One of the biggest needs that I get from Directors and Commercial Managers of many companies, is how to avoid common mistakes to guarantee a successful promotional activity
The main findings in this matter lead us to the conclusion that the main failures are not in the design per se of the activity (tactics, mechanics, prizes, communication, etc.), but in the first steps of the diagnostic process: from the evaluation of the current situation until the establishment of the promotional objectives.
It all starts with a poor diagnosis
Undoubtedly, the problem begins with a low understanding of what is the opportunity or the problem to be solved. When the objective of the promotion is to achieve sales objectives, counteract competitive actions, and/or do the activity because it is within the budget, we are already in trouble. The lack of an adequate diagnosis leads us to recommend the wrong treatment.
There are several reasons why we fail to understand what is happening:
Non-existence or non-observance of relevant market information related to consumption or purchase habits based on sell-out data or Shopper Behavior.
Little time is available to analyze existing information (market studies, sales statistics, etc.).
Weak analysis of past promotions.
In general terms, we see the Managers responsible for the conceptualization of promotional activities, dedicating a lot of effort and resources to the implementation of the activity, but not enough at the beginning (Analysis) and the end ( Evaluation of results). The promotional activity has not been concluded and results evaluated when the team is already working on the following two.
If you are interested in going deeper into the subject of evaluation, I recommend Mike Antonhy's post “How to evaluate activity to improve Shopper Marketing effectiveness”.
Lack of definition in the Promotional Target
The Brand Target defines the group or segment of consumers with common characteristics, needs, and behaviors that we want to see consuming the brand. For example: Men between 25 and 45 years of middle and upper middle socioeconomic classes who care about their health and personal appearance - fashion brand.
However, when we correctly evaluate the situation of the brand in this large group, we detect that some of them do not know our brand, others know us but have not tried us, others have tried us once, and others buy from us only on promotion, others they are very loyal and others were loyal until they stopped being. In other words, their particular relationship with our brand is different, so the promotional objective and stimulus will have to be coherent and specific to the particular situation of the different subgroups of the Brand's Target to which we should be focusing the activity. This is the Promotional Target.
If we do not define well how and who of these subgroups we want to influence, it will be difficult for us to select the appropriate tactics, mechanics, incentives and promotional communication.
For example, if we want to encourage a group of people who know the brand but have never tried it, we will be selecting activities that are very different from those that would be chosen to retain people from the same brand target who are already loyal. That is why it is so important to talk about the Promotional Target.
Now, once that Promotional Target has been defined, I must then understand it better. Why haven't you tried the brand? What limits them or distances them from the brand? where do they live or what kind of stores do they usually frequent? Do they have particular consumption and purchasing habits?
In short, these and other questions help us select the most appropriate promotional activities to encourage the desired behavior in the promotional target, reduce inefficiencies (cannibalization, advance purchases, etc.), and obtain a higher promotional ROI.
Unclear and specific objectives
The promotional objectives should focus on changes in consumer behavior - the most strategic - and/or purchases we want to influence. Increasing sales volumes or making noise (trust me, I've seen it more than once and in the best families) are not good promotional goals.
Putting 4 or 5 objectives, such as: increasing sales, improving product displays, rewarding our loyal consumers, and improving relations with the channel only shows one thing: we are lost.
It is essential to have a single Primary Objective, which aims to change or reinforce certain purchasing behaviors. If we want to be tested, that should be the primary objective. If what we want is to generate or consolidate loyalty, that must be the primary objective. If what we want is to expand consumption opportunities, that should be the primary objective. In other words, the previously diagnosed opportunity or problem defines the central objective that the promotional activity seeks to solve.
We may have one or two additional objectives that seek to address other areas of opportunity and/or problems. However, if these are reached and not the Primary, we can say that the promotion did not work.
The same solution for all
In the past we tended to do national promotions and if possible in all channels and types of business simultaneously. A greater understanding of the Shopper has led us to greater targeting. However, having to implement a greater number of activities at the same time in different groups of stores in a channel represents an internal operational challenge for companies.
As we explained in the post "What is Shopper Marketing", the Shopper has different expectations, habits, and behaviors depending on the sales channel, such as in a supermarket, a convenience store, or a cafeteria, and the purchase mission. (stocking, restocking, tonight's dinner, etc.) you are doing.
From a promotional point of view, there are promotional tactics and mechanics that work better than others when used in certain channels and for specific buying missions. For example: If a young couple is shopping in a supermarket on a Saturday morning to stock up for the next two weeks (possibly accompanied by a list), their mental state and willingness will be to buy more products at relatively good prices. . This then begins to better define what type of tactic to use. A tactic associated with volume with a good price incentive would be very coherent; extra content, 3x2, Price off, etc.
On the other hand, if the young husband goes to the same supermarket mid-week to buy a ready-to-go Japanese dinner, a cross-promotion with our soy brand (probably a medium or small size to be in line with his willingness to buy). , could generate the test levels we are looking for.
The understanding of the channel-purchase missions relationship, aligned with the particular situation of the Promotional Target, plays a central role in the possibilities of increasing the effectiveness of promotional initiatives.
In conclusion…
To design a successful promotional activity you will have to:
Make an adequate and exhaustive evaluation of the current market situation,
Have a clear understanding of your promotional target audience
Define the best mechanic and incentives to the expected behavior by channel.
Define clear promotional objectives
If you are interested in learning more about this topic, I recommend our Design Effective Promotions Course.
Written by Juan Manuel Domínguez R. CEO of TMC Commercial Consultants. If you are interested in finding out about TMC products in this area, write to us at contacto@tmcconsultores.com
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