Using Data to Increase the ROI of your POS Marketing

I’ve spent a good bit of time over the past few weeks reviewing the amount of data that beverage distributors are gathering about their retail or shopper marketing initiatives.

POS Marketing Spend vs. ROI

From a financial perspective, a quick review of this data makes it clear that beverage distributors spend millions and millions of dollars annually on producing, inventorying and placing both temporary and permanent Point-of-Sale (POS) materials.

Temporary POS materials include for example: paper or vinyl signs and menus. Permanent POS materials include for example: neon signs, mirrors and tap pulls; as well as product samples. The temporary POS materials may be either produced in-house, outsourced to a third party printer, or purchased directly from the supplier. Permanent POS is purchased from the supplier or a certified POS provider and inventoried in a warehouse. But no matter the POS type or the source, it all costs a ton of money.

The US beverage market is about $1.3 trillion annually, so it shouldn’t be surprising that many beverage distributors’ annual sales figures exceed $100 million and there are a number of beverage distributors whose annual sales are in the billions.

For the investment made by beverage distributors in their POS marketing initiatives, it looks like a lot of revenue was generated.

But here’s my question:

How many of these distributors actively capture their POS marketing spend data, and then use this data to help them determine the ROI of their POS marketing campaigns?

Our experience says that not many of them do.

There could be many reasons why they don't, but the one we hear most is that many distributors don’t know that the POS cost data to plug into a formula to calculate the ROI is readily available.

In some cases it’s a matter of historical perspective. If calculating ROI on POS is something that has rarely if ever been done, it tough to shift to a perspective of now it can be done; and done easily.

Big Data is a Big Deal!

According to an IBM study (Understanding Big Data) released in 2012, “Every day, we create 2.5 quintillion bytes of data – so much that 90% of the data in the world today has been created in the last two years alone.” (While the contents of the IBM report are not related specifically to the beverage industry, it does point out that having Big Data is a Big Deal!)

Today, OnTrak’s POS/Marketing Communications software collects a significant amount of POS marketing data. When this POS data (including costs) is correlated to brands, products or customer sales information it can yield valuable, actionable ROI information that enables post-POS campaign analysis. This analysis provides predictive capabilities  to forecast which of your upcoming-POS programs are most likely to produce the desired business results.

In other words, with OnTrak, you now have the tools to help determine which POS is likely to provide the optimal sales lift.

OnTrak’s Perspective

In previous blog postings, we have discussed the reasons for the increased focus by consumer goods companies (including beverage) on POS advertising. It is safe to say POS continues to increase in importance in so far as providing brand and product sales lift.

However, if you’re not using the available POS data to establish the link between your POS programs and product sales results you’re missing out on perhaps the best method for optimizing the ROI of your at-retail advertising efforts.

The only way to make the best use of the potential of your POS is to know what has the greatest impact at the best cost. In light of increasingly shorter product life cycles and ever-changing shopper behavior, it is a more-than-worthwhile exercise to track, measure and manage your POS and determining its ROI — it’s vital.

To learn more about OnTrak Software, click this button: