Did you know that each year the consumer packaged goods (CPG) industry spends $300 billion on trade promotions? According to a Data Informed article, that’s more than 17 percent of revenue at an average CPG company and nearly twice the marketing budget.
With the stakes that high, business must be booming at these companies, right? Think again: More than half of all promotions fail to deliver a positive return on invest, and many lose 50 cents on the dollar.
Let’s face it. Promotions can either be a gigantic success or a colossal failure for your bottom line. Or, maybe they fall somewhere in between, making the executive team wonder what could have been done differently. It’s time to take the guesswork out of promotions. And no, I’m not talking about running point-of-sale software after Week 1. I’m talking about finding out what’s going on in your stores at any time.
Think of CPG Promotions Like Social Media
The human race is connected to each other through social media in ways that have never existed before. At any given moment, you know if your best friend is dating someone, what she ate for dinner, or how annoying her commute was. It’s time the CPG industry starts treating promotions like a social media experiment. Spy on your promotions. Gossip about them with your team. Try to tweak them, like you would crop that terrible photo of yourself or edit that misspelled comment. It’s time we start looking at promotions through the lens of human behavior and all of our glorious imperfections.
Why wait to learn from mistakes when you can jump in and fix the issues that are affecting your bottom line? It just makes more sense to utilize real-time data, and it’s feasible with 21st century technology, including mobile devices.
Just like a digital company launches social media campaigns, test campaigns with your new products. See what works before rolling it out across your network, and use that valuable time to adjust the offering.
Even on your corporate social media account, you (hopefully) wouldn’t let a week go by without checking your messages. Don’t let the same interval of time pass before learning about your promotions from the field.