I recently shared an article which explained how to set powerful marketing and shopper marketing KPIs. Many people seemed to find this of value, and asked a question: how do you know you’ve got your KPIs right? After all there are lots of options, and setting too many shopper marketing KPIs brings its own problems. What are the biggest mistakes that people make setting shopper marketing KPIs and how can you make sure you have avoided them? (By the way, 99% of this advice can be applied to creating ANY KPIs!)
Why are shopper marketing KPIs important?
Most people I meet seem to appreciate the value of KPIs to a large extent. But then again, when we run workshops with clients, and I announce that we need to run a session on shopper marketing KPIs, there is often a collective sigh or groan! It appears that KPIs aren’t many peoples’ favorite part of the planning process!
And I get that: there was a time that I felt the same way. So, before we go any further, let’s just remind ourselves of why KPIs are so important, especially shopper marketing KPIs, and why it is worth putting some extra energy and effort into setting powerful marketing KPIs
Join our Disruptive Shopper Activation Masterclass – click here for details and booking
KPIs help measure performance
So obvious, it hardly bears mentioning, but I include it for completeness. KPIs help us understand if we have achieved what we wanted to achieve, or not. Shopper marketing KPIs can help us focus on particular parts of our business performance and ensure that we are measuring the things that matter. Without standards or targets, it is difficult to measure performance of any type!
KPIs set (and communicate) the direction for all activity
KPIs send powerful messages to everyone in the business. This goes for any KPI, of course. They say ‘this is important’. Want your team to focus on a thing? Link it to a KPI! Even better, link that KPI to their performance bonus: that will definitely get their attention! If (as so many corporate vision/mission statement imply) people are your greatest asset, then guiding their activity in the right direction with well-crafted KPIs is critical to getting the most out of this valuable resource.
KPIs empower your team
KPIs not only set direction, they also empower your team to take actions. KPIs tell your team that actions that lead towards the KPI are probably desirable: actions which go in the opposite direction are probably less desirable. This is a great way of creating alignment too: if we can all agree on a KPI, then we can all agree (to some extent) on actions that achieve that goal.
KPIs help identify performance gaps
Most KPIs focus on the outcomes of activity (did our sales increase, for example). That’s valuable for sure. But all that does is tell you where your shortfall (or excellence) lies. But really good KPIs can explain why the performance was bad (or good). That helps us learn, and therefore remedy, the situation. That reduces the chances of poor performance being repeated (and of course increases the chances of good performance being reproduced).
Join our Disruptive Shopper Activation Masterclass – click here for details and booking
So it appears that getting KPIs right have a number of valuable benefits anywhere in the business. And in the area of shopper marketing and in-store activity, that is definitely the case. Yet when I spend time with clients, the shopper marketing KPIs that are set tend to be generic. Team after team, brand after brand, the shopper marketing KPIs we set tend to be the same. And while some KPIs are common to many situations, many are not. So what are the most common mistakes I see in setting shopper marketing KPIs? And how do you ensure that you have better ones?
Shopper marketing KPIs don’t reflect the strategy
By far the biggest issue we see with KPIs is that there is little or no connection between the KPIs that are given to teams and the strategy of the business or brand. This is typically caused by a following a strategic planning process that doesn’t include KPI setting. When we work with clients to develop shopper strategies or integrated strategic plans (and even when we train our Shopper Activation Wheel™) KPI setting is hard-baked into the process. Never create a shopper marketing plan without creating shopper marketing KPIs for it.
Shopper marketing KPIs are static
In such organizations, shopper marketing KPIs are static: they don’t change year after year. Take a step back: when did you last review the performance metrics for your team? Are the KPIs you use for all activities the same? Are they the same as last year? Five years ago? Has your business changed in the last few years? If that answers to both of these questions is ‘yes’ – then you probably need to update your shopper marketing KPIs!
Shopper marketing KPIs focus on lagging measures, not leading measures
I referenced this earlier, and it’s a very common problem. KPIs can be split into two types: lagging KPIs, which measure the outcomes; and leading KPIs, which measure the inputs. For a shopper activation activity, for example, a lagging KPI might be a sales uplift. A leading KPI might be the number of displays that were set up. Test your team’s KPIs by ensuring that you have a balance between lagging and leading KPIs.
Shopper marketing KPIs measure what is easy, rather than what is valuable
I guess this is understandable. It is also highly prevalent. Shopper marketing KPIs are linked to things we can easily measure. At least we are measuring stuff, but is it the most valuable thing to measure? This situation can be dangerous. What happens when a business performs well against a ‘wrong’ KPI? The business is encouraged to do more of the ‘wrong’ things! What if we had a strategy that was designed to drive penetration. But our KPIs only measure sales uplift? If we measure sales uplift, but not penetration, then activities that deliver high sales uplift will be favoured and repeated. But did those activities drive penetration? Who knows!
Join our Disruptive Shopper Activation Masterclass – click here for details and booking
Shopper marketing KPIs aren’t balanced
Every KPI has unforeseen consequences. This is equally true of shopper marketing KPIs. If you task a team to deliver a certain number, they will. Often at the expense of something else that might be equally, or more, valuable (but maybe is harder to measure?) If we target sales uplift, then there is a danger that long term brand building activities might be reduced. A client recently set very high standards for in-store execution. The implication? Distribution dropped! Why? Sales teams chose to focus on stores where they could easily achieve great execution and put extra time into those stores. Less time was spent on poorer stores (ironically where more focus was needed, and the original focus of the KPI!).
Fortunately, with a little experience it is possible to predict the unforeseen consequences of your KPIs, and remedy these by adding a balancing KPI (which is what we do in our strategy and planning workshops!)
Shopper marketing KPIs not connected to your objectives (or not having good objectives in the first place!)
Recently I was working with a client who had a objective to drive penetration. They created huge numbers of activities to deliver trial, and measured trial rates as a key shopper marketing KPI for every activity. But penetration didn’t rise. Why? They were inadvertently creating a retention problem. By pushing too hard to drive trial, they were getting loads of shoppers to try the product. But most of these were unlikely to stay with the brand, as they weren’t the brands’ target. Marketing KPIs need to match the strategic focus on the brand and be linked to the objectives that were set. Of course, this problem also occurs when the original objective isn’t specific enough. If the objective is to drive penetration (rather than within a specific group of consumers) it is likely to lead to KPI confusion.
Join our Disruptive Shopper Activation Masterclass – click here for details and booking
All of these mistakes (and many more) can be avoided by doing two things. Firstly, ensure that shopper marketing KPI setting is part of your strategic planning process, and is integral to your activation process. Secondly, follow the engage KPI setting process, detailed here, to create better KPIs for everything you do.
If you see the vaue of having better shopper strategies, and having your strategies and plans integrated across all of your commercial teams (marketing, category, shopper and customer): if you want to learn more about our Shopper Wheel Activation Process™ or want to lift the capability of your team to become more shopper-centric, get in touch now and we’d be happy to give you a free consultation to help understand your situation and identify ways to improve the way you work. Or you can check out some examples of our training programs here.
Join our Disruptive Shopper Activation Masterclass – click here for details and booking
Image: https://www.mechanicalcaveman.com/