Two early questions I get asked by clients who are just putting their toe in the water with shopper marketing are “How much should I budget overall?” and “How do I allocate the funds once I have them?”
There are a lot of factors involved in determining how much money to budget for shopper marketing: where the money is coming from (i.e. trade or brand marketing) and how much you’re likely to get from those sources, whether there is strong support for shopper among senior management, how many accounts it’s important to engage with. There’s no one formula or magic number for all size companies and situations. But here are some guidelines that might help with both questions:
As a general rule plan to dedicate enough money to cover several accounts with more than one program planned for each one. You can’t really judge the efficacy of shopper marketing by executing only one or two programs any more than can judge the efficacy of advertising by doing one or two ads. How many accounts you can cover and how many programs in each will be determined by the total budget but with smart planning and reasonable expectations you can plan and execute more than one program in several accounts for well under $1 million dollars.
Begin by dividing up the dollars in proportion to volume. This is really just the starting point because the biggest players also tend to be the most expensive (and demanding) to work with. Participating in a single, high profile Walmart-driven activity can cost $2MM!
Look beyond the obvious. If you don’t have a $20MM budget or don’t want to blow the whole budget you do have on one program or one account you’ll need to shift funds away from those big ones. You may even decide that it makes more sense NOT to plan for the big boys until you have more funds and more experience. Here are some things to consider when making those shifts:
Where is the greatest opportunity for growth? Over-investing in growth accounts can be a smart use of shopper marketing funds.
Who will deliver most on value? You might be able to generate the same volume in 3 or 4 “Tier 2” accounts, for less money. And they’ll generally give you more bang for the buck in terms of cooperation, assets and execution.
Which accounts are known to execute well? Some are definitely better than others and the program won’t do well if the display only gets up in half the stores.
Where do you have good relationships? It may not be in a big volume account but you’ll get the ROI and can work out any kinks in the program before moving on to those who are fickler.
Consider activating on the banner level. Going to the banner level can break the Krogers of the world into more digestible pieces.
The good news is that most individual shopper marketing programs cost considerably less than an FSI, national sweepstakes, or in some cases print ad. So a budget that would cover one national program might cover two or three or four shopper programs (Walmart notwithstanding). Multiply that a few times and you’ll cover a few accounts as well.