Too many meetings and reports undercut promos
Frozen & Refrigerated Buyer staff
Through a special arrangement, presented here for discussion is a summary of a current article from Frozen & Refrigerated Buyer magazine.
Are too many meetings, too much paperwork and too much manual data entry driving you crazy?
You’re not alone.
Shopperations, a provider of shopper marketing event lifecycle management, recently surveyed more than 100 CPG marketers and others in the industry to zero in on common frustrations.
Olga Yurovski, founder of Shopperations and a veteran of CPG companies including Conagra Brands, has noted in the past that ROI of many promotions seems to be slipping and more proactive sharing of information and ideas between trading partners would be wise.
Here are six pain points identified from the study:
1. Too much administrative work. The majority of respondents say they spend too much time on administrative duties. Dissatisfaction of those in senior positions is more pronounced. More than 80 percent of associate and assistant managers said they spend at least 41 percent of their time on non-value-added activities.
2. Out-of-control silos. While unavoidable, more than half believed organizational silos are detrimental and out of control. Managers and senior managers, in particular, think this area is problematic.
3. Too many meetings. Almost three quarters said too much time is spent in meetings. Again, senior level professionals signaled their dissatisfaction.
4. Manual reporting wastes time. More than 80 percent of managers and senior managers say their reporting is too manual and time-consuming.
5. Tools have not evolved since 1990. The majority of tools that participants use the most are almost three decades old and manual in nature. This directly impacts on the time spent reporting as well as the level of administrative work. Data is unavailable in real time, and reports aren’t generated automatically. Only 14 percent use a customer relationship management tool or budget management software.
6. Post-event analytics suffer. Almost half of respondents say they don’t have tools that enable them to perform their jobs in the most effective manner. The lack of easily obtainable, complete data and analytics tools limits shopper marketers’ ability to conduct post-event analytics. The process is too time-consuming, expensive, manual and inconsistent.
Discussion Questions
DISCUSSION QUESTIONS: Where do you see the biggest pain points in the promotions process? What suggestions would you have for driving more efficiencies for CPG firms and their trading partners around promos?
Poll
BrainTrust
Mark Ryski
Founder, CEO & Author, HeadCount Corporation
Mark Heckman
Principal, Mark Heckman Consulting
Risk management has become an overwhelming force in marketing. With so many options available to modern communicators, selecting from among these becomes a constant activity including the addressing of biases and defining marketing investment for worthy actions. Analytics are the sword of argument, and we know that data too seldom become actionable statistics, knowledge and wisdom. Analysis paralysis means more memos and meetings, which are the proxy for legitimate action.
Many of the biggest pain points were nicely summarized in the article, but I would add emphasis to number six, post-promotion analysis. I find it ironic that, in an age where there are so many analytic tools available to marketers, analyzing results still remains a significant problem. Ultimately tools are only as good as the people who use them, and so I think the underlying issue is a lack of skills/training for marketers in using the tools and extracting the insights.
I think I just read a description of most interdisciplinary decision making processes, promotions being just one.
I agree. Regarding meetings — when I worked for a major corporation, one of the oft heard statements was, meetings are up — business is down.
This is a sign of retailers stopping their investments in modern software solutions which easily remove many of the complaints of retail workers and executives. There is no need for lots of manual entry, high levels of administration and manual reporting. The statement that “tools have not evolved since the 1990s” is only true of retailers that have under-invested resulting in their staff being less efficient, less happy and certainly less competitive than the ones who have invested.
These complaints read like something from years ago when I was a buyer in retail. They are certainly not heard in companies I work with today. The retail environment has been tough for a long time now and it is not getting any easier as all retailers are fighting each other and online retailers. They need the best solutions to help them stay ahead and unfortunately all too often stopping investment is not the answer, is it is the cause of the problems. When times are tough you need to be at your most efficient and most competitive and the only way to achieve this is to get the best solutions to help your staff operate smartly.
Senior executives in retail should understand this and listen to what their staff are telling them — the pressure of maintaining profit is one thing but it drives them out of business in the long term. It is a very dangerous route to take.
As a former VP of marketing tasked with staging promotions for a major supermarket chain, I can attest to the complexity of analyzing promotions. But more challenging is the pervasive misunderstanding among senior management as to the limitations of promotions and the duration of their effect. For example, I was often told by senior operations management that my promotions “didn’t stick.” Roughly translated, promotions with a stop date should continue to drive sales long after their benefits are gone. In reality, promotions are a means of interjecting another reason for trial. After the promo is over it is up to the retailer and brand to offer great products, price them competitively and to provide a great shopping experience to maintain some semblance of a post-promotional lift.
Further, promotional analysis makes much more sense if it is done within the parameters of a category-level promotional plan. Once the plan is in place promotion results can be measured within the context of the plan and adjusted if they under-performed against empirical benchmarks and objectives.
Unfortunately, many times the mentality of the retailer is to grab the promotional support money without first having a plan in place, which makes the post-promo analysis much less effective and essentially ad hoc.
I may have an inherent prejudice based on my employer, however, I’ll still take exception to item #5 in this article regarding the statement that, “Tools have not evolved since 1990.”
Seriously?!
I realize there are a boatload of retailers and CPG Brands that still handwrite POs, but that shouldn’t cloud what is available in the marketplace today for very competitive and even no cost options. Data IS available in real time, and reports ARE generated automatically. “Only 14 percent use a customer relationship management tool or budget management software.” Well, THAT’S the problem, boys and girls. Let’s get out of the previous millennium and go onto any of the dozens of vendor sites and give their free trials a shot. Watch a demo, invite them into your office and demand an affordable price and compelling ROI.
I sincerely hope that the level of challenges described in the article are mainly a reference to the “Frozen & Refrigerated Buyer” group. I do not think this is valid across retail generally. Where it is true, we should expect them not to be around much longer.
The first three complaints are about organizational dysfunction and have nothing to do with promotional analysis. Read “The Advantage” by Pat Lencione for a roadmap to organizational health.
The second three complaints are all about appropriate investment in technology and data analytics tools. These are no longer materially expensive investments. There is no excuse to be using manual processes or “tools from the 1990’s.”
Solving all 6 complaints requires an effective senior team and support of the board. If a company lacks either, they are unlikely to solve the issues or to survive.
Driving more efficiency often comes down to ROI calculations, such as:
1. Products with high baseline sales will yield higher ROI on a fixed cost promo investment because the same % lift moves more incremental units.
2. Products with high seasonal spikes yield higher ROI for the same reason as #1
3. New products with near-zero sales yield higher ROI because first-time trial buyers will convert to repeat buyers (as long as the product stays on the planogram)
4. Products that trigger purchases of complementary items yield a higher ROI for retailer, which benefits from a higher basket
5. Analyses that only consider item-level lift and ignore product line cannibalization will always over-estimate promo effectiveness
6. Deep discounts face exponentially steeper lift curves in order to pay out.
A point of contention since well before 1990 was the asymmetrical nature of trade spend. Because the CPG firm spends the promo fees, it must offset that cost with incremental sales. Because the retailer receives promo spend, it can double dip on fee income and incremental sales. However, the retailer is more likely to suffer low or no margin on the product during off-promo periods. For these and other reasons, trade promotions will never truly disappear.