Standing out to shoppers in store or online is not easy. There’s a lot of competition for shopper attention and so it may seem that executing more shopper and customer activity is the way to keep top of mind.
If we focus on partnering with our customers on fewer, bigger promotional events we stand a better chance of both executing a category growth activity which enhances our brand image and cutting through the shopper clutter to generate a profitable return on investment.
In addition to competing for shopper share, we also compete in our customer for share of voice as a supplier. It is tempting to want to appear ‘innovative’ and ‘active’ by getting in front of our customer with more proposals.
However our customer is motivated by cash and profit. Diluting our investment presents the real risk of more activities with lower returns, which do not positively grow the total category in our customer. We also run the risk of confusing the shopper and diluting our brand image.
We can reduce and optimise our trade spend and generate a higher return on investment by partnering with our customers on fewer, bigger promotional events.
To do this we must know the following:
- what customer major promotional events are planned
- our customer’s annual schedule and timing for these promotional events
- how our customer goes about selecting supplier partners for these major promotional events – for example, do they select one partner per category?
- how we ensure that we obtain an exclusive category agreement to partner with our customer, ahead of our competitors
Our customer management and customer marketing teams should build these major customer promotional events into our own business plans. This must include an understanding of what the calculated likely return on investment will be; compared to regular promotional activity. Sales uplifts should be much higher.
So, if we can partner on major themed customer promotional events (especially those in which our customers are investing in media) to create awareness, excitement and drive shoppers to store, physical and online – we will generate and enjoy higher levels of overall awareness, excitement and shopper purchases for our category and brand than we can achieve with more frequent, smaller promotions.
Are we clear about the category growth drivers for our customer’s shoppers and therefore confident enough to do less, more effectively – for longer lasting category growth, to build brand equity and reduce trade spend?
Next in our ‘Top 10 Tips to Reduce Trade Spend’ series we emphasise the importance of the right promotional tactics to achieve our promotional objectives, to optimise and reduce trade spend. If you have any questions or comments please get in touch.