The biggest expense for CPG manufacturers usually isn’t distribution costs or even slotting fees — it’s promotions. Each time vendors run a promotion, they are expected to pay for coupons and demonstrations, or even risk their bottom line on a price reduction. And yet, despite the expense, the right promotional strategy can dramatically enhance incremental lift. For instance, selling two toothpaste tubes for $5 could move an additional $40,000 worth of products that would’ve been unsold at regular price.
To gauge the efficacy of promotions, manufacturers must conduct a comprehensive post-promotional analysis of each event. The problem is that the vast majority of vendors must complete this process manually. After buying raw data from a syndicated provider, a sales team will need to check every metric by hand — a task that can take hours to complete.
Major brands can address this challenge by hiring more analysts, investing in custom tools, or both, but few small businesses can afford these costs. That’s why post-promotional analysis is one of Bedrock Analytics’ most popular features: We offer easy-to-grasp visualization tools that reveal the most valuable trends. Measuring the incremental lift of promotions by type, event, or even frequency is radically simplified, giving manufacturers more time to focus on improving their products.
Let’s take a closer look at the promotion types available to vendors in 2019…
The vast majority of promotions are based on temporary price reductions. It doesn’t matter whether your discount is based on product bundles — two for the price of one, for example — or simply lowering the price for a week. All analysis within this promotional type is referred to as a TPR for our purposes.
Incremental sales within this promotion type can be tracked using syndicated data. Vendors only need to measure how much sales volume within a given period was based on TPR. If promoted sales volume exceeds non-promoted sales volume, you can safely say it provided a substantial benefit.
Not all promotions are based on price reduction — some are about visibility. These campaigns address display-based promotions that are managed directly by the retailer. These might in the form of shippers or endcap displays. It’s not uncommon for retailers to lump multiple brands together on the same display either: i.e. Chocolate Bars and Marshmallows in July, and Potato Chips and Beer during Superbowl. Getting right in front of consumer’s eyeballs is a great way to drive incremental sales.
Instant redeemable coupons are a more direct variant of standard coupons. These are placed directly on a product — or in some cases, near the product’s shelf location — to reduce the price immediately at checkout. These can be used to immediately generate lift or to move products off the shelf in advance of their expiration date.
Retail chains like Costco and Whole Foods often include in-store demonstrations as part of their shopping experience. This type of promotion is not as common as TPRs or displays, but is a great way to increase consumer awareness. Manufacturers effectively pay an employee, or third party rep, to offer products directly to customers while shopping in store. This can be overlaid with an IRC the rep hands out, or an on going TPR. Sales done during in-store demos are not traditionally tracked as incremental or promoted numbers by you data provider, but you can still track these and other non-price related promotions and their effectiveness using Bedrock’s event calendar.
Unfortunately analyzing syndicated data for insights can be an onerous and time-consuming process that both small and large businesses aren’t always prepared for. Bedrock Analytics offers customizable visualization tools that allow vendors to conduct an analysis in minutes and update results as new data arrives.
Bedrock’s performance capabilities go well beyond basic analysis:
The power of post-promotional analysis is difficult to understate. Its value to sales and marketing teams, however, is invaluable. With Bedrock’s software, your team can visualize scan data, and find answers, faster than ever before.