What you NEED to learn from Tesco if you want to grow your brand
Whichever way you cut it, Tesco are still the largest UK grocery retailer. They also have access to the most detailed customer data in the country. Up to now, they have not known how to use it. If they had, they would not have suffered the recent serious reverses.
But now they do. Very few retailers have ever undertaken the kind of root and branch reform that Tesco have, and they are taking it very seriously.
They realised, much later than they should, that the shopper really is King.
The moment they forgot that, they inbuilt the assumption that their shoppers had no choice. They prioritised selling more to basically herds of sheep, and were staggered when poachers arrived. to find that sheep actually had minds of their own, and simply followed my leader to other retailers.
The Tesco Reset View
Instead of tinkering round the edges that most of their competitors have done, Tesco took the brave decision to look outside of the ranks of the faithful, and actually base their listing on shopper needs, not just the pipe dreams of the financial guys.
This is what they came up with. The CPS score. I assume that this was what the Boston Consulting Group were briefed to do based on the shedloads of data that is available. I am told that they split products into 4 categories based on these scores by the brands we deal with, and that if you are in the lowest group, you absolutely cannot retain your listing.
Even if you have great turnover – such as Carling – but end up as being easy to substitute, you are absolutely bound to get de-listed.
Absolute sales value is not mentioned at all on this scale.
Merely increasing your sales before a review by running yet another discount will help your case not at all. In some cases it will actually harm it, since it will highlight the ease with which you can put up sales, and the equal ease with which customers will desert the brand afterwards. Core sales are a priority – not total sales.
What you actually need is to attract more customers who buy you for your brand values, and build these up, so the CPS score improves. In short, you have to build a brand. I gather that Tesco are expected to deliver encouraging results this week, and I for one, am not surprised.
They are aiming to create an environment that prioritises brands with real, and intrinsic loyalty, and not those selling off the back of being in the right place, at the right time, and undercutting the competition. In short they are prioritising loyalty above all. Not Clubcard, follow my leader to the deal sheep behaviour, but honest to goodness real live choice that customers actually value.
But how can you know if your brand appeals to sheep, or goats?
FREE dunnhumby data (yes I do mean free)?
Well, you can get this help if you are an SME (less than £6.5 million turnover). Tesco make available dunnhumby data that will let you see your score. This is not offered directly by Tesco but through third parties. Click here for details
If you are larger than this and you simply feel you need to know how the buyer views you, then this is a great. However, it is worth more than this. Your score in Tesco, would also be your score in other retailers. It is a shopper score, not a Tesco score.
Tesco have spent many millions building a score that goes straight to the heart of your consumer. Why would you not want to know this?
Marketing to Goats
Brands need to pay attention to this rating scale to understand what shoppers feel about them. A good CPS rating score ought to be a signal for rejoicing in discussions with other retailers, as well as in planning for growth and brand investment. A poor score should be a trigger to look at shopper issues before you invest further.
If your brand is showing up well, then getting more people in is a no-brainer. Discounting is, however, not the answer. Discounting decreases loyalty, since customers become used to the fact that as cheaper price is just round the corner, so promotion uplifts decrease. The normal response to this, deeper discounts, simply makes the issue worse. Moreover, the discount motivated shopper cruises from one offer to another. So reducing the CPS score as the playing field levels.
Typically you will need some discounting alongside shopper marketing support activities carried out in your core areas, revolving around your core customers, and what they see when they reach the core stores that supply them. Promotions give you volume, shopper marketing gives you growth.
Invest behind your best performing products to get the best long term ROI
There are a number of very accessible non-discount promotion techniques that also work very well, that are a must to understand. I do run workshops looking at these.
Increase your distribution in your core areas, around the stores, and to the shoppers most responsive. These stores need more stock and space, more signage and advertising to reach the easy to covert local population. RetailVitalStatistics insights tell you exactly where these key stores, and areas, are, and Core2Store, our sister company can implement new stores and increased promotion sales in these areas at positive ROI.
It is routine to get 30/1 ROI from activity supporting brands with a high CPS score, and tightly targeted objectives.
If your activity is not giving you this, is that the fault of the product, bleeding away triallists as fast as you put them on? Straight back here to Marketing Development, and put your investment behind better products. Or is it the fault of the type of activity you have selected to use. If you are building brands remember to invest in layers around your core stores, and multiply the impact.
If you don’t know what your ROI is, then it might be a great idea to keep your cv up to date. Some time in the near future it will come in handy. The pressure is on for measurement, and, as they say in the law, ignorance is not an excuse.
Contact firstname.lastname@example.org if you want a range of FREE views on how you can do better with Tesco giving positive ROI and growth all round.