One Blog |August 5, 2010 | POS Tracking Software
Measuring the ROI of Your Marketing At-Retail Initiatives
In this post, we will give details on what needs to be done to evaluate the return on investment (ROI) of your Marketing At-Retail efforts.
We’ve already discussed the differences between advertising and promotion in a previous blog — but it’s worth repeating that there are two key advantages that point-of-sale (POS) promotion has over advertising:
#1 — POS materials have an almost immediate impact on sales; and,
#2 — It is easier to measure the ROI of POS materials vs. advertising.
Order Entry Systems
Alcohol beverage distributors typically have sophisticated order entry systems at the heart of their business. Data is entered into these systems by their sales representatives. Reps check the retailer’s shelves to determine the inventory needed to avoid an out-of-stock condition. Sales reps often have laptops, or smaller hand-held devices, to assist them in this activity. Over time, demand patterns, by customer, brand and date emerge based on the sales data gathered at the retail location. Distributors who are armed with this data will know how much of a certain item will likely be purchased by their retail customers for any desired time period.
POS Order and Tracking Systems
During these same sales calls reps will typically discuss and order POS marketing materials (signage and menus, for example). Promotional objectives, including price and type of POS materials are selected and configured on-line and transmitted to the distributor’s graphics department or sign shop, using the same mobile technology used to create the weekly product order.
Because distributors provide the lion’s share of the marketing at-retail materials to retailers, both the POS promotional data and the sales data are easily captured for comparison and analysis. The Vice President of sales for the distributor no longer has to wonder, “What did we get for the $30,000 worth of banners we placed at BW3’s last year,” or, ”Did we actually increase our market-share by providing our customer with $850 worth of menus?”
Return on Investment Quantification
Electronic order entry and POS ordering and tracking systems help improve a distributors marketing at-retail ROI in three ways.
- Since data is entered for by the sales rep for both products and POS during the face-to-face call with the customer, survey and data entry costs are slashed or almost entirely eliminated.
- Just as an electronic order entry system reduces data entry errors, an electronic POS ordering system reduces or eliminates data entry errors from the customer’s promotional materials orders. Considering that a single paper sign costs the between $35 and $60, eliminating sign shop reworks provides significant quantifiable benefit.
- Electronic POS entry and tracking reduces the time from the POS order to the placement of the POS materials in front of the customer. Some distributors have cut their POS time-to-market by two or more days. Since price is often a key factor in driving up retail alcohol beverage sales, the distributor who gets their POS to market first can capture market share from competitors.
In our quest to measure the ROI of marketing at-retail campaigns, an electronic POS system can quickly generate reports indicating the correlation between POS spending and sales. If a promotion is producing less than favorable results, it can be modified, enlarged or replaced quickly until the desired sales targets are met.
The ability to measure and compare POS spending to revenue by brand, by customer or other criteria and make adjustments is invaluable. An electronic POS tracking and management system provides the requisite tools for distributors who need to provide accurate cost accounting to ensure marketing allowances are properly compiled for complete and rapid recovery of available supplier bill-backs.
By integrating order entry and POS data, distributors will have the business intelligence and data correlating capabilities to analyze the impact of their marketing at-retail materials — making the measurement of POS ROI another powerful weapon in their competitive arsenal.
— Mark Fullerton