One Blog |December 6, 2017 | POS Tracking Software

Distributor Point-of-Sale Marketing vs. Supplier Advertising — It’s All About ROI

Mark Fullerton

What We've Learned from Our Customers

In 2005, OnTrak’s first customer — a $100M beer distributor — told me that the only reason to use point-of-sale (POS) marketing was “because it worked” to maintain or increase market share.

When I asked why POS worked, I learned another new concept:

Shopper Engagement - At the place and time where buying is possible.

As time passed, I began to understand that most marketing and advertising experts stated goals were to build brand awareness and sometimes to increase retail traffic.

What struck me as odd was the omission of why it was important to do these things. It was almost as if shoppers’ awareness of a brand was the end-goal of marketing.

To this day, I’ve never met a distributor who is looking for their brand to be simply known. In fact, they’re looking for their brand to be SOLD.

When our customers talk to us about their POS departments, they generally tell us that their main business function is singular:

To Increase Sales by:

Attracting attention
Arousing interest
Creating desire
Building confidence, and perhaps the most important one,
Causing the shopper to take action. Or said another way — To stop shopping and start buying.

Another Version of the 80/20 Rule

It bears repeating that about 80% of beverage alcohol purchase decisions are made at retail.

Distributor vs. Supplier Perspective

Our customers know this, and it is safe to say they are often frustrated with their suppliers. It seems that suppliers aren’t always fully on board with the conclusion that shoppers are making 80% of their buying decisions at-retail. If so, then “at retail” is where 80% of the marketing focus and funds should be placed.

Apparently, distributors have noted that their suppliers are putting the lion’s share of marketing spending into “traditional” (primarily broadcast) outlets, rather than where the decisions to buy are actually being made.

On top of this, the suppliers have continued to scale back their support of the POS spending by the distribution channel. Supplier POS support dollars still exist, but supplier marketing allowances are increasingly harder to come by, and often the suppliers require reports detailing POS spending by brand, customer, and campaign.

Without modern POS tracking software technology, creating detailed reports can require days of work. And often the data on which decisions are made are inaccurate because the data is ‘off-line’ in some stack of paper, email inbox or sometimes in an Excel spreadsheet. Compiling all his disconnected data requires a lot of administrative work, which then delays chargeback reimbursement from the suppliers, and increases the distributor’s costs.

It’s no wonder that many distributors believe their suppliers have their marketing spending priorities backward.

OnTrak’s Perspective

Working with distributors all over the US, we’ve learned they understand that shoppers are looking for a persuasive reason to buy - where and when they are actually able to buy.

As a company dealing with over 100 US beverage distributors, we’ve become believers that persuading shoppers to become buyers — by using POS Marketing — is perhaps the most effective and most efficient way to develop a brand. This assumes you measure the success of the brand in sales of the brand’s products, rather than simply “brand awareness”.

It is possible, using POS management and reporting tools, to measure the correlation between POS and sales.

On the other hand, it is not possible to measure this correlation using any other form of marketing. Indeed, most traditional forms of marketing can only estimate the probable number of “views” or eyeballs delivered. With traditional marketing, the correlation between the marketing event and sales of a particular product is very vague.

POS Marketing is the tool of a sharp-shooter.

Traditional marketing is a little more than a scattershot in the general direction of where the target might be.

The Power of Localized POS Marketing Materials

Finally, it is our experience that distributors, using POS Marketing, are able to pinpoint and reach specific markets in ways that are virtually impossible by their suppliers using traditional advertising.

Distributors, for the most part, are able to identify certain ethnic and minority markets in their territories and create POS that almost literally compels sales in the retail locations where it’s displayed. POS digital tracking tools that include ethnicity tracking will ensure this.

It’s safe to say that US beverage-alcohol distributors are perhaps uniquely able to understand and leverage the power of localized POS marketing materials. It should also be obvious that today “your market” does everything it can do to avoid being inundated with the hundreds of messages on display every time the TV is turned on.

Conversely, shoppers, “your ideal market”, know there are many competitive choices in the beverage alcohol category, and these shoppers actually seek POS Marketing as a way to “organize and cut through the clutter” that confronts them at retail.

Can You Answer These Questions? Our Customers Can!

Using the latest POS Marketing Tracking, Management and Reporting Software, here are some of the questions OnTrak’s customers can answer at the click of a mouse:

Will this POS compel a shopper to purchase my products?
Will this POS build my suppliers’ brands and my revenue?
Will this POS demonstrate my support — both to my supplier and to the retailer — for the products I distribute?
What is the ROI of my POS initiatives?

Next Steps — Track, Measure, Manage

So, if you relate to anything we’ve said, you’re now ready to do what our powerful software is designed to help you do:

POS Tracking — to facilitate the automation, ordering, and work-flow of your POS department’s at-retail programs. Remember, POS Tracking creates the foundation for measuring the impact of your investment in POS Marketing.
POS Measurement — Once the data is ‘tracked’ or collected, the key to success is in the measurement of the data. You can't manage anything, especially POS, if you don’t measure it.
POS Management — And finally you can now, through integrated reporting and analytics, manage the success of your POS Marketing programs and campaigns.

Simple and Easy.

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