers to wait for a price drop to buy. A more profitable move is to discount less deeply (“price up”) and spend less on trade promotion, and then use the money saved to integrate shopper marketing (“spend back”) with messaging that builds brand equity and loyalty — in other words, to create and cater to brand loyalists and inspire sales through means other than pricing. The trade off means giving up some volume for higher profits.
3. Add profit by timing coupon campaigns with trade promotions
Dropping coupons two weeks in advance of a trade promotion is optimal because those first two weeks will see the most redemptions, when the purchased product is still at full price. This reduces “double dipping,” and brands will still capture their most price-sensitive shoppers who will wait for the trade promotion to redeem the coupon. Your sales lift remains high, though you will save on trade expenses from case discounts.
Shorter expiration dates also increase profit. This eliminates subsidizing shoppers who are waiting to buy until they need the product who would have bought without the discount. Our research indicates that coupon incrementality declines the longer shoppers wait to redeem.
4. Reach shoppers all along the path to purchase with both messaging and offers
Integrating marketing communications across the path to purchase is more crucial today than Don E. Schultz might ever have imagined three decades ago. Although multiple tactics cost more, programs that reach shoppers at home and in the store with both an offer and a message average about 37% higher ROI than trade-only programs or trade programs combined with in-store shopper marketing but with no other path-to-purchase touchpoints. Consider the big picture and all available options (or “Full PTP”), as programs with just one pre-store tactic have a below-average ROI.
5. Use scale and partnerships create shopper solutions and share program costs.
Sharing the spotlights (and costs) with other brands or CPGs can make shopper marketing more effective. Scale events promote multiple brands together in a common theme. Partnerships entail teaming up with another CPG company, usually to deliver a shopper solution. For example, picnic food products might be merchandised together in advance of the Fourth of July, or a cheese manufacturer might partner with a chicken company and a tortilla manufacturer to offer a meal solution. Both approaches are time-consuming to develop. To make them worthwhile, make sure they are insights-driven, meet shopper needs, and are communicated all along the path to purchase. Win retailer support for these programs by customizing them by retailer strategy.
These strategies and best practices work well from brands when used together too. This frozen food brand increased price and increased shopper marketing, which doubled the marketing return on investment
To get the most from your shopper marketing investments, develop effective strategies and activate with best practice program designs. Marketing integration is just one of the four strategies that are proven to work.
Be sure to visit Foresight ROI Blogs next Wednesday, August 12th, to catch part four of our special five part series of Shopper Marketing Best Practices where we will feature: Design Programs to Meet Marketing Objectives.
Foresight ROI, the leading provider of shopper marketing ROI measurement, decision support, and software solutions, helps CPG companies and retailers increase their shopper marketing effectiveness. To learn more about our measurement, software, or industry ROI benchmarks, please contact us at Contact@ForesightROI.com