We’ve not been shy in pointing to the marketing problems most merchants face. Speaking plainly, merchants will spend money on marketing – usually estimated as 5% of gross sales – and have no idea if it works. Of course there’s the John Wanamaker adage,
Half the money I spent on advertising is wasted; the problem is I don’t know what half.
But in today’s world of digital technology, that’s mostly poppycock. Grocers and their suppliers have been measuring indirect life for decades. How this works is like so:
Hershey’s runs TV ads in the Chicago DMA (direct marketing area) for their new chocolate kisses. The grocers that carry those new kisses share their sales data (from their POS) with Hershey’s. Hershey’s backs out things like weather, events, seasonality, and other externalities that might influence the sales of the new product. Based upon that data, plus the viewership and demographics data for when and where Hershey’s ran the TV commercials, Hershey’s analysts come up with a conclusion like this:
We expected the organic sales of our new kisses to be $4.2M 30 days after launch. We spent $1M on TV ads. At the end of 30 days sales were $6.5M. We are 83% confident that the $1M in TV spend resulted in $2.3M in incremental lift.
Do merchants do this analysis? We’re betting they don’t, but let’s turn to a survey to find out. Because if the industry can help merchants more effectively allocate those 5% of sales, merchants will see better success, stay around longer, and even associate those wins with their business provider (i.e POS partner and reseller). That’s a victory for everyone involved.
We’ve gone ahead and made a survey that we’re encouraging POS companies and resellers to email to their merchants. You can click this Surveymonkey link or copy it here https://www.surveymonkey.com/r/PMX5VWB. We will aggregate and report the results on ReformingRetail in about a month’s time.
Our hope is that this survey will shed light on the opportunities for POS companies and their reseller networks.
Do your part and send it out.
Add comment