Looking at Loyalty from the Wrong End of the Telescope

Many retailers and brand owners long-ago declared as dead the idea of earning shoppers’ loyalty to their store or brand.  Some of the “evidence” used to support this conclusion includes:

1. Shoppers have so many choices about where to shop that we can’t possibly keep them from straying (often cited by retailers)

2. Store brands’ lower pricing and me-too products naturally undercut loyalty to national brands (often cited by manufacturers)

3. Decisions are often made on the basis of price rather than store or brand, so shoppers buy whatever is on sale (often cited by retailers and manufacturers)

In fact, many companies which hold these beliefs gave up on earning shopper loyalty before they even tried.  It’s not hard to find out which ones they are.  Here are some of their characteristics:

• Their Shopper Marketing programs are focused on growing store traffic or household penetration rather than growing shopper retention and share-of-wallet.
• They are more focused on their competition than on their shoppers.
• The majority of their shopper-facing store and brand investments are not planned or executed with their best shoppers in mind.

• They can’t answer the following questions:

1.Which shoppers matter most to my store or brand, based on their actual shopping behavior?

2. What is their current and potential contribution to my business?

3. What, how, and why do these shoppers buy?

4. How many of these shoppers is my business losing or gaining each year, at what cost and benefit?

5. What proportion of my demand creation activity (advertising, innovation, promotion, price, etc.) is targeted to and lands on the specific shoppers who matter most?

6.  How much are we wasting by aiming at the wrong shoppers and aiming the wrong ideas at the right shoppers?

As a result of these knowledge gaps and flawed strategies, most retailers and brand owners have failed to identify, disproportionally engage, and adequately reward the shoppers who matter most.  Their Shopper Marketing progras (and other efforts) continue to underperform because:

(1) much of their investment lands on the wrong shoppers.

(2) their best shoppers find most of their programs irrelevant.

The bottom-line impact?  Shopper Marketing strategies which are not based on a deep understanding of the most valuable shoppers results in slower growth, narrower margins, and an increasing commoditization of stores and brands.

Happily, some retailers and brand owners are starting to turn the question around.  Instead of asking “why are shoppers disloyal to us?” they are asking “how loyal are we to our best shoppers?”  If these leading thinkers allow their curiosity to drive them forward, they will find themselves on a very rewarding journey, with superior Shopper Marketing strategies and improved financial results.

About the Author

Matt Nitzberg - EVP, Manufacturer Practice at dunnhumbyUSA

Matt Nitzberg is Executive Vice President, Manufacturer Practice at dunnhumbyUSA. In this role, Matt leads dunnhumby’s strategy and client relationships with brand owners in emerging channels and directs global strategy among dunnhumby’s consumer packaged goods business. Prior to his current role, Matt served as Global Vice President, dunnhumby ltd. in which he established and led dunnhumbyUSA’s Manufacturer Practice. Before joining dunnhumby, Nitzberg held marketing roles of increasing responsibility at Procter & Gamble and Borden Foods. Nitzberg also held a variety of senior roles at Information Resources including the leadership of IRI’s National Accounts client group.

What Shopper Marketers Can Learn from the Super Bowl – AnnaMaria M Turano

If you were anywhere near a US grocery store last week, you likely walked right into enormous Super Bowl party displays. Everything needed to feed a crowd was on-hand: various 2 liter soda packages, salty snacks, dips, trays of wings, football cakes, home team plates/napkins, etc. Talk about a football fan’s dream come true…

The Super Bowl “store-within-store” is a great example of how shopper marketing can work because it incorporates 3 key elements:

1. Multi-dimensional solutions: The best in-store displays offered one-stop shopping – covering Super Bowl party set-up, consumption, and clean-up needs from Kick-off to the final seconds.

2. Inspired offerings in unexpected settings: Many shoppers probably didn’t put “football-shaped cake” on their Super Bowl grocery list but the unexpected, novel offerings were a “touchdown” if featured in the Super Bowl displays vs. typical bakery departments.

3. Integrated in-store and at-home messaging: Smart marketers made sure the football message was highlighted in their packaging, promotions, and advertising – communicating fun from shelf to home .

Smart merchandising of your brand as part of a seasonal or special event in-store promotion can be a winning “play” for shopper marketing success!

About The Author

AnnaMaria M Turano is an executive director of MCAworks. She leads client engagements involving corporate and

AnnaMaria M. Turano - Phenomena.com Guest Blogger

product brand strategy, customer value proposition development and new product development. She is the co-author of Stopwatch Marketing. MCAworks is a management consulting firm based in Westport, CT, USA, which is dedicated to helping clients accelerate and sustain business growth via action-oriented sales and marketing strategies.

AnnaMaria M. Turano

Executive Director, MCAworks

http://www.mcaworks.com

aturano@mcaworks

New Year and New Thoughts for Shopper Marketers

In the spirit of the new year, I offer up the following resolutions to keep in mind for a successful 2010:

• Invest in today and tomorrow will take care of itself.  Now is not the time to extinguish your advertising, promotion, research, and innovation budgets; now is the time to wisely use your budgets to better understand your consumers so your offering remains meaningful in the present and the future.

• Go-to-market together.  As marketing budgets must be maximized in the new year, marketers should consider partnering with complementary brands (for example:  Heinz ketchup and French’s mustard) to share in research costs, advertising dollars, in-store displays, etc.  Knowing how your consumers shop (e.g. what else they buy and/or use with your brand) will help you identify appropriate brands to consider approaching for collaboration and coordination of your precious marketing budgets, calendars, and initiatives.

• Aim for customer monogamy, not just customer loyalty.  Loyalty means that your customer is shopping in your store, your category, or your brand most of the time – and probably your competitors on a less frequent basis.  If you truly want to maintain and grow your heavy user base, aim to deliver on all of their needs so your customer has no reason to be tempted to switch.

• Make customers feel good about shopping.  Right now, shopping (except for everyday necessities) feels wrong, foolish, and indulgent when news headlines continue to communicate economic woes.  Appeal to your customers’ emotions that they are doing the “right thing” with their savvy purchases.

• Understand that “value” means more than “cheap/low prices.”  Consumers are savvier than ever and want the best value for the time, money, and effort they spend shopping and using the resulting goods.   Reward their efforts by making it easy for them to shop your store, your category, and your brand.

• Walk in your customers’ shoes (or boots).  You rely on research to ground yourself in the facts about your customers – the demographics, psychographics, purchase behavior, purchase interest, brand preference, etc. that lead you to the insights used for strategic decisions.   However, you need to also look up from the numbers once in a while and  look at the people behind the numbers.  Observe how your customer lives – walk around their neighborhood, watch them deal with traffic headaches,  note their mood when they walk into their office (vs. when they leave their office), shop in their stores, and eavesdrop on their in-store purchase decisions.  Remember that your target more than likely lives a life that is different than your own and that he/she will make choices different than you will.   Respect their footsteps and their path in life.

AnnaMaria M. Turano - Phenomena.com Guest Blogger

• Remember that shopping isn’t just an in-store or online activity.   In some way, consumers never stop “shopping” – they are always recognizing new problems or dealing with recurring problems and looking for solutions.  Sometimes, consumers are merely asking friends for quick advice; other times, they are going online or to a store to look for an actual solution.  At its essence, a marketer’s role is to be a problem solver.  Identify when your customers start to think about the problem that you solve and remember the rule of “rights” – right product, right placement, right message, right timing, and right price.

About The Author

AnnaMaria M Turano is an executive director of MCAworks. She leads client engagements involving corporate and product brand strategy, customer value proposition development and new product development. She is the co-author of Stopwatch Marketing. MCAworks is a management consulting firm based in Westport, CT, USA, which is dedicated to helping clients accelerate and sustain business growth via action-oriented sales and marketing strategies.

AnnaMaria M. Turano

Executive Director, MCAworks

http://www.mcaworks.com

aturano@mcaworks