Optimizing Marketing at the Point of Sale

The point of sale is the key consumer touchpoint for many brands (especially in consumer goods) that reflects the moment of truth in a consumer’s purchasing process. A large part of marketing investment focuses on converting consumers at this critical point.

Marketers have developed an extensive range of creative mechanisms to reach customers at this touchpoint. The challenge, however, is to leverage these activities more effectively. Among the hurdles:

- Point-of-sale marketing is still largely informed by an emphasis on the type of channel. Enhancing this channel knowledge with better shopper insights will create more effective connections with customers.
- POS program mix planning is often very reactive, dictated by past activities and highly influenced by competitors. This results in a lagging POS marketing effort, low creativity, and most important, a disconnect from the brand strategy.
- POS marketing plans are rarely derived from the strategic brand plan and its related brand objectives, whether due to their reactive nature or failure to integrate planning across marketing and sales.

There is a practical and impactful way to overcome these hurdles: First, align POS programs with core brand objectives. Second, execute programs in store formats/trade channels that enable the greatest impact.

The POS/Brand Link

Marketers should avoid the pitfall of selecting marketing programs based on what has worked in the past. In order to link point-of-sale activities to actual brand challenges and opportunities, marketers should link each POS program to a primary brand objective through the brand purchase funnel. For example, events or point-of-purchase merchandising are valuable for building brand awareness and affinity, and 1:1 can be very effective for trial generation. But if the key issue is that consumers purchase the brand occasionally, then a “collect and get” mechanism at POS will be much more effective.

Here’s how to create the linkage:

Analyze your brand’s situation and define the main objectives based on purchase funnel stages.
Develop a complete suite of planned POS programs and determine which stage of the purchase brand funnel each program supports.

Compare the budget allocated to these programs to the actual brand objectives that you have defined and rebalance as needed.

Determine the ‘Bang for Buck’ Factor

Marketers often focus POS programs (and budget) on clusters of stores that show high volume sales (current and potential) as well as a shopper profile that is in line with the brand’s target.
But this approach does not consider the fact that each program requires that certain conditions exist at the point of sale in order to be successful.

The store’s physical characteristics and the typical shopper behaviors, for example, are important to consider. Physical characteristics can include such variables as size, level of standardization, relevance of category for the store, and share of regular visitors. Shopper behaviors range from time spent in store, openness to receiving messages in store, to key category driving store visit. Since these criteria differ among store types, a specific POS program will be more effective in one store than another.

To get started:

Define the relevant criteria that qualify store physical characteristics and shopper behavior for the specific product category.

Based on these criteria, define the requirements (in terms of physical store characteristics and shopper behavior) for each program to be successful. Identify which stores (or clusters of stores) are most likely to have these conditions and which are most likely to be effective for specific programs.

Explore potential

As a pragmatic starting point, address the following questions for every single activity at the point of sale:
- Is this program related to a clear strategic brand objective?
- How do we measure the return on objective?
- Are we executing this program in the most effective store environment? If there is not a clear answer, then there is opportunity for improvement.

The end result of applying this sort of thinking is a POS program that is far more effective in supporting the brand and the business -- pragmatic and powerful at the same time.

Source: https://www.prophet.com/thinking/view/645-optimizing-marketing-at-the-point-of-sale