To Demo or Not to Demo? That is the question...

In-store demos. Experiential events. Person-to-person marketing. Just saying those words to brand executives or brand managers elicits a range of reactions from them, including:

• “I hate managing demos. It takes so long, and it’s so tedious.”
• “My CFO is constantly questioning what we are getting in return for ($10,000 / $50,000 / $100,000) per month.”
• “Oh well, I have to do them. If I don’t, the retailer will disco my product line.”
• “I LOVE demos and events. We built our entire brand awareness program around them, which allowed us to be acquired by the top brand in the market.”
• “We are giving up on demos and events. It’s like a big black hole for money and time, and we don’t know what our ROI is.”

In a recent survey on industry issues done by Retailwire, they didn't ask any questions in the survey about demos – but the respondents volunteered opinions about them anyway. That is a pretty clear indication of how top-of-mind the issue is for retail marketers.

How is it that the same subject (demos and events) can cause such a varying range of emotional responses?

Glad you asked! Here’s my explanation:

1. It’s the most difficult marketing that CPG manufacturers can do. Why? Marketing to human beings is already challenging enough. To compound that, with demos and events you’re using human beings to market to human beings, for double the complication. And average brand ambassadors don’t naturally know how to be a finely-tuned CPG marketing machine. Managed incorrectly (like most companies do), the demo and event marketing process can be tedious – even painful. And if you’re an executive, running an expensive program without any management data is like flying blind… which no executive likes, as far as I know.
2. At the other end of the spectrum, for many types of products, demos and events (managed correctly) are the highest-sales-lift, highest-ROI type of marketing available. (In Costco, they are already #1. Across the industry, they are #2.) If your team is managing your company’s demo program well, you are likely to be one very happy executive.

Given that spectrum of difficulty and impact, it’s no surprise at all that there’s a whole range of emotional responses to demos and events. Demos and events are make or break activities, and the emotions are a result of how well your team is managing demos and events.

To paraphrase Lord Kelvin, one of the most important figures in the history of science (he's the guy the absolute temperature scale is named after): if you can’t measure it, you can’t improve it. Back in the 1800s when he said it, it was a really big idea. Today, it has become a universally accepted principle for engineers, scientists… and business managers. As an executive today, you need to have measurements and data to steer your decisions about how to tweak your program for optimum performance.

In general, in the world of TPM (trade promotion management, the co-op marketing done by manufacturers and retailers), retailers tend to have the greatest clarity and experience, because they deal with literally thousands of suppliers. On the other hand, the manufacturers tend to shoulder the bulk of the actual cost of providing the promotional activity.

It is not surprising, then, that retailers should have a strong opinion on the matter. For them, in-store demos mean additional “theater” – exciting activity in their stores that engages the shopper. It would be possible as a vendor to dismiss this by assuming that the retailer views demos as purely an upside, with no additional cost to them. But in reality, retailers’ and vendors’ objectives are in total alignment here. Retailers would be more than happy if demos resulted in MUCH greater sales for the brands doing them. The position of most retailers I’ve spoken to is that they sincerely wish that their vendors were doing more effective demos. Some retail chains even take this to an extreme: out of sheer frustration and a desire to “take the bull by the horns”, they take a strategic policy decision to have their own (presumably better trained) employees do all demos on behalf of their vendors.

For the vendors, securing distribution in such a retailer can feel like having broken into jail. They lose all control over the quality of the demos, and yet they are essentially forced to do them (or be eventually discontinued). With such a mindset, demos feel like a lose-lose scenario.

But a better solution exists: Brands can do better demos. And if a brand can substantiate (i.e., show data) that they are doing more than sending a warm body in with a table and a tablecloth, most retailers will gladly support them.

It is true that not every product lends itself easily to making a profit on demos. But it is even more certain than many products that could be demoed profitably currently are not.

Several factors will affect whether a demo will be profitable:

• store traffic,
• how general the appeal of the product is (e.g., a gluten-free product might move fewer shoppers than, say, a protein shake),
• the demographics of the shoppers in a particular store,
• the selling price,
• whether the product is couponed/on sale,
• whether the demo was promoted via social media,
• whether the product can be tasted at the demo,
• the cost of producing the demo (e.g., having to heat and prepare frozen items),

and several others.

But far and away, the single most important factor is the ambassador. How well do they know the product, the value proposition, and how to tactfully encourage sales? Brands need to have a straightforward way of measuring and monitoring these factors to make sure that demos give them bang for their buck.

For many brands and their products, demos are the only viable way that their unique value proposition and/or differentiation can be communicated to shoppers. Nothing rises above the noise in the marketing world better than an informed ambassador having a friendly, educational, face-to-face conversation with a prospective consumer.

Retailers: I believe that going forward, it is in the best interests of all brick-and-mortar retailers to work together with their vendor base to produce more engaging, more productive demos. The rise of online fulfillment means that brick-and-mortar stores need to exercise every unique advantage they have. In-store demos and events are a logical way to increase shopper engagement in a way that is simply not possible online.

Brands that currently don’t love demos must take an honest look at whether the problem is that their products really don’t lend themselves well to being sampled in stores, or that they simply don’t manage demos effectively enough. Assuming that their product can be viably demoed, in order to unlock the potential of demo and event marketing, the onus is on brands to make a commitment to:

1. increasing the quality and performance of the ambassadors who are representing their products in the store, and
2. the methodical measurement and optimization of the execution of their program.

The challenge, as with everything these days, is to achieve both of the above cost-effectively, to help optimize the marketing ROI metric. But given the increased availability these days of tools for both of these tasks, the more challenging factor is really the commitment part.

Brands that embrace this opportunity will greatly solidify their businesses, their relationships with their retail distributors, and their relationships with consumers.

We’d love to hear your comments.