In-store product demonstration is a Swiss Army Knife of retail marketing strategy as it combines attributes of direct selling, advertising, and market research. It is often used to support new product introductions at
brick-and-mortar store locations and can be quite successful in gauging potential demand for this product. However, continuous samplings or demonstrations of the same products in the same stores are well known to increase brand awareness and sales of these products.
How do you measure success?
The success or failure of a CPG brand manager or any other retail marketing professional can be measured with many different key performance indicators (KPI), but invariably it comes to an ability to make budgetary decisions that generate the highest product sales at the lowest cost of customer acquisition (CAC). Nothing delivers these two results more effectively and efficiently than an outstanding customer experience.
According to the seminal book by Herley Manning and Kerry Bodin – “Customer experience is how your customers perceive their interactions with your company”. Therefore, assuming your food or beverage product and packaging are at least as good or better than your competitors, the more customers actually taste or experience your product, the more units of it will likely be sold. In-store product demonstration, sampling, or tasting is a very effective mechanism for maximizing customer interactions. However, the cost of production of meaningful demo campaigns needs to be optimized for the cost of customer acquisition.
Where to cast your net?
Budgetary decisions for where (which store locations), when, how often, and how many marketing events you want to sponsor are very familiar to brand managers with a good understanding of digital marketing.
- Should you choose to sponsor multiple samplings at the store with low traffic, your sales numbers may not justify the expense even if the demographics are perfect as manifested by a very high conversion rate of sample-to-purchase. However, if the price of your product is high enough, and/or the product repeat purchases are frequent enough, the high conversion rate may be more valuable than the traffic volume. In such a case, CAC should be weighed against the Lifetime Value of a Customer (LTV) as measured by Revenue X Gross Margin X Ave # of Repeat
- Should you prefer to demo your products in high-traffic stores the sales numbers may be better per event at the expense of the conversion rate, quality of customer interactions, and the product experience feedback. If your products are lower unit priced and not frequently repurchased by a customer, a high-traffic store might be a better choice. However, you would need really top-notch brand ambassadors capable to engage an individual customer in a high-traffic, crowded “Professional” sample eaters and tire kickers are not easily converted into purchasers. A potential customer in a crowded space needs to be reached out to and engaged in your product discussion that leads to conversion.
Most vendors jostle to schedule their demo events during the weekends or before holidays targeting higher sales numbers. They swim against the current competing for space in the crowded store, attention of the shoppers, and thinly stretched brand ambassador talent. The result is similar to winning a battle, but losing the war as not much is learned about the location’s demographics and its shopping dynamics. Repeated samplings at the same store at the same time means selling to the same shoppers, as people habitually shop on the same days of the week. You are spending money entertaining existing customers instead of acquiring new ones.
The optimal choice may be conducting the first 3 store demos at a location with high traffic on the quieter days or hours.
To paraphrase Rockafeller’s advice for getting rich:
- Get up early every morning
- Work hard all-day
I think my advice would be a little easier to follow for achieving the desired results:
- Think about the length and complexity of every customer interaction in a store
- To engage and experience your product
- To gather feedback about to product experience
- To convert to purchase
- Find, borrow and steal every bit of the data about demographics and traffic of every store
- Collect and analyze data from your own prior demos
- Ask store employees
- Ask local demo agencies. Ask for data, not anecdotes and
- Choose wisely based on what your target priorities
If you do not have a method, tool, or system to collect and analyze data from your in-store sampling campaigns, you will never produce meaningful results consistently. Contrary to a popular belief, retail marketing is a science, not an art form.