The demonstration industry has grown in size, importance and sophistication in the last decade, but improving the quality of the end product -- the in-store demo -- continues to be a challenge.
"Brokers, retailers and marketing companies are pulled between what demo companies can realistically accomplish and what manufacturers ask of us," said Anne Murphy, director of promotions management at Mass Connections, Anaheim, Calif. Mass Connections was one of several national marketing companies that took part in a roundtable discussion here at the annual convention of the National Association of Demonstration Companies earlier this month. The gathering drew representatives from 105 companies and set an attendance record. The theme of the roundtable discussion, "Unification Through Communication," understated the scope of the discussion. It covered such subjects as access fees that retailers charge manufacturers to do a demo, possible standardization of reporting on a demo, creating software for demo companies, and the basic nuts and bolts of the in-store demo itself.
Robert Lieberman, NADC president, said, "Demos are very viable stacked up against every other form of marketing done professionally in a quality manner." To improve the quality of in-store demos as perceived by consumers, manufacturers and retailers, he said, NADC has appointed a quality task force to address the issue. Meanwhile, the panelists at the roundtable tried to come to grips with some of the issues. Here's what they had to say:
If the NADC can stand behind its standard quality policy, it will enhance the organization. An initiative for technology is the next area. There is no reason why we cannot have computers talk to each other. This convention has taught me that the demo industry has matured at a fast rate. We are duplicating efforts. We are going to try to analyze every process we do to determine if someone is doing it more professionally.
Six years ago, we only demo'd new products. Through tracking we realized that we were achieving a 10% to 15% redemption rate on coupons distributed at point-of-sale, compared with a 2% to 3% redemption rate for coupons distributed in freestanding inserts. About a year ago, Nabisco implemented a sampling program that went beyond new products to include core brands such as Chips Ahoy and niche brands such as SnackWells and fat-free Newtons. This year we are beginning to better track in-store activity. We are coming up with national lists (that include) where sampling is taking place and where it is not. We can see an increase in sales. There is a basic volume jump on brands sampled. The most important thing is the repeat purchase. Once the customer uses the coupon, will she be back in two weeks to buy that item again? Instead of just handing out coupons and samples during demos, we are trying to have raffles or sweepstakes at the tables to draw more consumers to our particular sampling.
One area of reporting and communication that may become necessary is to maintain a profile of individuals who do the demos, where possible.
I heard of a situation where a demonstrator called the manufacturer to say he didn't think he should do a toothpaste demo because he has no teeth. Should a bald person demonstrate a hair product? If possible, we should place someone to demonstrate who fits the profile of the product. That should please the manufacturer, which is our biggest concern. You can't just have Ken and Barbie doing the demos, but you want people with a basic knowledge of the product and who have read the manual. The manual should be kept to two to three pages in length. No matter how experienced a demonstrator may be, if he or she doesn't understand the particular product being represented, it is a waste of time to be there.
To improve productivity in this industry, we collectively need to understand what we are asking the in-store demonstrator to do. By understanding that, we will provide our clients, whether they be brokers or manufacturers, with higher quality service or products. Start motivating the sales force. Create incentives. Create ways in which to improve the quality of what is going on in the store. Send out a clear signal to the front lines that what the demonstrators do and the quality of what they do is important.
There are wasteful practices that persist in the demo industry: short-notice assignments, last-minute changes, late deliveries, inadequate stock at store level, in-house agencies that do not deliver value, outrageous store fees for less than professional fulfillment. In spite of all this, we have to continue to do the right thing every day, every store, every event. If we do, sooner or later the worm will turn and the people that pay for these services will realize they need to seek people who can deliver these services professionally. In terms of increasing the value of our services to our clients, I suspect the greatest frustration has to do with unevenness. We have to consistently deliver quality. We cannot guarantee sales, but we can guarantee that every customer got the message we were sent to deliver, got the sample and the coupon. That would go a long way toward convincing the people in the ivory towers that the best way for them to spend their money is not on billboards, on television or in freestanding inserts, but in hiring motivated, trained sellers who will move cases out of the stores. The demo gives the manufacturer the greatest cost-effective opportunity to win friends for his product.
We have seen a dramatic increase in dry demos, in which a coupon and package sample of a nonedible product are distributed. The biggest change is in third-party national marketing groups that coordinate demos on a regional or national basis. In 1992 we dealt with two such operations. Today we work with seven different third-party groups that involve a majority of our stores. This presents a new set of challenges. We have been very pleased with most of these companies. As a broker, once we make the initial contact and get approval, it then becomes a turnkey operation. But we have also experienced some real problems. We have traced these to poor communication, where we as a broker or the retailer were not kept in the loop regarding changes or did not receive information. Three areas where greater focus can improve demos are: (1) Lead time. A minimum of three weeks is needed from notification of the retailer to in-store execution. (2) Changes are a killer. Stay with the original program. Changes in dates, stores or program details increase the margin for error. (3) Recruiting and development of enthusiastic and knowledgeable demo people. Too often we see human sample dispensers.
One word best describes what needs to be done to improve productivity: communication. It must start between the client and the company executing (the demo). The client must be ready to answer questions about what he is trying to achieve, what segment of consumers he is trying to reach and what offer is to be made. How will this be reported? That should be decided up front. The company executing the demo must make clear what are the upsides and downsides and know the dates by which store lists and supplies are needed. Who will be responsible for sign-up? How long must inventory be taken on demo items? The retailer must ensure that the product will be available in the store. Who will make sure all the information gets to the stores? Who will order the product? Execution details must be clear and understood by all. Are trained and experienced demo people available? Have all supplies been received? Have the stores been notified five days in advance? Does everyone understand the reporting procedure and on what date the reports are due?
One of the major weaknesses in the demo industry today is the new retailer profit center. We are almost encouraging retailers to ask for a demo fee or store fee. Sometimes they are very high. A few manufacturers are saying no to more demo fees. They are cutting back on days of demos. The practice of charging the fee will continue as long as manufacturers are willing to pay. We have to discourage this.
Local demo companies associated with the NADC have the hometown advantage. We recognize you have and are the local, regional marketing experts. You know what we need to get out for our customers. The industry no longer exists just to push coupons and products. It is becoming very sophisticated. Together as partners is the only way for national marketing companies and local or regional demo companies to do a better job for the manufacturer and retailer.
It is not a good idea to put the daily time and distribution report that the demonstrator has to fill out and return on the back of a 35-page training manual. Does the report ask all the necessary questions? I have seen forms that neglected to ask for the price of the product on the shelf. Third-party companies in this industry create another communication problem. Lead times have to be extended. One of the major weaknesses in our industry is bad timing. We are seeing a watershed of change in the way business is executed. In the last few years we have been asked as an organization and as an industry to do what those national companies did who were paying people directly, who had systems that worked for that business, who expect consistency. We are not there yet with technology. There is a dichotomy between what we promise and what we can do. We need to close that gap.
We have 196 stores in three states: North Carolina, South Carolina and Georgia. We have an in-house demo department that handles and coordinates all of our demos. We use an exclusive agency as back-up. We have been doing our own programs since 1985. We want to do it in-house because we want control over what happens in the stores, we want to avoid conflicting demos and assure that we have quality people in the field. Our biggest challenge is to train and motivate our demonstrators. When looking for a demo company to serve in a back-up capacity, we look for a company that has people qualified to do the job. We look for professionally trained people. Lead time and follow-up are very important. The company needs to work with us directly regarding our needs and what we want them to do. We look at the overall quality of the agency.