Tuesday, 11 December 2012
FMCG marketing is hard isn’t it? As brands you don’t even aim your marketing to the people who buy your products from you – you’re doing the work you might argue you want the retailer to do. In addition, you’re also competing with retailers’ aspirations to become brand owners themselves, with Tesco recently launching its own non-Tesco branded ice cream and pet food.
The indirect path to sales means that traditionally it has been difficult to gauge the success of marketing activity. Because you spend three hundred thousand on a television commercial and your sales are three million, it would be useful to think your ROI was ten to one. But there are so many other factors (and costs) - PoS, real estate, press, sales promotion and so on. Attribution is nigh-on impossible.
In the age of digital, it has been frustrating that Brand Consideration, the old advertising-oriented KPI, has remained the principal yardstick for marketers. Why so disappointing?
Digital provides the ability to track everything in a communication journey - or to be more accurate, it provides the means to track every movement a consumer makes online. So we can see when they clicked on a listing in Google, visited the brand website, opted in to emails, opened, clicked and selected a voucher, redeemed it... it’s what in the finance industry is called “straight-through processing”. It means you can keep custody of a customer all the way through their journey along your online marketing process. In marketing terms this is pure eCRM.
Now, if you’re a retailer the end of this journey is a sale. You can then say with utter confidence “I put in £1, and £26 came out. People with kids are highly responsive, 19 year-olds are a waste of marketing money, so let’s stop spending money acquiring them.” But if you’re an FMCG brand and the grocer is your customer and consumers theirs, to get attribution you need to exercise a bit of creative thinking.
First you need a benchmark. You need a database of your consumers, you don’t need many, ten thousand is plenty. And you need to have some real general population sales data, segmented into meaningful customer groups. You can buy this from Nectar or Dunnhumby. You then need to segment your own customer data exactly the same way so it’s comparable. On day one you look at purchase behaviour in your base versus that in the same segment in the general population. Run your eCRM marketing campaign. Then ask the same people about their behaviour. If the behaviour in your base has changed and that of the population hasn’t, then you have effectively isolated the results of your marketing activity - you actually know what effect you have made on sales.
We’ve successfully done this for a number of major brands. If you could increase footfall by 11% or purchase frequency by 3% imagine how much extra revenue you would be generating. FMCG marketing may be indirect, but with a little creative thinking it sure can be lucrative.