In difficult economic times, setting your brand/product apart becomes more important than ever (brand differentiation). Often, this is accomplished through in-store promotions via sampling, discount coupon offerings, and other brand incentive offerings. However, is this really the route to take when trying to generate a new or stronger (loyal) customer base and build a strong relationship with the retailers? Let’s look at some of the basic pitfalls of this type of approach.
In-store sampling or incentive discount offerings to those who are already shopping at a given retailer can inspire customers to try your product and, perhaps, ultimately switch to your brand/product. This may be well and good for your brand/product but, ultimately, does little for the retailer. It does nothing to enhance retailer customer base and therefore, does nothing to forward his ultimate end of bringing in new customers and new dollars and growing. In-store pet food solicitation merely switches current customer dollars from being spent on one product to another. The end result is simply a product swap and, in the case of lower margin from one product/brand to the next, perhaps evens a loss.
Word of mouth (WOM) advertising is generally agreed upon to be the strongest driving force in customer loyalty to a brand or product. In store marketing programs while they may encourage customers to temporarily switch to your brand and, even eventually stick with it, does little to reinforce the sort of grass roots brand recommendation/advocacy that is at the heart of WOM advertising. A customer who is ready and willing to switch brands based on one discount incentive offering or an in-store sample is not showing the kind of brand/product loyalty that is going to ensure a long term relationship with a manufacturer and is not likely to produce the type of WOM that builds a new customer base built on product quality and integrity. This type of customer - one is easily swayed to your product - one day can be just as easily lured away by a better incentive from another manufacturer at a future in-store promotion. In the pet food industry, where competition is fierce and new product lines are quickly put on the shelf and duplicated, an attitude of “what are you going to save me today?” develops and customer loyalty is fickle at best.
Finally, and just as importantly, no retailer/manufacturer trust is built through these programs. Again, few, if any, new retailer customers are generated and actual purchase dollars can actually be diminished. Further, trust in brands/products and retail stores are effectively built through loyalty and consistency. If a retailer recommends a product one week and the next week, sides with the in-store promoter (even if by merely by allowing the in-store promotion!), the trust that has been built by the retailer and confidence in a brand/product is lost. This can result in a loss of loyalty to the retailer on the whole and the customer simply following the “best deal in town” trail.