CSD: Reaching Your Target Audience
By Tom McIntrye
Through
a special arrangement, presented here for discussion is an excerpt of a
current article from Convenience Store Decisions magazine.
There’s tremendous pressure
to cut costs today, yet somehow advertising budgets are usually considered
the most expendable luxury in the struggle for economic survival.
But executives who succumb
to this pressure put the long-term viability of their companies and brands
at risk, according to Peter Fader, marketing professor at Wharton School
at The University of Pennsylvania.
Today’s economy provides
an unusual opportunity to differentiate your brand so it stands out in
a crowd, but it takes courage and conviction to get senior management on
board. The key here is that a business must craft a message that reflects
the times and describes how their product or service benefits the customer.
Some guidelines to consider:
- Be careful to position yourself
as the "lowest-price provider." It could have a long-term negative
impact on your brand unless your business model is built on this concept. - Advertise
value: "This
is what you get for your hard-earned money at our store." - Wunderman
COO Dave Sable says customers need you as much as you need them. If your
communications and advertising cuts are too deep, the cost to regain
share of voice once the economy improves may be four to five times the
cost you saved by making the cuts in the first place. - In our digital
world, negative news about a brand spreads like wildfire. It’s critical
to give people good reasons to say positive things about your brand. Recessions
come and go, but a brand is for life. - For c-store retailers, Matt
Williams from The Martin Agency said it best: You can position your brand
as an ally to consumers in tough times with product development or sponsorship
programs that compel consumers to say, "I see by its actions that
this brand is on my side." That will pay dividends not only during
a recession but far beyond.
Discussion Questions:
How should advertising budgets be adjusted during tough times, especially
for c-stores? What piece of advice would you have for c-stores around
advertising during difficult times?
Retailers and suppliers are taking the sludge hammer approach to cutting back for the recession. What is needed is a scalpel.
Digital advertising has been around for so long now, we think everyone understands it. But they don’t. Why is that critical? Because in tight times, there is exceptional pressure for your ad dollars to work for you and be measurable. That is the definition of digital advertising.
Yet many brands are still inexperienced in the space and, therefore, afraid. But retailers and brands alike who get expert help will find that their digital ad dollar goes much farther than their traditional one.
C-stores need be exactly that–convenient. From my view, half or more of their advertising is their location rather than via any media form of advertising. That being said, if the location factor is satisfied, then so should the experience factor. It must be a superior experience with respect to convenience in today’s market. Clean, fast and friendly. These factors equal as much as the product itself. These factors are top of importance of any means of advertising. When they exist, advertising should be a an unneeded excess expense.
If c-stores focus on core functions of their business and create value, their advertising and marketing should remain untouched as a result of the economic times. Their survival depends on maintenance of demographically excellent locations and the experience that lies within. No billboard, ad, or means of advertising will help if that doesn’t exist.
I like David’s term scalpel for how we should approach ad and marketing budgets (although I would have said Xacto knife considering we are in the retail industry). Would now be the best time to make your brand known? And wouldn’t now be a perfect time to build a relationship with your customer? We don’t need to bet the farm on marketing but now is really the best time to reach out to your customer.
C-stores can especially benefit during this rough patch. Offering convenience and value (the latter a relatively newer concept for c-stores), retailers can capture more market share by marketing to different buying groups. The quality of c-store products and layouts has increased over the years and I believe we are at a point where we can reach out to different customer groups. C-stores can be part of the everyday shopping experience if positioned correctly.
I would say optimizing the marketing budget is better than taking a flamethrower to it.
Independent of the current economic climate, understanding the C-store consumer and his or her mindset is crucial to understanding how to position and market a C-store brand correctly:
We would recommend doing the research to better understand the “grab and go” consumer–or even the segments within the C-store universe (e.g. 5, 10, 15 minute shopper). What demographics? How else do they seek convenience in their lifestyle? How are they typically shopping (e.g. online vs. bricks). Where do they receive info about products/brands? (e.g. social networking, texting vs. email) What other brands do they covet? Where else do they shop or eat? And WHY?
Once you know the customer, you can get creative about attracting him or her to the brand through the right media and message. And of course, you can look for inexpensive methods to do so.
My thought is how the C-store shopper behavior may have changed in response to the recession. A million words have already been written about a possibly permanent change in consumer spending behavior. If that’s true, then it impacts all aspects and segments of retail, including CSD. The prevailing “wisdom” seems to be that consumers have shifted to actually attempt to save, are far less influenced toward impulse, and actively invest energy in order to save money on the things they absolutely need. Some of that has very little implication for CSD, while one of them, the idea about impulse purchasing, does.
I might argue that in order to understand how advertising should change, one has to understand how the motivations and needs of the consumer, as displayed by their collective behavior, have changed. In theory, advertising is simply a medium for connecting goods and services with those who potentially value them. The “value” part of that equation has changed, and perhaps, so has the line up of things so valued.
One theory might be that “convenience” returns to an assortment which delivers commonly and regularly needed items…but for what set of needs? Food? Household dry goods? Travel items? While this speaks to assortment tailoring, it also speaks to advertising content. What becomes important to the recession convenience shopper? Clearly this one requires research. An opinion of one, however, might be that the recession convenience shopper wants to know that they won’t be price-gouged, that they can find at least one representative SKU of what they need, and that the service will remain fast and efficient. After all, it’s STILL the CONVENIENCE channel.
Want to cut your ad spending without hurting your business? Ask the suppliers (newspapers, radio and TV stations, etc.) to reduce their rates 40%. Even if the price only goes down 10%, you’ve cut the budget and lost no impact. Want to get the rates down further? Meet with your fellow retailers using the same suppliers, especially your competitors, and approach the suppliers as a buying group. Punish the suppliers who don’t reduce prices by withdrawing everyone’s business asap.