As seen in                                                                                                                ...
SPECIAL REPORT    Shopper Metrics by Size of Program      Shopper measure-                     Small, single brand        ...
SPECIAL REPORTin shopper behavior over time (beyond thepromotional period), or to shifts in brand at-titudes. These change...
SPECIAL REPORTsively measured programs can serve as tutori-          The biggest campaigns, of course, are most       and ...
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Shopper Marketing Magazine: Best Practices in Shopper Marketing Measurement (Part 1)


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Shopper Marketing Magazine: Best Practices in Shopper Marketing Measurement (Part 1)

  1. 1. As seen in p2pi.orgTAKING MEASURE:Best Practices inShopper MarketingMeasurementUnderwritten by:By Liz Crawford, Senior Industry Analyst Shopper-Centric MeasurementT he following is the first installment in a six-part series examining best prac- Measurement Brand objectives, Retailer objectives, tices for the measurement of shop- buckets: expressed as: expressed as:per marketing. This article looks at effectiveways to rationalize the investment. Subse-quent articles will cover the measurement of Comp-store sales lift,shopper behavior and brand impact, effec- Lift, units/occasion, category sales, cross- 1. Transaction category share, brand category sales, baskettive integration practices, retail collaborationand directions for the future. data loyalty, program ROI size, profitability per square footPART 1: Rationalizing Trip frequency, numberthe Investment List inclusion, dwell time of aisles walked, shopperShopper marketing promises big things. It 2. Shopper increase, consideration, card penetration/promises to fuel brand demand and influ- behavior shopper engagement, participation, shopperence shopper behavior while also selling advocacy engagementmore product in-store. Brand teams like itso much that, according to Shopper Market-ing’s annual Trends Survey, over half plan on Brand equity measures:increasing their shopper marketing budgets. 3. Attitudes and awareness, “Brand Brand equity measures Some of this increased funding will be beliefs for me,” “Wouldsiphoned away from above-the-line efforts. recommend to a friend”Yet, despite the growing enthusiasm forthis approach, most brands still don’t un- Non-shopper A “seat at the table,”derstand exactly what they are getting for Manufacturer-driven returns: business- more facings; increasestheir money. programs that meet the Shopper marketing has been likened to to-business in feature and display retailer’s needsquantum mechanics, the world of infinitesi- relationship impact activity © Copyright 2012. Path to Purchase Institute, Inc., Skokie, Illinois U.S.A.  All rights reserved under both international and Pan-American copyright conventions. No reproduction of any part of this material may be made without the prior written consent of the copyright holder. Any copyright infringement will be prosecuted to the fullest extent of the law. 1
  2. 2. SPECIAL REPORT Shopper Metrics by Size of Program Shopper measure- Small, single brand Mid-sized/regional Large, multi-com- ment buckets: or tactical program program ponent campaign Transaction data Shopper behavior Attitudes and beliefsmally small things. It is like micro-marketing tential solutions in greater depth, Shopper in their quest to measure impact. There seemon a mass scale. On the other hand, tradi- Marketing interviewed dozens of executives to be four major stumbling blocks, recurringtional marketing is like Newtonian physics, across the industry, from retailers to research- across categories and channels.which takes a broader perspective on the ers, agencies to brands. The result is a seriesworld. Given these differences, older research of six articles reporting on best practices in 1. The Measurement Trapmethodologies (especially broad-scale, na- measurement and the direction research may Thirty years ago, promotions were one-offtional ones) don’t capture the entire impact of be heading with advances in technology. events that were fairly simple to measure.smaller-penetration shopper programs. A brand would need to move a certain Furthermore, shopper marketing often de- Key Issues and Hurdles number of cases to pay off an investmentmands a broader, brand-agnostic mindset Shopper marketers are looking to rational- in a defined period. This concept was easythat requires different success measures be- ize investments as budgets shift from above to grasp. The measurement for success wasyond number of cases sold – brand-portfolio to below the line. For most brands, there one-dimensional: sales volume. But if youlift, out-of-store behavior changes, category is a single pot of money for the totality of look at measurement through the shopper-lift and trip frequency, among others – that marketing efforts; it is a zero-sum game at marketing lens, it becomes more complex,traditionally haven’t been part of the ar- the beginning of each planning cycle. But a because shopper marketing is an effort tosenal. That makes comparing the financial portion of the money that used to be spent provide long-term relevance by deliveringreturns of shopper marketing efforts to those gaining impressions through mass media ad- holistic solutions to shopper needs – therebyfrom traditional activity very difficult. vertising is now spent on shopper initiatives. building the brand and changing behavior in Throughout the industry, marketers adopt- The question for many is, “How do I justify the a shopper strategy have been grappling this spend shift?” So what is the “measurement trap”? De-with these questions, “How do I rational- Because shopper marketing is more closely faulting to sales metrics, to the exclusionize my spending, above and below the line? aligned with the purchase than traditional of other measures. Tracey Doucette, seniorWhat am I getting for my investment – media, it stands to reason that measuring its vice president, customer strategy, field andreally? What should be the key metrics across impact should be easy. Or at least easier. But shopper marketing, at PepsiCo, warns, “Itprograms?” this hasn’t been the case. Shopper marketers is tempting to use the metric we can easily To understand these issues and their po- have been stumbling over various obstacles get, rather than measure the ‘real’ objective of the program.” But the best shopper mar- keting programs have objectives that extend well beyond sales into shopper behavior and attitudes. If only sales are measured, the full “ t is tempting to use the metric I yield of shopper programming is obscured. we can easily get, rather than 2. What Are We Measuring Anyway? measure the ‘real’ objective of In an attempt to capture a fuller picture of program performance, other acronym-ed the program.” success measures have emerged, includ- ing: Return on Objectives (ROO), Return on Tracey Doucette, senior vice president, Marketing Objectives (ROMO), and Return customer strategy, field & shopper marketing, PepsiCo on Relationship (ROR), among others. ROO or ROMO usually refers to measuring shifts 2
  3. 3. SPECIAL REPORTin shopper behavior over time (beyond thepromotional period), or to shifts in brand at-titudes. These changes can be determinedquantitatively, albeit at significant cost. The “ hile challenges still exist, WROR is not often a quantitative measure, but aconcept that attempts to capture the positive new measures allow us toimpact of a shopper program on the relation-ship between a manufacturer and a retailer. look at the full spectrum of However significant these achievementsmay be, they can be undervalued or forgot- attitudinal and behavioralten entirely when the unit of success is a dol- shifts – including sales.”lar, and only a dollar. Effective programs seek to change behav-ior well beyond the promotional period, ex- Fred Bidwell, executive chairman, JWT Actionerting a lasting influence on shopper habits.For example, the Kraft iFood Assistant mo- here? And how do we gauge any effect on retailer objectives, such as share of wallet,bile app suggests meal solutions that bundle the manufacturer-retailer relationship? margin growth, category growth, and bas-products to solve a shopper’s “What’s for To add yet another layer of complexity, ket size.” (The task of reconciling objectivesdinner?” dilemma. The app is also geared stakeholders have differing agendas and def- and managing the analytics process with re-to meet business objectives: driving sales for initions of success. Predetermined metrics tail partners will be addressed in article five,Kraft products, and increasing basket ring for need to reflect the objectives of the program, Collaborating with Retailers.)retailers. [Note: While some industry profes- especially when multiple objectives are in play. Collaborating with the retailer on objec-sionals restrict “shopper marketing” to activ- Without exception, everyone interviewed for tives can bring its own rewards. The chart alsoity related to particular store environments this series (agency, researcher, brand and includes a fourth bucket, the program’s im-(either literally or through collaborative out- retailer) asserted that stakeholders need to pact on the brand-retailer relationship. Whileof-store programs), general consensus de- agree on the markers of success, from the this is rarely a “hard” metric, each stakehold-fines it as any activity that pushes a shopper outset, in order for success to be achieved. er hopes to receive some benefit, or return,along the path to purchase, the interpretation Programs are so diverse that it can become in this area as well.that will be used in this series.] The industry challenging to compare one to another inis seeking to understand how these kinds of “apples to apples” fashion. Therefore, it is 3. The Dubious Profitability ofshifts in shopper behavior can be captured imperative to reach internal consensus on Measurementin terms of metrics, and then compared with success metrics prior to program execution. Increasingly sophisticated marketing strate-results from other programs. The chart on page 1 identifies three buck- gies have demanded increasingly sophisti- Shopper marketing can also influence ets of shopper-centric measurement: sales cated metrics. And, for the most part, thesebrand beliefs and attitudes. Think of the posi- transaction data, behaviors, and brand at- are available. From in-aisle video monitoring,tive impact of the pink ribbon on Yoplait’s titudes/beliefs. Manufacturers and retailers to tracking in-store traffic patterns and eyebrand perception, or the halo that Campbell each have goals in these buckets, but they movements, to linking online exposures toSoup’s Labels for Education program gives can differ. Incorporating both sets of goals bricks-and-mortar purchases, shoppers areto participating brands. In addition to driving into programming has become critical to suc- being tracked, tagged, asked and observed.sales, these programs leave lasting impres- cess. Deborah Hannah, shopper marketing Methodologies abound. Why don’t results?sions on brand equity. (This can hold true director at Starbucks Coffee Co., says, “A self- The answer is that funding state-of-the-artfor both the brand and its retail partners.) serving brand goal doesn’t cut it in shopper – metrics tools would wipe out profitability forBut how is the brand equity impact captured the shopper objective needs to incorporate many smaller programs. It doesn’t make too much sense to spend $40,000 to measure a $150,000 program. As a practical matter, then, not all shop- per marketing programs can – or need to “ self-serving brand goal A be – measured to the fullest. According to industry professionals from both sides of the doesn’t cut it in shopper – the table, it seems that best practices are tiers of measurement commensurate with spending. shopper objective needs to That is, the bigger the budget, the more ex- tensive the performance metrics. The size of incorporate retailer objectives.” the program sets the level of expectation for the metrics; this makes sense from a profit- Deborah Hannah, shopper marketing director, ability perspective, because programs effec- Starbucks Coffee Co. tively “buy” their own metrics. Furthermore, the bigger and more exten- 3
  4. 4. SPECIAL REPORTsively measured programs can serve as tutori- The biggest campaigns, of course, are most and the purchase,” says Fred Bidwell, execu-als for the rest of the organization, especially likely to earn the most extensive analysis, which tive chairman of JWT Action. “With shopperwhen these are systematically shared before would include brand attitude measurement. marketing, we have more influence through-the next planning cycle. While most brands examine shopper behavior out the purchase funnel. While challenges still Sticking with the three buckets as a simple (via panel data) and brand equity (attitudinal exist, new measures allow us to look at the fullway of parsing metrics, the scope of the tracking studies) on a national basis, these spectrum of attitudinal and behavioral shifts –program roughly parallels the metrics to be metrics are not usually broken out by retailer including sales.”obtained (see chart on page 2). Virtually all or by program. However, the largest shopper New metrics for success are being discov-programs, even one-off tactical efforts, are marketing programs have the funds required ered as new paths to purchase are beingexamined from a simple lift standpoint using to acquire these data on a one-off basis. explored. The journey may be confoundingsales data. Lift metrics are then compared at times, but the outcome – more effectiveto historical norms and benchmarks for that 4. Human Nature measurement – is worthwhile. category. Nearly without exception, the executives A few larger, forward-leaning manufactur- interviewed for this series were a bit apolo-ers have improved upon simple lift analysis getic about their self-perceived lack of rigorto employ sales data as inputs into custom in measuring performance. Within the walledmarketing mix models. (“Marketing mix mod- gardens of their companies, shopper market-eling” refers to the use of multivariate regres- ers lament the shortcomings of their meth- About the Authorsion and other statistical techniques on sales ods, even when they are relatively to gauge the impact of various marketing These shortcomings seem more acute whentactics.) While nearly all of the larger consumer combined with the sneaking suspicion thatpackaged goods brands run analyses annually, “someone” out there is doing a better job.using national data as inputs, the more pro- It’s human nature to put one’s expectationsgressive brands are using desktop models on a little above reality and adopt the “grass isa brand-by-brand, program-by-program basis. always greener” method of comparison. But Programs with greater scope and spend- psychologist Robert Bringle was probablying may warrant obtaining the next level of right when he described envy as a positivemeasurement: shopper behavior information. motivator that inspires people to work harder.This can come from shopper card data, when It is not surprising that the marketing in-examined longitudinally and across baskets. dustry expects great things from measure-Other kinds of behavioral metrics can come ment today. It has only been about a dozenfrom research specifically set up for the task, years since the smartphone was introduced. Liz Crawford has more than 20 yearsincluding shopping cart trackers, in-aisle Most professionals remember a time before of brand management and consultingvideo monitoring, eye-tracking, virtual store smartphones, a time before cellphones and, experience with a concentration intesting, and others. (Article two will discuss a for some, even a time before color TV. Tech- strategic innovation. Over the lastnumber of these methods.) nology is accelerating our capabilities and our few years, Crawford has focused expectations, too. Marketers now feel a com- on developing integrated shopper pulsion to track every brand interaction with marketing strategies for Fortune 500 Series Schedule every shopper – accurately, cheaply and in real clients. Currently, Crawford is an time. And this seems completely plausible. In analyst and contributing writer for the Part 1: Rationalizing the fact, something similar to this scenario may be Path to Purchase Institute. McGraw- Investment in the offing through new technology. Hill released her book, “The Shopper In the meantime, however, it can be disap- Economy,” in March. Part 2: Measurement of pointing to be confronted with the realities of legacy measurement systems. But is this Shopper Behavior disappointment really warranted? Traditional above-the-line advertising never really de- JWT/OgilvyAction Inc., conducting Part 3: Measurement of Brand business under the OgilvyAction and livered – or even promised – a direct return Impact on investment. While relationships can be JWT Action brands, is a fully integrated, drawn, no metric has ever proved it. Shopper end-to-end shopper marketing and ex- Part 4: Effective Integration marketing is being held to a higher standard. periential marketing agency with main Practices Perhaps this is because new technology now offices in New York, Chicago and Akron, tantalizes with the promise of perfect data. Ohio. It is part of the WPP Group. Part 5: Retail Collaboration “Measurement has always been a challenge. Traditional marketers, especially in brand ad- Part 6: Directions for the vertising, have had to rely on attitudinal shift Future metrics, as there are many other influences that occur between the brand advertisement 4