When it’s time for your CPG brand to leverage consumer promotions to connect effectively with your audience, don’t miss your shot at getting the most out of your message and your investment. To help, we’ve outlined the tips, tricks, and techniques for how CPG brands use consumer promotions to drive shopper engagement and strengthen relationships with retailers.
First, let’s break down consumer promotions. These are typically digital or physical incentives or offers that a CPG brand directs towards consumers to boost sales, increase loyalty and keep them engaged. For the best ROI, brands agree that working with the right partner and using market research to determine what consumer promotions will work best is essential.
Promotions allow companies to differentiate themselves from their competitors. They can focus on client-facing communication around the promotion and build meaningful relationships that increase word of mouth referrals.
Consumer promotions usually involve purchasing a product – this creates an incentive for consumers to buy your products and will boost revenues. However, it is important to ensure that the promotion is a profitable endeavor and that estimates are made of how many consumers might redeem it.
Consumer Packaged Goods brands, or CPG brands, are those that focus on products that are relatively low-cost commodities. They are generally consumed regularly and, as a result, are individually packaged or sold in small quantities.
CPG brands include food and beverage, cosmetics and home goods companies – and according to Nielsen research, these brands invest about 20% of their revenues each year in consumer promotions.
Consumer promotions are proven to drive sales for companies in this sector since in-store displays and product sampling help consumers select their brand over competitors. As a result, they drive shopper engagement and help foster brand loyalty.
Consumer promotions are essential for building relationships with retailers. When it comes to retailers, they look to CPG brands to finance their retailer specific marketing initiatives. So, essentially, the retailer can market itself with the CPG Brand’s money.
Luckily, CPG Brands leverage retailers to fund almost all of the discounts that they offer on their products in order to grow their sales volume and market share. A study by Gartner found that these promotions could cost CPG brands over 25% of their revenues – a number that reaches the hundreds of billions in the US.
This exchange is clearly beneficial for both sides as the incremental display space and sales opportunities in store tend to support the bottom line for CPG brands and retailers. Customers also tend to make decisions at the shelf – so, having tags displayed with discounts and promotions is an effective way to stand out. This is especially true for CPG brands, where consumers tend to be price-sensitive and there are many different companies to choose from.
As you set off to use consumer promotions to take your CPG brand to the next level, walk through this checklist with your team or your agency partner to ensure you’re considering everything!
Before you even get out the gates, stop and ask yourself – are you creating value for retailers? More specifically, are you creating value for your category manager? Prior to launching a consumer promotion, be sure that the retailers that are selling your products will obtain some value from it otherwise it won’t get very far with retail partners. In some cases, pricing to move volume may be all that matters; yet, in others, it’s important to showcase your brand’s creative side and bring the retailer’s category to life.
Lean on your sales staff or your brokerage to help you clearly understand what will move the needle. As a bonus: When your consumer promotions align with the values and needs of the retailer, it incentivizes them to give you better shelf locations and consumer visibility!
Next, you must confirm if the promotion matches your brand. We all know that there are a lot of consumer touchpoints and retailer specific programs out there – so why this one and why now? Make sure that your marketing and sales teams are working together to identify best-fit opportunities for your brand.
When we say this, we mean everything, from your values and purpose to your target consumer – the second most important audience after the retailer. The goal of consumer promotions is to build a gateway to your brand – so, does this consumer promotion accomplish that?
Number 3 on our CPG brand checklist for consumer promotions is to make it simple. We jokingly reference the acronym KISS: Keep It Stupid Simple.
This lends itself to dictating how your brand determines what is the right balance of information, effectiveness, access and effort. Promotions with too much information can be complicated and turn off consumers. The more hoops you have them jumping through, the more likely you’ll lose their interest and business. So, how is your consumer promotion keeping things as simple as possible without losing its purpose and achieving your goals?
Utilizing multiple points of engagement is necessary for your consumer promotion to be successful. You can’t just focus on retail – other elements need to be incorporated to ensure you are engaging with your target audience at every possible opportunity!
The Harvard Business Review found that 73% of shoppers utilize more than one channel during their shopping journey, so you need to make sure your brand engages with them across each of these touchpoints. This is a specific point where agency partners can offer guidance based on experience. The goal should be to create a seamless consumer experience and help them find your products anytime, anywhere.
Doritos has done a great job of creating a buyer persona and engaging with that target audience across several platforms. If they are targeting males under 25 who enjoy playing video games, they know having a presence on TikTok and Snapchat is essential.
They know that they’ll likely be going to the store for things like frozen pizza and beer, so staging free samples and promotions around those areas in-store would be most effective. Similarly, if they are going to be doing a prize giveaway, what better prize than a video game console?
By engaging with your target audience through multiple channels, you will increase brand loyalty and boost your sales!
The next item on our checklist is something we like to call the “Who Cares” test. Simply put, your promotion needs to be on brand and resonate with your consumers – otherwise, why should they care, and why should they choose your products over your competitors?
Think about this from your target audience’s point of view. We are constantly bombarded with ads and have tons of options available at our fingertips – you only engage when there is something in it for you.
Your promotion needs to provide some value to your customers, and this competitive advantage needs to go beyond pricing! Before you offer samples in store or offer a promotion, make sure it passes the “Who Cares” test.
One of the quickest ways for your brand to generate interest is by sponsoring a local, professional sports property. As far as finding something that people will care about, few things will resonate with consumers more than their local sports team.
Be sure to measure your results as well and use tools like Google Analytics, Facebook Insights, or consumer surveys to better understand what they want to engage with.
Even if your consumer promotion is valuable and passes the “Who Cares” test, it needs to be visually appealing and creative to gain traction!
Creative branding and visuals are at the heart of effective consumer promotions since your target audience won’t notice them if they are not eye-catching. If you are advertising your promotion on social media, avoid using a static image – don’t be afraid to use colors and GIFs.
This is yet another area where an agency partner can amplify your consumer promotion’s brand identity by putting their creative department on the case.
This critical item on the checklist involves aligning the consumer promotion with a central theme. The promotion should have this theme threaded throughout the experience so that it can incite a specific behavior in consumers.
We like to call this the Red Thread – the theme that ties everything together regardless of how many different touchpoints there are. This theme gives clear instructions to your consumers on how to purchase your product.
Awareness involves publicizing the consumer promotion to your target audience. This lets them know when the promotion is happening, as well as where and how they can participate.
Next is the call to action, which is the incentive to get them to participate. This portion needs to align with your underlying theme!
Finally, it’s time to retarget consumers that participate with a special offer or follow-up message. The goal here is to reward them for their engagement, so offer them something that they care about. For example, send a new customer a coupon offer for 10% off their next order.
Once you’ve narrowed down the theme and visual aspects of a promotion, it’s time to make sure the displays are effective. Let’s get creative – the displays don’t always have to be static and flat!
Think about exploring options like AR-enabled displays that allow you to do more with less while giving your images more depth. Imagine allowing customers to use AR to try a free sample of makeup or a home product?
CPG brands like Sephora and L’Oréal are already doing this – customers can see how their products will look on them digitally, and this has significantly improved engagement and retention.
Since interactive displays will capture your target audience’s attention, it will also help pull them away from competitor brand displays.
An important question to ask when considering the scope of your consumer promotions’ reach and investment is whether it can benefit from co-marketing.
Co-marketing is a strategy in which you align buying power with other companies to enhance the benefits for not just the CPG brands, but also the consumers.
One of the best examples of co-marketing for CPG brands is Red Bull & GoPro. Red Bull took advantage of the fact that its target audience aligns perfectly with GoPro’s audience, so they partnered to create high-octane, unique consumer promotions that fit their energized brands.
The last item to consider in your consumer promotions strategy is how it affects your budget. Ideally, your team and partners have developed a consumer promotions budget that accounts for the people, resources and ROI you’re looking to achieve.
Advertising your campaign is one of the most important factors to achieving success. Since, campaigns typically run within a 3-5 week in-store window, make sure you budget for that timeframe. Among other things, consider the costs of trade marketing, print collateral, merchandising and digital media. Also, consider these variables: Are you advertising it in-store? Is there a social media campaign to support the promotion and broaden its reach?
Be sure you’re maximizing the reach of your consumer promotion, an don’t miss an opportunity to connect with your audience at every possible touchpoint.
So, now that you know how to develop your consumer promotions strategy to boost shopper engagement and sales, the next step is determining where to use them to get the highest impact on reach and ROI.
We can break this down further into four sections: product seasonality plans, new item launch strategies, additional display space and incentive purchases.
Planning for product seasonality is essential and having specific strategies for each season will increase the ROI on your consumer promotions. Take advantage of the fact that the holidays usually mean higher consumption, so you can incentivize consumers to buy multiple packages or larger sizes.
Use seasonal demand to your benefit when it comes to running consumer promotions.
Consider running multiples like buy two, get one free – which will lock shoppers into your CPG brand for the remainder of the holiday season! This can also cultivate brand loyalty and lead to repeat purchases.
According to Nielsen, up to 85% of new CPG products will fail after launch – this means that your new item launch strategy needs to be carefully thought out.
When designing consumer promotions for a new product launch, first focus on targeting the right audience. You want to get your brand in front of those who will want to buy your new product!
Offer free samples, coupons, and trial programs to let your consumers experience your product first-hand. This will encourage them to try your product and potentially lead them to become loyal consumers.
This will also get people talking, and the more excitement there is surrounding your product launch the better!
Positioning your consumer promotions in additional display space allows you to improve their impact. By displaying your promotions in-store, you have the opportunity to target consumers right when they are ready to make a purchase. This helps you get noticed in comparison to your competitors!
Creating incentive purchases – both online and in-store – is a great place to use consumer promotions to increase their impact.
Consider offering anything from free shipping to a coupon, with the goal being to convince more of your target audience to complete their purchases. This can also convince them to spend more money per transaction!
How many times have you been ready to make a purchase online, but are just a few dollars short of unlocking free shipping – so you add more things to your cart? This is exactly how consumer promotions can help CPG brands boost sales and customer engagement.
If you’re a CPG brand, follow this checklist to amplify your consumer promotions – but most importantly, use an agency to ensure that each step of the process is successful.
We work with CPG brands to launch consumer promotions that capture consumer interest, and cultivate brand loyalty by employing proven and practical strategies that provide creative solutions. In other words, we know what it takes to drive growth in retail in today’s challenging business environment.