Whether on premise or off premise, the liquor industry thrives on promotional activity. But how can businesses measure whether the efforts and costs invested in executing these promotions are worthwhile? On Tuesday, 27 July, Simon Elsby, APAC Sales Director at Exceedra presented a webinar for members of the Drinks Association: How to make promotions planning and analysis easy.
Mr Elsby outlined several challenges faced by the drinks industry:
- Retailer-requested or driven activities and promotions that don’t deliver returns, or running promotional activity for 'activity’s sake'
- Promotions that don’t pay for themselves, or which deliver revenue and volume but not margins
- Difficulties in tailoring activities for chains versus independents, or for different states, resulting in one-size-fits-all executions
Identifying the drivers of footfall, revenue, and margin
- Gaps in the data mean gaps in knowledge of what works, where
This often results in promotional calendars that are ‘the same as last year, with adjustments made for Easter’ with wasted spend, time and effort. Additionally, Mr Elsby said, there is often revenue, profit, and volume left on the table.
Keen members of the Drinks Association joined in to hear the insights from Mr Elsby who leads sales through APAC for Exceedra, the solutions provider to consumer goods companies around the world.
He encouraged marketing planners to identify the most important metrics to measure promotion effectiveness and return on investment. This means having a really good and solid understanding of baseline volume and incremental promotion metrics, including cupboard stocking, forward buying, levels of retail switching and isolating price, and promotional mechanic variables.
Mr Elsby addressed the above, with some key takeaways for measuring the efficiency of promotional activity in the liquor industry:
1. The most important metrics to use to measure promotion effectiveness and ROI. He described the true uplift for a manufacturer as being the growth of the product being promoted, and the level of retailer and other brand competitor switching, then flipped it to see it from the perspective of retailers who measure it through the lens of category growth and other retailer competitor switching.
2. How to determine 'how, where, and how much to invest in promotions' and what to consider when planning and tracking promotional activities. Mr Elsby talked about having a clear line of sight to what you plan to what you track and what you measure. He used promotional frequency and ROI comparisons from different countries to illustrate this.
3. How to make all the above happen in an easy-to-implement, replicable fashion through integrated business processes that enable different functions within the organisations to have: visibility of data and information by brand, customer and channel, all housed in the one planning system