For marketers who use direct mail sampling, it traditionally has been a "spray and pray" approach. They blindly give away numerous product samples through rental lists, hoping to reach the right consumer and increase their likeliness to purchase the product.
These programs are usually measured on metrics like how many samples have been distributed, which tells marketers nothing about how effective the program was in terms of customer conversion.
This approach to blind sampling does not leverage the latest targeting technology or best practices for personalized, relevant marketing. Here are five ways to stop losing money on sampling to help marketers use this technique to reach the right customer at the right time with the right message, and then measure the ROI.
1. Set a Clear Goal, and Track Relevant Metrics
Marketing is closely tied to business strategy. Before you start marketing planning, it's crucial to have a clear understanding of where you want to take your business in the upcoming year. Each of your marketing tactics (including sampling) should tie back to your key business objectives, and have a relevant metric or measure to give you an indication if the tactic is delivering on the specified objective. Depending on the maturity of the brand, the primary business objective most likely falls into one of three categories.
- Increase Consumer Engagement and Brand Awareness
New brands or product innovations normally count increasing engagement and awareness as a key business objective in the first couple of years after launch. The main objective is to have your brand included in a consumer's consideration set within the category. To meet this objective, brand managers should explore high-engagement sampling methods, which include a strong education component for consumers. A well thought out experiential sampling campaign or a direct-to-consumer in-home sampling campaign are the most effective tactics for educating customers.
For each campaign, marketers should track key metrics such as: percentage trial by new users, intent to purchase, and recollection of key marketing messages. Preferably, you would use a sampling methodology that can organize this by high-level demographic data, such as age, income groups, gender or geography, to guide future investments into the most lucrative consumer segments.
- Grow Share or Household Penetration
For almost all marketers, growing share or household penetration is an on-going metric they are measured on, regardless of the stage of the brand. At this stage, marketers should already have a good understanding of who their most lucrative target customers are, and should use sampling methods which are highly targeted to reach these consumers. It's important not to waste samples on consumers who do not fit within your brand's target customer group.
The most important metric marketers must track is the actual conversion rate (percentage of consumers who try the sample, and purchase the product for the first time). Marketers rather should look at the anticipated conversion rates of the sampling methods available, and pick the method that maximizes overall ROI.
- Growing the Category
This business objective is often reserved for dominant brands, which own a disproportionately large part of the market (40 percent to 50 percent or greater market share). At this stage, the brand has acquired a significant share of customers within their target groups, and is experiencing diminishing returns sampling to this group.
Similar to the previous objective, targeting is very important to ensure the you build new segments of customers. Many marketers who sample with this objective fall into the trap of using tried and true sampling methods that previously generated great ROI. However, when a brand has captured a significant portion of the market, it runs a high risk of sampling continuously to the same consumers, who are already loyal to the brand. Marketers must identify new customers segments they have not reached before, and target them with unique messaging to bring them into the category, and ultimately their brand.
Actual conversion is also the most important metric to track for this objective. It's important to measure the effectiveness of conversion of your new consumer groups, versus your performance on loyal customers, and align your budget per sample to generate a strong ROI.
2. Focus On the Perceived Benefit
Outside of proper targeting, marketers need to ensure they are sampling products that will actually entice the consumer to buy. It's important that the product has a clear perceived benefit over the competition—whether it's a noticeable scent, clear usage benefits, or a more convenient to use version of the product—to ensure consumers see the clear differentiation of your product relative to others in the market.
3. Size Should Be Just Right
This is tied closely to perceived benefit. Marketers must make sure that the sample provides consumers with enough uses to realize the perceived benefit. For example, if you market anti-aging cream that takes 14 days to see results, but the sample only includes enough product for 3 days of usage, the expected conversion on this program should be very low, as the consumer will never see the results of trying the product sample.
In situations your may not have access to samples with enough volume to deliver on the perceived benefit, consider bundling multiple sample units until it meets the usage threshold to see results.
Conversely, brand managers should not go overboard and provide samples well in-excess of the quantity needed to see results. Many marketers believe that sampling a full-size product will yield significantly better results. While receiving a full-size product may initially wow the consumer, it takes them out of the purchase cycle for one full purchasing period (or longer). This results in a lower conversion rate, on a higher cost-base of distributing a larger sample, which ultimately delivers a lower ROI.
4. Follow the Native Trend
Consumers are responding more favorably to native or contextual advertisements, across all marketing mediums. A 2013 study showed that native display ads are more effective than traditional banner ads, the former driving 52 percent more views and 18 percent higher purchase intent. The spending data is a strong reflection that marketers believe this to be true.
When brands sample their products aimlessly on the street, handing the items to whomever passes by, they slowly erode their equity in the minds of the consumer by cheapening the product as a freebie, with no context on how or where to use the product. Marketers must uncover contextual methods of sampling to ensure the products are positioned in a way that the consumer sees the immediate value of using the product versus seeing it as a free advertisement. For example, major laundry brands have begun sampling their detergent alongside clothing purchases.
5. Measure, Analyze, Optimize
Measure each and every sampling campaign to ensure it is tying back to your business objectives, and push your vendors to provide actionable data and analysis. Based on the findings from the data, continually iterate and optimize your campaigns to ensure you're maximizing the efficiency of each tactic.
Following these steps certainly requires more upfront planning, but it should yield much better results zoning in on the right customers and getting them a product that will delight them, rather than get tossed in the trash. This approach also requires constant monitoring, measuring and modification to the sampling program, but if your goals are awareness, growing the product category and increasing customer conversion, this level of diligence is well worth the effort.