Sampling keeps you busy, but does it deliver results?
As we move into the key holiday selling period your plans for 2024 should be in place and your business gearing up to meet or exceed your targets. One tactic I continue to hear people talk about is sampling. With consumers shopping in stores and attending consumer shows like they did prior to the pandemic, this can be on the ‘to do list’ for many people in food and beverage.
If you have sampling in your plan for 2024, I have two questions for you:
Can you prove it increases the baseline sales of your product?
Do you know the full cost of sampling?
Moving baseline sales
Baseline sales are the volume your product delivers with no promotion and no sampling. As we have said before, a very important number for you to understand in your business.
You only get a return on any investment when your baseline sales increase after you reduce your price, pay for a loyalty offer, conduct an in-store sampling or any other trade spend.
We understand why people sample and I have heard all the lines…
When they try it, they buy it
If I can get the product in their hands or in their mouth they will buy
No argument from us. When you make the investment to go to a store, you will sell product. We would ask though, if you are selling to the right people and how many of them buy the next time? This is the growth in your baseline sales.
In store sampling attracts people. Unfortunately, they might not all be in your target market and you are only able to reach a very small percentage of the total consumers going through the store.
Many people like to sample when it is busy which makes sense. The more people who see the product and try it the better. It can also be a tough time to really get their attention. If the store is busy, they can be preoccupied and also in a rush to get out. We know many consumers see ‘demos’ as a chance for a snack or something for the kids.
If you conduct a 2 hour sampling and talk to 1 consumer every minute that is 120 consumers. Perhaps your baseline sales are 10 units per week in this store. You might sell 35 units during the sampling, which is great, an increase of 3.5 X regular movement. If you believe 20% of the consumers shopping in the store are in your target market you reached 24 people with your sampling. Chances are some are already your consumers and others were enticed by the sample or the reduced price that can accompany a sampling.
If the total store customer count is 18,000, your target market has 3,600 consumers shopping that store. Your demo only reached 120 out of 18,000 which is less than 1%. If we focus on your target market, you reached 24 during the demo of a possible 3,600. What could you do to influence the other 3,576 in your target market and grow your baseline sales more?
Consider the full cost of sampling
Your sales and marketing budget is probably never enough. You need to spend the money as efficiently as possible.
When you add up the cost of sampling you should include:
Cost of product (some retailers want you to buy it from them at retail)
Labour cost from the time you leave your facility until you return (or what you pay people to do this)
Cost of any promo materials you use or have printed to support the sampling
Fees stores charge (yes, this does happen)
Supplies such as cups, utensils etc.
Once you understand the total cost you can figure out the return on your investment. We created a simple spreadsheet to help you calculate the cost and return.
Download for demo costing sheet
One consideration is to explore the opportunity cost concept. Almost every food and beverage business owner tells me they are too busy. If you would tell us that what could you be doing in the total time you spent sampling? Could you focus your efforts on a different tactic that would reach the other 99% of your target market shopping that store?
Sampling does deliver benefits
If you take time while doing in store sampling to develop a good relationship with store staff and enroll them as brand advocates this can be a great benefit to your business. They are working in the store every week and they can be great salespeople for your products. This will have a positive impact on your baseline sales.
There are times when customers want you to do demos. They like activity in their store and you are providing free labour to help them. If you can improve your relationship with a customer, it can be worth the investment. Leverage your commitment to sampling into other opportunities such as holiday merchandising, promotions or a second display. These can pay dividends and help increase your baseline sales.
If your category manager is the person who contacts you about sampling, use the in-person connection to plant the seed about a cost increase or some space in a promotion. Sometimes it is tough to get their attention when you need something so take advantage of them contacting you.
If you do make the investment to sample your products in store, use the time to get feedback and learn about consumers. Perhaps you want to test a new flavour or understand if consumers would like you to work on flavour A or B. You can ask them. You also have the chance to get real time feedback on your product and your target market. If they tell you they are regular buyers these are your people. Learn as much as you can about why they buy and who they are. Leverage this in upcoming promotion activity.
Sampling can make you feel good. Two hours of consumers telling you they like your products is always a good thing. If possible, get testimonials. You can share these next time you meet with your customer or a prospective customer. Consumers talking about your product is more powerful than you talking about it.
Sampling can keep you busy and cost you a lot of money. If you do have to do it, make sure there is a return on the investment and you do everything other than sampling to drive those baseline sales.
FCC peer groups are a great opportunity for food processors to learn from each other and share their knowledge. People from across the country come together online to talk about what is happening in our industry. I have had the privilege of facilitating peer groups for FCC the last few years. I have met some incredible food entrepreneurs. If you are interested and would like more information check out the FCC link below or give me a call.
Where is Peter Speaking?
We have been working hard to put together a new video to promote the work we do speaking at conferences and events. Hope you enjoy the video!