U.S. food prices surged by 11 percent last year, marking the largest increase since the 1980s. While the rate of inflation has gradually calmed down since its June 2022 peak, rising prices remain a significant concern for retailers and consumer packaged goods (CPG) brands. Given the possibility of a recession, it may be tempting to cut marketing spend, but companies must remain vigilant in maximizing the efficiency of their marketing efforts, including omnichannel and promotional campaigns. In the face of rising costs, retailers and CPG brands need to implement the right strategies to prioritize customer satisfaction and loyalty while meeting consumers’ value expectations. At the same time, they must target audiences at scale and preserve their bottom lines to achieve brand key performance indicators efficiently.
Retarget Customer Behavior
Retailers and CPG brands regularly collect customer behavior and preference data through various channels such as purchase history, social media interactions, loyalty programs and in-store interactions. They can then use data and analytics tools to identify patterns and trends to gain insights into customer behavior to re-energize campaigns.
This rich data can help brands better understand who their customers are and how they differ from one another to create more targeted omnichannel campaigns speaking directly to each segment. Understanding unique needs and preferences means brands can develop more personalized promotions while delivering them through the most cost-effective channels, increasing engagement and loyalty and ultimately driving sales and revenue.
Re-Evaluate Pricing Strategies
By better understanding customer behavior using preferred data and analytics, such as how customers make purchasing decisions and what motivates them to buy, brands can ultimately increase the likelihood of a sale. The next step is to monitor the performance of their campaigns and adjust them as necessary.
Teams that are tracking their products’ performance and comparing them across time can identify patterns and/or changes that could give them a leg up on inconsistencies ahead. This can help brands determine which products or categories can sustain higher prices and which require promotional pricing.
By tracking responses to different pricing strategies for a particular audience segment, brands can determine the level of price sensitivity. For example, if a brand runs a promotion with a 20 percent discount and sees a significant increase in sales, it may indicate that the audience is price-sensitive.
Brands can also analyze purchasing behavior to determine how price-sensitive a particular audience may be. For instance, if customers in a particular demographic or geographic location tend to buy products only when they’re on sale or with a discount, it may indicate that they are price-sensitive.
The goals for customer experience improvements like these will vary depending on specific business objectives. Some of the best, tried-and-true metrics include:
- Net promoter score, which provides a simple and clear measure of customer satisfaction and loyalty;
- customer lifetime value, which measures the total value a customer is expected to bring to a brand throughout their relationship;
- conversion rate, which measures the percentage of visitors to a website or store who take a desired action, such as making a purchase or signing up for a newsletter; and
- A/B testing results, which measure the impact of changes made to improve the customer experience, such as changes to the website or store layout and dynamic pricing.
Data and analytics are the most effective tools for retail and CPG brands to succeed with omnichannel promotional campaigns. By leveraging data to understand customer behavior, optimize promotions, predict demand, and measure campaign performance, brands can improve profitability and stay ahead of persistent inflationary pressures.
Matt Antal and the Quotient team equip CPG brands with powerful promotional strategies to drive their brand KPIs. To learn more about Quotient’s approach, reach out to us at [email protected].
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