When your neighbor loses his job—it’s a recession. When you lose your job—it’s a depression. Whatever you call it, big brands want to save money, be more competitive, survive, increase market share and grow in this soft economy.
CPG companies face many challenges.
* Customers are trading down—private label and store brands have spikes in sales.
* Consumers are using more coupons —redemptions grew 10% in Q4 2008, the first jump in redemptions since the early 90’s. Mass merchandise stores saw a15% increase in coupon usage and food stores saw a 20% increase.
* Consumers are buying more of everything on the Internet and using more Internet coupons.
* Consumer confidence is low and customers are postponing many buying decisions.
* Brand loyalty is eroding with more competitors and an overwhelming number of choices and incentives.
It’s time to reassess the business plan with the following:
Simplify the Product Line Focus only on best selling core brands. Discontinue line extensions and reduce SKU’s.
Point-of-Sale It’s the last chance to capture a customer. Utilize your packaging (on-pack and in-pack promotions) to incentivize customers. For example, French’s mustard offered a coupon on SuperPretzel packages during the Super Bowl.
Use Joint Promotions to stretch the budget. For example, a national FSI for $250,000 could be reduced to $125,000 by securing a partner to share the media cost. Eight FSI’s in one year equals $1 million in savings.
Sampling is the fastest way to gain trial. Look to see where you can piggyback or share sampling costs. As an example, a razor brand recently sampled with a shaving cream to cut sampling costs in half. Better targeting and stronger security can assure a strong R.O. I.
Value-conscious consumers are more important than ever. Add value in every way possible to incentivize customers. Bonus quantities and bundles can all lead to more sales.
Reward Your Loyal Customers not all customers are alike. Every brand needs new customers plus a loyal base of established customers. Identify and reward loyal users as an ongoing standard operating procedure.
Convenience Still Rules Getting your coupons to the right target audience in an easy to use format is the future of couponing. You can now get grocery coupons on iPhones and on mobile phones. Internet coupons can be tested with different price points, geography and even capped to limit liability. Commit to new technology for coupon delivery.
Encourage Repeat, Referral and Word-of-Mouth Marketing Listening and talking to your customers can be an invaluable asset in spreading goodwill and developing the “buzz” about your brand. Be proactive with customer service to engage and reward customers. You can turn them into brand ambassadors. Get turned on to business blogging.
Turn Your Web Site Into a “Go To” Destination With more consumers online and younger customers not consuming traditional newspapers and magazines, you need to make your Web site more fun and more valuable.
80/20 Rules Still Apply Eighty-percent of your business comes from the top 20% of heavy users. Focusing efforts and rewards against this heavy user group can reap huge rewards. Nurture these customers, listen to them and reward them—they are your VIP’S.
This is the time to stop, look and listen to your customers. Synergy is possible. Savings are possible. Growth is possible in this crazy economy. Never waste a good crisis.
Art Averbook is president of Co-Op Promotions, a 21-year-old national sales promotion company specializing in tie-ins, value-added and sampling promotions. Averbook is also co-author of the book “All About Sampling.” He can be reached at [email protected].
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