The company that began pay-for-performance trade promotions is now offering marketers a way to pay their sales staffs based on supermarket sales.
Scanner Applications, partly owned by Nielsen Marketing Research, has created Scanner Reward. The service uses supermarket scanner-sales data to figure compensation for in-house sales staffs or brokers.
The company is talking to marketers including Procter & Gamble Co. and Johnson & Johnson, with plans to start testing the Scanner Reward service this fall and winter.
"Assuming you have manufacturers and retailers who want an Efficient Consumer Response strategy, the third part of the equation is the sales force, which is still compensated based on shipments to retailer warehouses," said Tad Washburn, senior VP at Scanner Applications, Cincinnati. "This brings the sales staff into alignment with everyone else's goals-moving product out of the store."
One of the biggest issues a scanner-based compensation system can address is the practice of diverting, in which retailers buy lower-price products in one market but ship them to another market for sale.
"If the products they sell to retailers aren't sold to consumers in their market, the sales people won't get credit," Mr. Washburn said.
He admitted marketers could use their own scanner data to determine compensation but noted Nielsen's Scantrack system doesn't cover smaller market areas. He also questioned whether marketers would want to spend the time manipulating the data to produce the results.
Scanner Applications' initial service, Scanner Promote, is growing rapidly, in part due to package-goods marketers' interest in ECR, Mr. Washburn said.
After executing 400 individual-market promotions in its first five years, Scanner Promote has already been used in 700 promotions this year. Two-thirds of the promotions are national, and the service has garnered a blue chip client list including CPC International, H.J. Heinz Co., American Home Products Corp. and Johnson & Johnson.