Traditional Trade Promotion Management (TPM) systems are the gold standard for tracking and optimizing the billions spent on trade promotions each year, but how do shopper marketing programs fit in? What are the key considerations when deciding whether your shopper marketing programs should be tracked and analyzed in your TPM system?
Today, relationships with retail partners go well beyond the traditional ad feature, temporary price reduction (TPR), or display to a plethora of retail-specific digital and traditional programs and promotions. Shopper marketing includes dozens of different types of programs such as digital coupons, influencer campaigns, paid social media posts, eCommerce-sponsored searches, sweepstakes, and many more. Shopper marketing truly embodies the omnichannel experience for the consumer – so much so that shopper marketing now accounts for more than $21 billion in annual spending.
So, how can CPG companies track and measure shopper marketing expenditures to better understand the overall profitability of their key customers?
At first glance, the obvious answer might be to include these programs in your TPM system. However, these systems can pose challenges for shopper marketing teams to try to fit the variability of shopper marketing into the very tight constraints of trade spending. Before making that leap, let’s review the key considerations to help you decide if your shopper programs belong in or out of your TPM system.
Considerations for Shopper Marketing in TPM
- Understand your Overall Goal: Start by outlining what objectives you have for tracking your shopper marketing and what you will do with the information you have collected. What are you hoping to achieve by tracking shoppers in your TPM system? Is true retailer profitability your goal? Is it to have a single report showing all the activity with a given retailer? Or is it really to coordinate a calendar of events to ensure that you’re not double spending during a certain time period? Your objective will help you to define the best path forward and establish if the work required is worth the reward.
- Plan for a Variety of Tactics: Shopper marketing is marked by the sheer variety of tactics that can be deployed, unlike trade promotions that are limited to only certain types of activities. During your build or set up process, consider if shopper programs will be in or out so that you can define those promotion type fields to account for the variety of programs and ever-changing landscape of shopper marketing. Five years ago, we wouldn’t have considered sponsored search a part of shopper marketing, yet today, it’s a crucial tactic for many brands.
- Adjusting to Time Frames: Just as with tactics, shopper marketing timeframes can be much more complicated than trade promotions. Typically, trade promotions are set up around the circular feature week. However, shopper marketing programs are often set up around non-time metrics, such as the number of coupon clips, which could last one day or one month depending on the retailer and product. Consider how shopper marketing programs will be planned for and adjusted to actual time frames in your TPM system.
- Establishing Proper Shopper Marketing KPIs: Shopper marketing programs can be geared towards trial, repeat, awareness building, or other KPIs. Measurements used to review results include coupon clips, coupons redeemed, engagements on social media, sweepstakes entries, and many more. A single metric to measure shopper marketing is impossible. Establishing criteria, as well as capturing that value, can be difficult in a TPM system. Planning early if you are including shopper will allow you to develop the metrics and reporting as you go rather than trying to fit shopper into a TPM system already built.
- Planning for Shopper Budget Processes: Trade plans are made months in advance, allowing for a certain process around budget and planning. By contrast, shopper marketing programs are much more fluid—brands may budget an annual dollar allocation by retailer but tactics, targeted UPCs, and time frames may be more reactionary to performance, trade calendar, and category trends.
Planned programs may not happen and dollars can be reallocated. For instance, a brand notices a softening in sales of a certain product line. Shopper marketing is often looked to for quick turn activities to boost sales requiring reallocation of dollars, but the possibilities and opportunities for change are endless. Ensure your TPM system is set up to account for the fluidity around shopper marketing planning. Decide how and when changes in the system can be made to accurately reflect plans.
The Cross-Functionality of Shopper Marketing
Shopper marketing is the ultimate intersection of sales and marketing collaboration. Whether you decide it makes the most sense to enter shopper programming into your TPM system or not, ensure that whatever system and structure you use allows for the critical cross-functional role of shopper marketing.
Planning for these considerations ahead of your TPM system implementation will ensure the smoothest process. If you have a TPM system now and are exploring adding shopper, have the conversations around these considerations as early as possible to make the best use of your team’s time and resources. Shopper marketing only continues to grow in importance and scope, so managing that spend and understanding profitability across activities with the retailer is a critical component to key business decisions.
For help in assessing the best ways to use your TPM system to track and optimize shopper marketing, reach out to our TPM experts at Clarkston.
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