Written by: Ashley Randall
If you are looking for a way to increase sales, gain new consumers, and increase customer value, running a CPG product trial campaign is one marketing technique to implement. You know that all consumers love receiving a great deal, so offering discounted or free products is bound to create positive revenue gains. But once you run the product trial campaign for a certain amount of time, how will you know if it is successful? Here are some indicators of a successful CPG product trial.
Whether you are offering discounted or free samples of one or several products, you will see an increase in sales almost immediately at the beginning of your campaign. You may be thinking, “how will my sales increase, if I am only receiving half or none of the profits?” Sales doesn’t always correlate to money. When it comes to retail sales, the goal is to move your products on and off of retail shelves as swiftly as possible.
This will increase your sales velocity, meaning the more product is being purchased by consumers on a weekly basis, the more retailers are going to make more shelf room in their stores. Of course, when your campaign ends, you will see a decrease in total sales over the next few weeks. However, your baseline sales should increase.
RELATED POST: What is Sales Velocity in CPG?
When it comes to CPG brands, keeping up with your baseline sales data will show you how successful one product compares to another. Baseline sales are the number of products sold, without a promotion. So when your campaign ends on a certain product, if successful, you will see an increase in actual sales and revenue.
This means that the consumers who bought your product during your product trial campaign loved it so much that they came back to purchase it again. You will not only see your baseline sales increase, you will also gain new consumers who are referring your products to their family and friends.
Product trials are one of the best ways to attract new customers, who will most likely refer your awesome CPG product to friends and family. When it comes to building an established brand and increasing sales, new customers are the heroes to thank. In the beginning of your business, new customers are your unofficial brand ambassadors, sales agents, and word-of-mouth personnel who influence others to buy your products. Once consumers return to buy more and more of your products, they turn into loyal customers who are constantly spreading the good word about your products to anyone they feel will benefit from them. The best part about referred customers is that it is not always a family member or friend of your loyal customer. It can be a Facebook friend, Instagram follower, or even a shopper standing in the same aisle as your customer.
Speaking of customers, we already talked about how it pays to gain new customers. But we haven’t covered the overall cost of obtaining them. So instead of measuring your customer lifetime value, you should measure every 3-6 months to get a realistic number. Here, we are going to use customer acquisition cost to measure 3 months of customer value.
Customer Acquisition Cost (CAC) is the amount of money it costs to obtain new customers. This gives you a numeric breakdown of your return of investment (ROI), seeing the difference of how much you spend versus the amount you receive in return. Ideally, you total the amount of your marketing ads and campaigns and divide it by the number of new customers you obtained within 3-6 months.
If you are a “show me what you are talking about person,” here is a formula that will help:
CAC = Blended New Customer Acquisition Cost
$ Total Ad Spend / # New Customers
3 Month Customer Value = 3 Month CV
(3 months after first purchase, what is a customer worth on average)
Now, why do we use these metrics as our guiding targets? Because it reflects if your product trial campaign is successful or not. If your ROI is higher, then your campaign was a success. But what if you find yourself spending more than what you received? Then that means you have an increase in CAC, and that can potentially harm your marketing budget. In fact, according to Business Wire, 66% of DTC companies and 54% of traditional retailers say increasing customer acquisition costs is their top challenge to accomplishing their 2022 scaling goals.
In order to scale and revamp your future campaigns, we need to know two things: What is a customer worth to us? And how much does it cost to acquire that customer?"
Sampoll recently announced a new customer loyalty program that encourages repeat purchases and higher customer value (CV), known as the “Receipt Upload Challenge”. This new program helps answer the following 2 questions during your campaign: “What are my consumers worth to me?” and “How much does it cost to acquire that customer?” New pilot partners in early Q1 of 2023 are expected to benefit from the new “Repeat Purchase” feature, and it comes complimentary for 60-90 days after the initial pilot campaign has lapsed!
Sampoll uses AI-powered chatbot “Sam” to collect real-time data and feedback from new customers, while educating them about your products. So instead of wasting your marketing dollars on obtaining any customer, Sampoll will use our multi-channels to target your ideal consumer, who will likely buy or try your product. In doing so, this program will help scale and optimize your CAC by lowering your overall digital marketing campaign cost.
If you are ready to see what Sampoll has to offer your CPG brand, book a demo with one of their sales reps.