Align, Aim, Perform and Grow with Shopper Marketing
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Shopper marketers are under more scrutiny than ever to accurately forecast and assess ROI. Foresight ROI is proud to have analyzed over 18,000 shopper marketing events to help Clorox and other leading CPGs: • Decide levels of investment across demand creation programs • Better understand shopper marketing impact across the portfolio • Gain visibility to which plan elements are “working harder” than others Learn more in this presentation by Rick Abens, Founder and CEO at Foresight ROI, and David Cardona, Director, Shopper Marketing, Category Advisory & Multi-Cultural Capabilities at the Clorox Company, delivered at the Path to Purchase Expo in Rosemont, IL on September 22, 2016. To learn more contact us at www.foresightroi.com or call us directly at 312-575-0024.
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Align, Aim, Perform and Grow with Shopper Marketing
- 1. Align, Aim, Perform and Grow with Shopper Marketing P2PX September 22nd, 2016 The Clorox Approach
- 3. Whosoever desires constant success must change his conduct with the times. – Niccolo Machiavelli
- 4. FORESIGHT
- 5. Bigger budgets mean more scrutiny Bigger Budgets Increased Scrutiny Shopper Digital Traditional Media Trade Spending Growth Rate Source: Deloitte
- 6. Most feel they Don’t Accurately Measure Shopper Marketing ROI 2015 Annual Trend Report Measurement confusion Measure ROI Don’t Accurately Measure 63%
- 7. Measure ROI Don’t Accurately Measure 2015 Annual Trend Report Measurement confusion to top performer 93% 17% Top Performing Poor Performers % That Measure SM Hub Magazine, 2014 The Top Shopper Marketers Measure Shopper Marketing ROI Marketing that Works Optimize Budgets Justify Bigger Budgets 38%
- 8. Baseball Actions-to-Wins Metrics ROI Market Reach Sales Impact P&L Impact Marketing Action Player Salaries Stats Runs Wins
- 10. Connect Actions to Profit with Analytics Cost Rate Lift Rate ROI Market Reach Sales Impact P&L Impact Marketing Action
- 11. Measure What Matters In investing, just like baseball, to put runs on the scoreboard, one must watch the playing field, not the Scoreboard Warren Buffet
- 12. Measurement Standards • Accurate to prove Shopper Marketing works and to improve it – Untangle Shopper Marketing and Trade effects – Measure Shopper Marketing synergy with Trade • Comparable to other marketing ROI measurements Other MMAS Sales Contribution Other MMAS Trade Shopper-Trade Synergy Shopper Tactics Coupons Media Base 14% 0% 1% 5% 8% 72% 11% 2% 3% 5% 7% 71%
- 13. Collaborative Planning Tools To Win With Your Customers Brand & Retailer Win Retailer Win Brand WinOpportunity Events Negotiate Price Change Tactics Brand ROI CategoryGrowth HighLow Pre-store Tactics Drive Category Growth Retailer Support Drives Brand ROI Collaborate to Win
- 14. Steps toward measurement mastery Rough estimate of the program as a whole Easy to do SM impact is under counted Data is difficult to collect 1-time data collection job Comparable measurement Learn What Works Capture data real time Planning with deep & broad knowledge Simulations to create the best programs Best practices knowledge Bigger budgets, sales impact and customer relationships Bump Charts Marketing Mix Models Shopper Marketing Model Continuous Improvement
- 17. Strengthenthe Discipline overall Shopper Marketing Our Objectives
- 18. articulatethe Shopper Marketing brings to the organization Need to value Our Objectives
- 19. differencesin our classes of trade Really understand diverse andportfolio the Our Objectives
- 21. Our Challenges No standard approach to measuring Shopper Marketing dollars spent at the field level A lot of personal bias regarding tactics Complacency: need to constantly challenge our thinking Work with Clorox internally to align with metrics as “valid”
- 22. Advanced Analyticsteam market Join forces to identify options in the with our Solution
- 23. to Go FastGo slow,
- 24. • Identified 6 key customers • Picked 2 Clorox categories Scoping The Work (Pilot)
- 25. Collected all the data from FY14 and forwarded to Foresight ROI to run models Our Methodology Benchmarked $150K+ for activity 5-6 weeks for Foresight to run analytic models It took a long time to gather information! Data turned over to Advanced Analytics for interpretation
- 26. Go slow, to Go Fast! Go slow, to Go Fast
- 28. What did we learn?
- 29. Validation for what we knew Leverage seasonality Don’t layer “dollars off” tactics Experiment more on targeted tactics When choosing between a lower ROI tactic and trying something new— try something new! Partnerships yield a much better ROI Tell a cohesive story along the P2P
- 30. The power behind partnerships
- 31. PineSol Hispanic Campaign Loyalty Customer Mailer Experiment more on targeted tactics
- 32. In-store large size signage to drive awareness partnership Strong display integration Feature Ad .com Direct Mail Cohesive story across the P2P
- 33. • New Items • Digital Shopper Marketing • Couponing Digging Deeper for Other “A-ha’s”
- 34. 1. Efficiency rates for new items are typically lower than for Base events 2. Industry shopper spend in support of new items averages 16% of total shopper spend 3. Leverage Base products to drive conversion of new items 4. An offer is key 5. Apply P2P approach, skew heavily to in-store New Items Learnings
- 35. 1. Coupons work harder at Mass and Grocery, while messages have higher returns at Grocery and Dollar 2. Despite the higher costs, coupons earn higher-than- average ROI’s 3. Instant offers and solution books are the highest-returning coupon tactics. Coupon Learnings
- 36. Digital Shopper Marketing Learnings The percent of Shopper spend on digital is at 33% in the industry 1. Industry-wide Events with Digital have better ROI +47% ► Lower costs and have the opportunity for precision targeting ► More likely to be well integrated full PTP events 2. Clorox benchmarked below industry on digital ROI ► Learned specific actions to close the gap
- 37. The information shaped our strategy and tactical plans, going from awful to terrific! - Team Lead Strategic Grocery Positive Reception
- 38. Why is this so important for us? Let me start by defining Us = Marketing (Brand and MarComm) Finance Shopper Team Sales (Both Planning And Field Sales) Customers
- 39. Helped us to better decide level of investment across demand creation Helped us better understand shopper marketing impact across our portfolio Gave us visibility to the plan elements that are “working harder” for us Why is this so important for us? SPENDSPRING CLEANING ROI K/O/D RATIONALE Tatic 1 Tatic 2 Tatic 3 $X.XX $X.XX $X.XX High Low - Avg Low Keep: Rationale here Optimize: Rationale Here Delete: Rationale Here 1 2 3
- 40. Why is this so important for us? Helped us to better decide level of investment across demand creation Helped us better understand shopper marketing impact across our portfolio Strengthened our relationship with the shopper agencies as we progress our capability together Gave us visibility to the plan elements that are “working harder” for us
- 41. Identify the specific measurement challenge for your organization Audience Takeaways Consider key internal stakeholders you need to collaborate with Realize the resources needed to execute an ROI workstream of this magnitude 1 2 3
- 43. Thank you
Hinweis der Redaktion
- I am going to talk to you today about ROI and how Clorox identified several challenges and how we sought to understand, really understand, the effectiveness of what we were doing in Shopper Marketing.
- I want to inspire you to undertake your own measurement workstream by giving you a look at what and how we measured. It can add tremendous value to your organization and give you the ability to offer clean reads on how to best spend your Shopper Marketing dollars.
- I love this quote by Machiavelli, “Whosoever desires constant success must change his conduct with the times.” I like it because the landscape of Shopper Marketing has dramatically changed in the past 5 years with technology influencing how shoppers shop and make their choices. We realized that we, as a Shopper Marketing organization at Clorox, needed to change our conduct with the times and really understand how our marketing has evolved in order to drive better results moving forward
- The challenges David mentioned are prevalent across the industry. As shopper marketing budgets increase, there is more scrutiny on it. So it must get vetted to justify the spend just like other disciplines before it. A trend that exacerbates this is zero based budgeting. Its always been true that what gets measured gets managed. Now what gets measured gets funded. One GM told me at the beginning of the study, “I know what I am getting from advertising and I know what I am getting from trade, but I don’t know what I am getting from Shopper Marketing and I must cut something.” So he cut SM, then we measured it and he reinstated the funding for SM.
- And yet, measurement confusion continues. According to the 2015 Annual Trend Report conducted by the Path to Purchase Institute, 62% of those surveyed claim they do not or don’t accurately measure SM ROI. This is partly due to the fact that there isn’t an industry standard of measurement for the discipline. A specialize discipline that works holistically with other marketing mix investments requires a different way to measure, but in a way that is comparable to other marketing mix investments. This is important because, according to a Hub Magazine survey, 93% of the top performing companies ranked in Hub are measure SM performance. Only 17% of the poor performers are measuring. Now, measurement alone doesn’t guarantee top performance, but it certainly gives you a better opportunity to win while increasing collaboration and accountability across all key stakeholders.
- And yet, measurement confusion continues. According to the 2015 Annual Trend Report conducted by the Path to Purchase Institute, 62% of those surveyed claim they do not or don’t accurately measure SM ROI. This is partly due to the fact that there isn’t an industry standard of measurement for the discipline. A specialize discipline that works holistically with other marketing mix investments requires a different way to measure, but in a way that is comparable to other marketing mix investments. This is important because, according to a Hub Magazine survey, 93% of the top performing companies ranked in Hub are measure SM performance. Only 17% of the poor performers are measuring. Now, measurement alone doesn’t guarantee top performance, but it certainly gives you a better opportunity to win while increasing collaboration and accountability across all key stakeholders.
- You can get a better ROI either by getting a higher lift or a lower cost on the marketing. By looking at both of these metrics you can better assess and forecast ROI. When you are trying to forecast the sales lift and ROI for a program and choosing tactics, you usually know or can guess at the cost of the marketing reach. Then use a sales lift model to forecast the sales lift and resulting ROI. The charts represent industry averages for marketing cost, lift rate and ROI for different scenarios. In-store marketing has a relatively high cost rate (cost per 1000 impressions), though at $3.30, it is substantially below the TV rate of about $25. Adding a pre-store message lowers the marketing reach cost rate substantially because you can reach millions of shoppers at a low cost. The average lift rate is diluted down because the pre-store tactics are not as engaging so the average lift goes down. However, because the cost rate went down more than the lift rate, the ROI increased. To really make the event work well, adding a pre-store offer to the program completes the PTP strategy and increases conversion substantially, driving the best ROI.
- You can get a better ROI either by getting a higher lift or a lower cost on the marketing. By looking at both of these metrics you can better assess and forecast ROI. When you are trying to forecast the sales lift and ROI for a program and choosing tactics, you usually know or can guess at the cost of the marketing reach. Then use a sales lift model to forecast the sales lift and resulting ROI. The charts represent industry averages for marketing cost, lift rate and ROI for different scenarios. In-store marketing has a relatively high cost rate (cost per 1000 impressions), though at $3.30, it is substantially below the TV rate of about $25. Adding a pre-store message lowers the marketing reach cost rate substantially because you can reach millions of shoppers at a low cost. The average lift rate is diluted down because the pre-store tactics are not as engaging so the average lift goes down. However, because the cost rate went down more than the lift rate, the ROI increased. To really make the event work well, adding a pre-store offer to the program completes the PTP strategy and increases conversion substantially, driving the best ROI.
- You can get a better ROI either by getting a higher lift or a lower cost on the marketing. By looking at both of these metrics you can better assess and forecast ROI. When you are trying to forecast the sales lift and ROI for a program and choosing tactics, you usually know or can guess at the cost of the marketing reach. Then use a sales lift model to forecast the sales lift and resulting ROI. The charts represent industry averages for marketing cost, lift rate and ROI for different scenarios. In-store marketing has a relatively high cost rate (cost per 1000 impressions), though at $3.30, it is substantially below the TV rate of about $25. Adding a pre-store message lowers the marketing reach cost rate substantially because you can reach millions of shoppers at a low cost. The average lift rate is diluted down because the pre-store tactics are not as engaging so the average lift goes down. However, because the cost rate went down more than the lift rate, the ROI increased. To really make the event work well, adding a pre-store offer to the program completes the PTP strategy and increases conversion substantially, driving the best ROI.
- You can get a better ROI either by getting a higher lift or a lower cost on the marketing. By looking at both of these metrics you can better assess and forecast ROI. When you are trying to forecast the sales lift and ROI for a program and choosing tactics, you usually know or can guess at the cost of the marketing reach. Then use a sales lift model to forecast the sales lift and resulting ROI. The charts represent industry averages for marketing cost, lift rate and ROI for different scenarios. In-store marketing has a relatively high cost rate (cost per 1000 impressions), though at $3.30, it is substantially below the TV rate of about $25. Adding a pre-store message lowers the marketing reach cost rate substantially because you can reach millions of shoppers at a low cost. The average lift rate is diluted down because the pre-store tactics are not as engaging so the average lift goes down. However, because the cost rate went down more than the lift rate, the ROI increased. To really make the event work well, adding a pre-store offer to the program completes the PTP strategy and increases conversion substantially, driving the best ROI.
- To increase your SM spending budget or event to keep it, you must justify the spend. This requires an accurate ROI measurement that captures the full impact of SM, including the impact of more and better merchandising when SM is integrated with trade. One thing I found to be true is that the budget goes where the ROI shows. The second big reason to measure is so that the budget gets allocated so that you optimize the results. If you know which customers have the best return, you may invest more with them. This knowledge is powerful, because on the average, if you move one dollar from a poor performing customer to a good performer, you can increase your profit from 50 cents to $1 without any additional spending. Lastly, you want to measure to manage well. By knowing what works, you can create the best marketing programs, while building corporate knowledge. Our clients also use the program measurement in JBP with their customers by examining both parties key performance metrics.
- To increase your SM spending budget or event to keep it, you must justify the spend. This requires an accurate ROI measurement that captures the full impact of SM, including the impact of more and better merchandising when SM is integrated with trade. One thing I found to be true is that the budget goes where the ROI shows. The second big reason to measure is so that the budget gets allocated so that you optimize the results. If you know which customers have the best return, you may invest more with them. This knowledge is powerful, because on the average, if you move one dollar from a poor performing customer to a good performer, you can increase your profit from 50 cents to $1 without any additional spending. Lastly, you want to measure to manage well. By knowing what works, you can create the best marketing programs, while building corporate knowledge. Our clients also use the program measurement in JBP with their customers by examining both parties key performance metrics.
- When I initiated this workstream, I thought about the objectives I wanted to meet. The first one is that I wanted to strengthen the Shopper Marketing discipline overall for Clorox. I felt that there was not a standard of consistency across the various field teams relative to how we evaluate our plans and then use those learnings to plan. I also felt pressure to articulate the value of what Shopper Marketing can bring to the organization overall. There are so many ways to spend marketing dollars and a big chunk goes to Shopper Marketing. I wanted to demonstrate that it is worth the money! And lastly, I wanted to really understand the differences in our diverse portfolio and classes of trade. Most of you know that Clorox plays in very very disparate categories from food to home care to laundry to outdoor living and even home hardware with Brita. The learnings are very different by category and class of trade.
- When I initiated this workstream, I thought about the objectives I wanted to meet. The first one is that I wanted to strengthen the Shopper Marketing discipline overall for Clorox. I felt that there was not a standard of consistency across the various field teams relative to how we evaluate our plans and then use those learnings to plan. I also felt pressure to articulate the value of what Shopper Marketing can bring to the organization overall. There are so many ways to spend marketing dollars and a big chunk goes to Shopper Marketing. I wanted to demonstrate that it is worth the money! And lastly, I wanted to really understand the differences in our diverse portfolio and classes of trade. Most of you know that Clorox plays in very very disparate categories from food to home care to laundry to outdoor living and even home hardware with Brita. The learnings are very different by category and class of trade.
- When I initiated this workstream, I thought about the objectives I wanted to meet. The first one is that I wanted to strengthen the Shopper Marketing discipline overall for Clorox. I felt that there was not a standard of consistency across the various field teams relative to how we evaluate our plans and then use those learnings to plan. I also felt pressure to articulate the value of what Shopper Marketing can bring to the organization overall. There are so many ways to spend marketing dollars and a big chunk goes to Shopper Marketing. I wanted to demonstrate that it is worth the money! And lastly, I wanted to really understand the differences in our diverse portfolio and classes of trade. Most of you know that Clorox plays in very very disparate categories from food to home care to laundry to outdoor living and even home hardware with Brita. The learnings are very different by category and class of trade.
- Just as a quick refresher….
- Once I had a sense of the objectives, I started to dig in to the hurdles we faced. The most obvious hurdle is that we did not have a standard approach to measuring Shopper dollars spent at the field level. We’ve played with it over the years, but there was not a data-driven approach that everyone was using. I also noticed that a lot of personal bias regarding tactical plans was at play. So, I would hear things like, “I tried that tactic 2 years ago and I don’t think it performed that well.” The truth is that the landscape has shifted dramatically and many vendors have newer capabilities that make their activation more effective. I also wanted to combat complacency. We need to constantly challenge our thinking. And lastly, I knew that if I didn’t work with key stakeholders internally at Clorox, that whatever I did ran the risk of not being validated. I needed to think about my internal partners necessary to validate whatever metrics we employed.
- We chose to partner with Foresight ROI because: Our advanced analytics group had a previous positive experience with Foresight ROI and having their alignment on the partner was critical to validating the results We needed a partner that could develop a model that was similar to how we evaluated trade and advertising in order to compare apples to apples
- We identified 2 Mass, 3 Grocery, 1 Dollar based on our segmentation and also whether there is data from those customers for us to do the modeling. We picked HVR and Glad—these are “Grow” categories for our portfolio.
- We were pulling FY14 data in FY15 and there had been so much turnover in the team that some data was available and some wasn’t. So it took about 12 weeks to get all the data. So, to simplify we looked for big ticket activity which is $150K or bigger…we were not interested in smaller tactics given the situation—be more pragmatic.
- Use icon and a few words to tell story here (i.e. a storybook with the words Tell Cohesive Story)
- which in general deliver above-average efficiency.
- We also wanted to dig a little deeper to understand specific learnings around three critical efforts: New Items, Digital Shopper Marketing and Couponing. Our goal was to understand the best practices in these three areas to provide guidance for our field Shopper Marketing folks.
- We shared the results broadly—with field Shopper Marketing, Sales Planning, Field Customer Teams, our agencies and with the National Shopper Marketing Group. It has been SO well received by everyone! The benefits we are seeing are: It is informing the planning cycles going into FY17 Everyone is feeling smarter We are strengthening the perception of Shopper Marketing internally as a solution to business challenges Using data to reshape tactical plans
- We shared the results broadly—with field Shopper Marketing, Sales Planning, Field Customer Teams, our agencies and with the National Shopper Marketing Group. It has been SO well received by everyone! The benefits we are seeing are: It is informing the planning cycles going into FY17 Everyone is feeling smarter We are strengthening the perception of Shopper Marketing internally as a solution to business challenges Using data to reshape tactical plans Let me start by defining Us = Marketing (Brand and MarComm) and Sales (both Planning and Field Sales) Finance Customers Shopper Team
- We shared the results broadly—with field Shopper Marketing, Sales Planning, Field Customer Teams, our agencies and with the National Shopper Marketing Group. It has been SO well received by everyone! The benefits we are seeing are: It is informing the planning cycles going into FY17 Everyone is feeling smarter We are strengthening the perception of Shopper Marketing internally as a solution to business challenges Using data to reshape tactical plans
- We shared the results broadly—with field Shopper Marketing, Sales Planning, Field Customer Teams, our agencies and with the National Shopper Marketing Group. It has been SO well received by everyone! The benefits we are seeing are: It is informing the planning cycles going into FY17 Everyone is feeling smarter We are strengthening the perception of Shopper Marketing internally as a solution to business challenges Using data to reshape tactical plans