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Answers to Your FAQs on Shopper Marketing ROI Measurement

Matt Wheeler, SVP Sales & Marketing

As we look to jumpstart 2019, it’s evident that our industry faces a challenging and rapidly evolving shopper marketing environment.  At Foresight ROI, we seek to stay ahead of these challenges by looking to the future while learning from the past.  We had the distinct pleasure of meeting with dozens of CPGs in 2018, and no mater the size of the company or shopper marketing team, we continued to hear many of the same questions about shopper ROI measurement.  To help our community improve, we’ve captured many of the top questions heard during those CPG visits in this blog and have included our perspective on each.  We hope that you find value in our collective responses.  

 

Our company is new to shopper marketing.  Why is measurement important?

Often referred to as the founder of modern management, Peter Drucker was frequently quoted saying, “you can’t manage what you don’t measure.” In the last few years, shopper marketing has evolved into a very important segment of the overall marketing spending mix.  It now represents 1-2% of revenue for many CPGs.  That investment level is now large enough to receive scrutiny from CFOs and has become an important budget item within most client brand teams.  These stakeholders are demanding accountability, so they know their shopper investments are working as well as other parts of their marketing mix. In fact, according to the newly released 2019 Trends report from Shopper Marketing Magazine, nearly 40% of CPGs surveyed claimed they will be increasing their shopper marketing spend this year.  So, accurate shopper ROI measurement is now more important than ever.

 

We have a measurement program, why should we consider a change?

Many CPGs have some form of shopper measurement in place, but many are unhappy with the measurement tools they’ve selected.  The questions to ask of your measurement program are: 1) does it provide the answers we need to allocate money across brand marketing plan decisions?  2) are we confident that our measurement program is doing a good job reading shopper marketing tactic effects and separating the effects of trade from shopper programs?  3) can we learn what works from our measurement program to support a measure-learn-change process?

 

Our shopper programs are currently measured with a brand marketing mix.  Why should we consider Foresight’s approach?

Foresight has developed special modeling methods that are uniquely designed to accurately read shopper marketing effects.  We find as many as 90% of shopper events are not read by national marketing mix programs.  However, Foresight can accurately read shopper effects because we deploy our models at the retailer level and because we have experience in how shopper programs impact volume between exposure and shopper response.  This helps us better capture incremental volume associated with shopper programs in our model results.  In fact, in 2018, we surpassed a major milestone of 25,000 shopper marketing events measured, which makes our benchmark database the richest set of industry norms available and empowers us to continue developing superior best practices.

 

We haven’t done a great job of collecting data on our shopper events.  How can we consider your measurement offering?

We fully understand the difficulty of collecting shopper execution data.  We have worked with our CPG clients to make the collection of this data easier.  In fact, we’ve even developed Shopper Planner, which is a single, web-based application that delivers critical data and tools to help your entire team plan, execute and measure successful shopper marketing events.  Today, with client approval, we can directly access shopper execution data (whether coupon data, in-store marketing program data or pre-store execution data) directly from top vendors in the industry.  This greatly simplifies that data collection effort.  We’re able to work with smaller suppliers, our clients, and agency partners to acquire the remaining inputs.

 

How can we separate the impact of trade from shopper?

Foresight has developed a modeling approach that is uniquely able to separate trade from shopper impact.  This can be very important in evaluating shopper programs for two reasons.  First, if trade and shopper effects are not evaluated separately, shopper measurement results may be due to trade programs.  Second, we find there is significant synergy between shopper and trade programming.  This can contribute up to 50% of the overall shopper event performance.

 

How do we know what elements of our shopper events drive performance?

Foresight’s models measure incremental volume from each shopper tactic within each event.  That way we can identify how various tactical elements contribute to overall event success.  This is highly beneficial to our clients as they make their decisions on what specific shopper marketing tactics to employ.  Since Foresight measures the results by each tactic, our clients get the results by each tactic, which aligns to the decisions on which tactics to ultimately choose to drive superior ROI.

 

How do your clients use your results to implement a measure-learn-change program?  How much improvement in ROI return should we expect?

Measurement is at the heart of the measure-learn-change process.  Once a client starts learning what works and translates that into planning activities, we see consistent program ROI improvements.  Our clients have been able to show 10-20% year on year improvements in ROI from application of our best practices.

 

How do we know Foresight can execute this engagement?

Foresight senior managers have come from top clients in the industry.  We are familiar with the methods and internal demands placed on suppliers to successfully complete our engagements.  We are consistently rated as a top supplier partner by our clients and we have a winning track record.  In fact, in 2018, we nearly doubled the number of CPGs that now trust us with their shopper marketing ROI management and measurement.

 

Interested in learning more about Foresight’s Shopper Marketing ROI measurement?  Please reach out to our team with your comments and questions at contact@foresightroi.com

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