the role of facts in marketing
DESCRIPTION
Colin Harper, the Head of Insight for the IPM explains the huge gap between what shoppers actually do, vs what marketers think they do. In the headlong rush for the new, integration with existing techniques can be lost, and a focus on what can be achieved by ensuring that one incentive works as hard as possible, goes at the same time. Colin suggests that working across barriers as the IPA also suggest gets by far the best result, and flagged areas already under test, as well as those to come.TRANSCRIPT
Spot the WMDs in your organisation
Donald Rumsfeld• There are known knowns; there are things we
know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns -- the ones we don't know we don't know– Intelligence reports -- now shown to have been false
-- that Iraq possessed WMDs were the main reason for going in (Rumsfeld February 20, 2011 CNN)
• Cost of War to the US - $816,543,398,098• Cost of war to UK - £9,240,000000
Colin Harper 2011
• There are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns -- the ones we don't know we don't know. Lastly, there are things we think we know, that are actually untrue
“Facts” can have quite a hold
• “John Frum” appeared in 1936 in Tanna, Vanuatu in the South Pacific Ocean and predicted the arrival of cargo by plane for them – Cargo Cultists built planes and runways to
welcome this
• John Frum today is both a religion and a political party
Boeing won’t be worried though
The arrival of US forces in WWIIwas the "First Coming" for them and
they now await the second
In 2011 the cultists say that Christians have been waiting 2,000 years
for the second coming and for them a mere 70.
A single misused “fact” can waste an enormous amount of time and resource• Before you laugh consider for a moment
whether you are actually in possession of all the facts yourselves
• When you start to consider techniques to use have you sub-consciously already ruled some out since you “know” they don’t work
• Or use others since you believe that they do – without benefit of evidence
New Platforms for Growth
Based on re-visited “facts”
Building on the last white paper
In Place of Sales Driven Discounts there are Collaborative Promotions as
a platform for fmcg growth
Brand MarketersBuilding Long Term Brand Growth
Margin and Value Growth is very important
Brand Sales TeamsMaking the Sales
Volume Target this year using retailer
tools
RetailersMeeting their sales targets
from brand spend(retaining their own margins)
£14.2 Billion Store Marketing
£14.2 Billion Shopper Marketing
Mutual objectives
• Brand Marketing long term growth sharing budget from sales……
• Sales need to develop sales this financial year delivering…..
• Retailer growth down the aisle and increased store traffic
• Based on greater shopper engagement
40% of people had next to no impact from price discounts - you said 12%
What percentage of the product in your average weekly shop would be prompted by buying at a discounted price
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
0-10% 11-20% 21-30% 31-40% 41-50% 51-60% 61-70% 71-80% 81-90% 91-100%
Price Marketers Price
Discounts Mode at 11-20%
Source: IPM fast.MAP Marketing Gap
Nearly 60% of people had next to no impact from promotions you said 18%
What percentage of the product in your average weekly shop would be prompted by some other kind of promotion offer such as a coupon from any source, on pack offer,
loyalty scheme?
0%
10%
20%
30%
40%
50%
60%
0-10% 11-20% 21-30% 31-40% 41-50% 51-60% 61-70% 71-80% 81-90% 91-100%
Promotions Marketers Promotions
You thought more people used promotions than
discounts - Mode at 20-30%
Source: IPM fast.MAP Marketing Gap
Marketers are way out• There are 50% more light/non-users of
promotions than there are of discounts– Promotion reach outside of this is very similar for
promotions and discount– But for different people
• There is much more scope for promotions than you think – They typically cost less in incentive terms than
discounts and seem to be more effective– Promotion incentives reward actions – discounts
reward everyone for simply being there
Promotion types most usedHow often have you used these kinds of promotions in the last 12 months?
0% 10% 20% 30% 40% 50% 60% 70%
Price discounts
Prize Promotions
Rew ard or Loyalty schemes
Gift w ith purchase or enquiry
Free Prize Draw s
Sampling
Events that you attend
Printing a coupon from the internet
A printed coupon addressed to you
A printed coupon dropped through your door
A printed coupon from elsew here
A coupon w ebsite such as CouponStar, Groupon
A coupon from a pack
None of the above
Male Female
Coupon from pack
Coupon from
other sources
PriceDiscounts
Source: IPM fast.MAP Marketing Gap
Current Research Approaches – 3 Brands
• On pack “Pick me up” sticker has similar impact to price discounting– 8% redemption
• Switches on the supply chain and store staff in advance of couponing
One promotion can trigger much more than one discount
• Couponing– 34% of people search their mail for coupons
or offers – marketers expected only 12%– 38% of people open and read a letter if they
even think there is a coupon there– 44% of people have used a coupon in the last
12 months – marketers said 13%– Over 70% of Morrisons store managers said
they were increasing their stock on display because a coupon distribution impacting their store was due to arrive*
*IPM/TNT 2011
• Delivered to the catchment area of stores that are stocking, where the managers have been advised and actively support
Why are stores important? Do you ever attempt to redeem coupons when you have not bought the products specified on
them?
0%
10%
20%
30%
40%
50%
60%
70%
80%
Never Occasionally Regularly
Male Female Marketers
Most people are honest
Source: IPM fast.MAP Marketing Gap
But stores don’t deliver for shoppers!
What was the reason for the attempted mis-use of the coupons?
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
My local store did not stockthe product
My local store was out ofstock of the product
I preferred an alternative andthe store allowed it
I preferred an alternative butthe store did not allow
Male Female Marketers
88% of mis-redemption instances
caused by lack of product
Source: IPM fast.MAP Marketing Gap
New listing in this store selling at 50% rate of leading company product
Out of stock 7 days later
Matched area testing
• Trial Results available November/December 2011
• Webinars and small discussion groups (Think Tanks) available from then
Picking the right incentive
• There is nothing wrong with using money the trick lies in the presentation of the benefit…
• Scrappage Scheme rather than Discount
• But get the correct value • The average value according to Valassis is
currently (2010) 93p• People either respond to coupons, or they don’t*
– 20p coupon 38% 50p coupon 42% £1 coupon 54% £5 coupon 55%*
*Source: IPM fast.MAP Marketing Gap
Incentives choice is separate from media choice and additive
• The right incentive can drive a number of actions down a chain– Provided, of course, they know it is coming their way
• The IPA say that “Advertising coupled with a sales conversion channel such as sales promotion or direct marketing is the most effective combination to drive hard business success.
• Posters are advertising and JC Decaux already know it works with price discounts…….
0
2
4
6
8
10
12
14
16
18
20
1 to 4 1 2 3 4 5 6
Week
% S
ale
s U
plif
t
Branding
NORMATIVE DATA
15%
7%
CREATIVES SHOWING A BRANDING MESSAGE
Pre During Post
02468
101214161820222426283032
1 to 4 1 2 3 4 5 6
Week
% S
ale
s U
plif
t
Price Promo
18%15%
NORMATIVE DATA
CREATIVES SHOWING A PRICE PROMOTION MESSAGE
Pre During Post
Incentive + message = engagement
• IPM working with iMotions to measure the emotional impact of an added incentive to a communication– DM and Promotion, it makes no difference it is
the engagement with the message that matters
• Reviewing alternative incentives to money
Be cautious about your choice of promotion media
Q34. Where do you get to hear about or receive different types of promotions (including discounts)? Tick any that apply.
0% 10% 20% 30% 40% 50% 60% 70%
Friends I talk toTV advertising
New spaper advert / magazine advertInserts in magazines
Offers on Products that I buy E-Mails to me
Web advertising that I click onOffers to my mobile phone
Direct mail (addressed post)Leaflets through the post
Web sites that I useSocial Media such as facebook
Events that I attend In the store
None of the above
Male Female Marketers
Source: IPM fast.MAP Marketing Gap
You badly over-estimate Social media
But get e-mails right!
Ultimate E-Mail Targeting• E-mail lists (2 million) of active profiled
promotion/samplers redeemers– Hive
• Knowing their first and second preference stores for grocery, DIY, Health and Beauty – Presents an opportunity for brands to grow a retailers
business– Alongside retail media such as posters
• Identifying the best way to contact retail stores and managers– Including e-mail lists
• Are you interested in being kept abreast of “In Place of Price” to be extended outside of fmcg?
• Are you interested in being kept abreast of iMotions emotions tracking to identify key elements of a promotions message on a communication?
• Are you interested in being kept up to data with Ultimate E-mail Targeting results and profiling
Moving On
Promotions as core, not peripheral
What holds brands back from using promotional techniques more?
.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0%
Concern over cost
Organisation hasother priorities
Concern overeffectiveness
No concern
Source: IPM fast.MAP UK Marketing in Action Study 2011
Costs can be addressed
• Working with fixed fee companies– Costs for activities can be both predicted, and
a fixed cost applied– Are you aware of this – and are you interested
Platforms for Growth
Based on what you told us you wanted to know about
Defining the total market• Coming early 2012
– Size of the Total Promotions Market• Market Dynamics• Market Concerns
• Under discussion for late 2012– The Promotions Hand Book
• Market Sizing• Impact of techniques updates• Usage of techniques in the last 12 months• Spend• Legal latest
Loyalty
The most important category marketers wanted to know about
Is Loyalty Important?Loyalty vs Performance
-600.0000
-500.0000
-400.0000
-300.0000
-200.0000
-100.0000
0.0000
100.0000
200.0000
300.0000
400.0000
500.0000
-15.0000
-10.0000
-5.0000
0.0000
5.0000
10.0000
15.0000
20.0000
Performance Money Linear (Money) Linear (Performance)
IPM fast.MAP UK Retailer Loyalty Study
What does this mean?
• Retailer loyalty schemes appear to make big difference to their performance
• Is this because they are focused away from their core customer needs – driving high churn– Retail Week research 2011
What better looks like
Source: IPM fast.MAP UK Retailer Loyalty Study
40% use loyalty schemes to buy more
In the last 12 months have you bought more products than you planned because of extra longer term rewards from the product/service such as these?
0% 10% 20% 30% 40% 50% 60% 70%
Club cards (e.g. Tesco, Nectar,Boots, Costa Coffee)
Token collecting offers on card (e.g.McDonalds,)
Web sites w here you can collectgoods or services (e.g. Coinks, Coke,
Tropicana)
New spaper collectable/series offers(e.g.Sun Holidays,Daily Mirror Lego, )
Other posted collectable/seriesoffers
None of the above
Male Female
Source: IPM fast.MAP Marketing Gap
Waiting for SponsorsOn Line Couponing – The
Undiscovered Country
The second most important area marketers wanted to know about
Events – working with the BCSC
The third most important area marketers want to know about
The Source of Trial
Q32. In the last 12 months have you bought a product for the first time because you had trialled it free first?
0% 10% 20% 30% 40% 50% 60% 70%
At a friends /relative/colleague
Street, shopping centre or open area
In and around Store
An event
Postal Sample
Sample you asked for from a web site
None of the above
Male Female
Source: IPM fast.MAP UK Marketing in Action Study 2011
The Trés Belle creative ran on 6 sheets in both test malls and in both high streets in June 2008.
Trés Belle: irresistible, inspirational and unavailable
Comparing advertising: prompted ad recall
Mall shoppers were significantly more likely to be able to recall seeing posters that they had passed during their shopping trip than those interviewed outside.
Ad recall in malls was almost
3 times greater than the high street.
12%
Source: DipsticksBase: 530 shoppers
Pro
mp
ted
ad
vert
isin
g r
eca
ll 30%
Summary: Power of 3
Compared with consumers outside shoppers in the mall…
- Are 3 times more likely to buy
- Are 3 times as likely to be positively
aroused
- Are 3 times as likely to recall targeted
advertising
Are events better when you have a better environment?
• Would you find a Promotions Handbook useful in your job/for your company
• Are you interested in being kept abreast of Loyalty – Building from a Firm Base
• Are you interested in being kept in touch with Events as a Driver to Growth
Remove the Weapons of Marketing Destruction from your
organisationWorking with IPM Insights