Five Considerations for Shopper Marketing Budget Prioritization
By Erich Parker
How to maximize your shopper marketing budget.
One of the most difficult parts of planning shopper marketing is prioritizing your budget. There are a seemingly infinite number of goals with never enough resources. How can we be certain we’re spending our budgets appropriately—along the path to purchase, against the right customers and targets, at the right time and in the right channels? Since we can’t predict the future, the best we can do is make sure we’re employing the right criteria to guide us. To help, we’ve outlined five key areas of consideration when it comes to prioritizing your budget.
Clearly Define Your Objective
The more specific your objective, the easier it will be to prioritize your budget. You might say your objective is to increase sales, but that simple statement provokes more complex questions:
- By how much are you looking to increase and versus what benchmark?
- What time frame are you looking to impact?
- Which time periods are you comparing?
- Do you need to drive distribution growth?
- Is your brand or product established, or is it a new product?
- Are you looking to drive sales with current consumers, or have you saturated your current target and need to find a new source of volume?
- Do you know what is preventing this increase or what behavior we need to affect to achieve success?
How you answer these questions will help you define your objective with as much specificity as possible and allow you to focus your budget where it will be most impactful.
Understand Your Sales
Let’s say you don’t have enough budget to impact every customer, region and channel of trade, so you’ve decided to focus your efforts—but where? Start with understanding where your sales are coming from and where your greatest opportunities lie. Here are a few pertinent questions for understanding your sales:
- Are there specific customers that are outperforming others on dollar and/or unit sales for your brand?
- Are you outperforming the category with one retailer, but have opportunity to grow in another?
- Is there a category buyer relationship that needs support, or do you have a strong relationship somewhere that can be leveraged for incrementality?
- Are you seeing better performance in brick & mortar or e-commerce?
- Is there a region of the country that presents a unique opportunity for brand growth? Or is there a region that you’re going to win no matter what and therefore you can focus elsewhere?
Once you’ve conducted this analysis, you can make choices about defending territory or spending where you have the most opportunity for growth, which would depend upon your objective as well.
Analyze the Competition
Are you the biggest spender in the category, or does your competitor have that luxury? If you’re the challenger, you’ll have to be sure that whatever you do, it will be noticed. It could require you to spend where they are not so that your share of voice is larger. For example, maybe your competitors have chosen to go all-in with retailer A, making it difficult to get any attention there. Identify other retailers or areas of opportunity. Not only might your voice be louder with those audiences, but also your chosen retailers might look more fondly upon your brand versus your competitor because of your support. This could have a multiplying affect on your business at these retailers.
Outside of retailers, when you’re up against competitors that can outspend you in other areas like TV, consider exploring niche opportunities to reach your shared target. That could look like choosing programming that resonates more deeply with your target, or like only spending in the most impactful dayparts. Understanding what your competitor is doing will allow you to make focused decisions to either go head-to-head with them or forge a different path.
Do More With Less
Depending on your available budget, doing less might allow you to accomplish more. You don’t want to dilute your budget by spreading it thinly across too many priorities. Spending just a little at each retailer just to say we did it usually translates to very little impact. The old adage, “If it’s worth doing, it's worth doing well,” comes to mind. Prioritize a few key retailers (or just one) rather than trying to spread the budget nationally.
Beyond retailers, do you have enough budget to impact the shopper throughout their journey? If you have a budget of just $50K, you can’t expect to both build brand and convert. Instead, identify ways for your shopper spend to complement your existing brand activity. Think holistically and pick points along the funnel in which you can be most impactful. If there is no brand budget, which can happen when a brand or product is early in its lifecycle, identify the lowest hanging fruit you can impact. Identify those early wins that can be measurable and then parlay those into bigger bets and opportunities later.
Leverage Retailer Media Networks
It seems like every day a new retailer media network launches. Some of them are just margin builders and a way to increase slotting fees, but others provide meaningful access to first-party shopper data and an opportunity to grow your brand. It’s important to know one from the other and how they can each play a part in your overall marketing mix. Start by asking the right questions:
- What will you get for the spend?
- Do the channels resonate with your shopper?
- Can you activate this channel yourself to save?
- Will you get extra support from the retailer based on certain spend levels?
- Will you miss out on incrementality if you opt not to use their network?
- Will you be part of a larger corporate program and just be a logo on a display, or will you get customized media?
- Does the retailer’s programming allow you to exhaust reach to your target, or do you need to complement with additional programming?
Being aware of the varying retailer spend tiers and thresholds will allow you to make the most of the spend. Sometimes incremental shelf space or display in addition to your retailer media network efforts will help deliver the ROI and pay for the media channel.
Understanding which questions to ask, and more important, how you answer them can help ensure that your shopper marketing spend matters, no matter how big or small.