It is difficult to imagine a simpler and more effective method of CPG retail marketing than an in-store demo. All you need to do is put your table with your product samples in a retail store that sells them and watch shoppers snatch them away in their carts.
We've all heard about the spectacular success of brands like Kind and Miyoko's Creamery, which leveraged in-store demos to propel their customers' demand and market value. This begs the question: why do so many CPG brands elect to spend money on digital and media advertising instead of directly engaging their potential customers at the time and space that present the best opportunity for actual success?
One possible answer is their reliance on the magic of brand exposure and loyalty. The level of brand loyalty seems to have vanished as a result of the COVID experience and high inflation. The results of consumer sentiments are quantified in a recent survey, “What drives CPG purchasing decisions?” In fact, only 8% of respondents listed ‘brand name’ as the impetus for consumer packaged goods (CPG) purchases.
What makes people buy the products they use the most, if not brand recognition or loyalty? The answer is: "customer experience." Consumer packaged goods, or CPGs, are the foods, drinks, and personal care items that households use and rely on most frequently. Consumers are now more focused on the quality, ingredients, and health benefits of the products they purchase, rather than just the brand name. This shift in consumer behavior has led CPG brands to reevaluate their marketing strategies and focus more on product innovation and transparency. While digital and media advertising still play a role in brand awareness, in-store demos and direct engagement with consumers may be the key to driving demand and market value in today's market.
The retail market for CPG products is one of the largest, both domestically and internationally. CPG sales were expected to reach $1.56 trillion last year alone (and that's just in the United States). As a result, the CPG market has enormous potential for growth and is fiercely competitive for advertising space. To describe the state of CPG marketing as a fiercely competitive space would be an understatement. One of the primary reasons digital marketing cannibalized media advertising budgets is the better ability to measure its impact. It is much easier to justify an investment that results in clicks and likes as an indication of consumer engagement and brand exposure than imaginary TV viewer numbers or copies printed.
Did you consider that consumers receive between 6,000 and 10,000 advertisements daily? Marketers for CPG products face a lot of noise to cut through, given the situation of e-commerce and digital advertising today. Are you aware that a large number of clicks and likes are not necessarily consumer generated? The software giants are continuously fighting bad actors who make a living by serving bot-generated false signals, and because of all of this, estimating the true cost of acquiring a customer is very difficult and expensive.
So, what are the best ways to stand out and meet consumer demand?
One way to make your products and brands stand out is to offer consumers the opportunity to experience, taste, or sample them. For the majority of CPG products, offering a free sample is a great way to attract new and devoted customers. A physical retail store is not the only opportunity for free sampling, as examples from the Amazon Prime Try Before You Buy program show. The majority of wardrobe items across price points are available for a 14-day trial for Prime members, which makes choosing Amazon for online purchases simple.
Naturebox is another business that excels in this area. To meet all of your snacking needs, Naturebox aims to curate premium snack boxes for you and then send them right to your house. They provide a 15-day free trial, which entitles new customers to 15 days of snacks at no cost. This is because Naturebox knows that letting customers taste a product increases their likelihood of buying it by 73%. It is critically important to note that “likelihood of buying” should not be confused with a sample-to-purchase conversion rate because experiencing a product in the wild does not generate the same sales as a curated experience in a store.
Over ten years of collecting and analyzing in-store demo reports afford us a substantial database of detailed information to forecast the efficacy of a proposed store sampling event with reasonable accuracy. The cost of customer acquisition (CAC) is the focus of the methodology we utilize for the forecast, where the following factors are considered:
Most CPG field marketers are focused on sales of the products during the in-store demo as a primary measurement of success or failure; some attempt to estimate the number of units sold during the following two or three weeks after the demo event. We suggest a model that accounts for the price of the promoted product, its category, and the frequency of its consumption.
The expected number of shoppers during a store demo event can be learned from the store's staff, a Google search, or a statistical extrapolation of regional averages. However, the store traffic number is not sufficient to forecast the efficacy of the in-store demo event. One factor that is often discounted is the rate of shopper engagement. CPG field marketing managers commonly use more is better wisdom. The data suggest that the E2P conversion rate starts to decline in an overcrowded store because the shoppers' attention span starts to shrink, and they refuse to engage.
A lot was written about the critical role played by the experience and personality of a brand ambassador in the success or failure of an in store sampling event. Let's face it: most CPG brands or physical retailers rarely hire, train, or manage the brand ambassadors who promote their products to consumers. Most brand ambassadors, who are not members of the field marketing team of a CPG brand, are independent contractors sourced (or pimped) by the demo companies or staffing specialists. The quality, attitude, experience, and product knowledge of each individual strongly correlate with the source that provides them. The comparison in performance of brand ambassadors is not unlike that of Eharmony (demo companies) and Tinder (staffing companies) in its impact on consumer engagement and experience-to-purchase (E2P) conversion rates. The consistency of brand ambassadors' performance and the rate of their retention depend strongly on the quality of the management team, which schedules their time, coordinates the events, and provides support, training, and payroll management. The forecast model must address the impact of some or all of these factors to produce a meaningful estimate.
Every day I analyze workflows and performance reports for dozens of in-store marketing events conducted by different CPG businesses, and I’ve been doing it for years. As you can imagine, I have spotted a few problems that cause companies to waste valuable resources by failing to follow best practices.
So here is the invitation: if you invest 30 minutes in reviewing your in-store demo procedures with me, I'll show you where you could save money or get better returns.
So what’s the catch? Nothing is free, right? Well, it comes down to reciprocity… At the end of the review, if you want more ongoing help now or in the future - hopefully, you’ll come to Demo Wizard rather than a competitor.
I can only do up to two reviews daily, so please choose a day that’s good for you and use this link to book time with me.
