Marketers are squeezed by an empowered consumer, a controlling retail channel, and, on top of it all, a lack of predictability in the impact media truly delivers. No wonder they are increasingly focused on return on investment and are zeroing in on where they can best measure results: at the point of sale.
There is hope for those who focus on influencing behavior -- that's right, how people act vs. what they think -- as consumers travel along that path to purchase, known as The Last Mile. And there are strong odds for success if you understand the interplay between three key relationships:
1. Between your brand and your consumer
How do your potential buyers move through their day-to-day lives? Where does your brand -- or your competition -- come into contact with them? Where could it? Marketers must identify the most powerful moments to intervene.
"Get Hairapy" launched Unilever's Sunsilk brand and capitalized on insights around its key prospect. The 20-something female target (nicknamed "Katie") was cynical about marketing, but was looking for more than just functional help with her hair. Katie sought help with her life dramas -- friends, boyfriend, job, dating, money. Could a shampoo offer her that?
The key to one of Unilever's biggest and most successful launches ever in the hair-care category was understanding Katie, how she moved through her day, and where one could make meaningful connections. The "Hairapy Guys" allowed Sunsilk to enter her space, in her language, and on her terms. The marketing helped her not only laugh away her hair problems and life dramas with honest opinions and style tips, but it communicated with her at points of contact which proved real understanding: in bars and restaurants, when she was surfing the web, walking on the street, and at point of sale.
The brand understood Katie's attitudes, perceptions and real life. It created the kind of dialogue through which special relationships are made.
2. Between your brand and your key retail customers
Retailers hold tremendous leverage in the relationships shoppers have with your brand. CMOs must investigate the relative strengths of each key retailer as well as their individual brand propositions and their category and market challenges. CMOs must also build marketing plans in such a way that considers the needs of their retail brand, and, ultimately, they must create programs that contribute to retailers' and their own businesses.
Some retailers are extremely sophisticated and know what makes their shoppers tick. Others lack the discipline or capability to build the kind of experiences that drive shopper loyalty. So it's no surprise that marketers who build their business as well as that of retailers will enjoy true advantage and partnership with the consumer.
There are endless examples of marketers who have created shared programs with their retail customers so the overall relationship benefits. When Levi's created a new brand exclusively for Wal-Mart, the retailer was able to leverage the credibility of the Levi's name, and Wal-Mart provided Levi's with an unmatched volume opportunity as a means to jump-start their new brand.
That was a win-win program.
And how much mutual benefit will come from the exclusive relationship between Apple and AT&T with the recent launch of iPhone? AT&T will benefit from a rapid infusion of ultra modernity -- not to mention mass usage on its network. IPhone gets a powerful, world-class network with a sprawling chain of retail outlets. This arrangement should be so positive that, in the end, it may be difficult to answer who is the marketer and who is the customer.
3. Between shopper and retailer
I have lost track of how many consultancies and industry groups monitor the percentage of people who make a purchase decision at the point of sale. I believe it was McKinsey & Company who noted that approximately 70% of purchase decisions are made at the shelf -- regardless of what the consumer was originally intending to buy.
An in-store study we did for one of the largest global cereal marketers investigated how shoppers relate to a product display. It discovered 37% of consumers walked by displays without even looking at them; 32% looked, but did not bother to stop; 4% stopped, but did not buy; 27% stopped, shopped and bought in the category.
The study pinpoints seven critical moments -- from category visibility to checkout -- that lead a shopper to purchase. Barriers are at each step and involve everything from planogram and store design to product placement, packaging, signage, pricing and shopper demographics.
There are ways to understand how purchase decisions vary by category, geography, and gender. And once you understand this, you can build media-spend models that are based on behavior as opposed to traditional approaches, which dump money into broadcast.
Marketers today must find ways to build unique relationships with consumers and with the retail trade. If these relationships are founded on real understanding and commitment, they will see brand value rise.
Rick Roth is global CEO of OgilvyAction, the worldwide brand activation arm of the Ogilvy Group. He previously served as president of Ogilvy Los Angeles, where he helped attract new clients such as BP and Miller Brewing.