CPGmatters: ConAgra Boosts ROI through Better Measurement, Forecasting
By Al Heller
special arrangement, presented here for discussion is an excerpt of a current
article from the monthly e-zine, CPGmatters.
ConAgra Foods instituted
best practices in coupon measurement and forecasting four years ago to
improve ROI on this part of its marketing spend, and has since posted strong
increases. Now the maker of Healthy Choice, Hunt’s and Banquet brands wants
the CPG industry to similarly embrace best couponing practices and use
performance benchmarks shared by third-party analytical vendors such as
IRI, Nielsen, PDI, IFX, MMA and Marketing Analytics.
“There’s a knowledge
gap in CPG,” Rick Abens, director of advanced analytics, told CPGmatters.com in
an interview. “If people really appreciated the analytics behind effective
couponing, they could strengthen their brands. Enacting best practices
could increase ROI on coupon spend by 10 percent.
“Most of our modeling
vendors report a 60-70 percent ROI in the short-term, and about 100 percent
over a longer two- to three-year period because of repeat sales. Performance
varies extensively by category and by detail of the promotion (face value,
purchase requirement, season, and time to redeem),” he said. Abens is
also vice president-research for PMA, the Association of Integrated
As companies such as
ConAgra improve their ability to measure and analyze coupon performance,
they also become better predictors of demand. Through this knowledge,
they’re better able to manage logistics, balance sheet and P&L statements.
And with retailers, they can better secure shelf placement of brands and
raise confidence in the effectiveness of their couponing events. “More
strategic data sharing produces synergistic insights,” he said.
Coupon analytics are
most important to brands ranked number two, number three or lower in their
categories, according to Mr. Abens, because “these brands need to use coupons to
help become a more preferred choice of consumers versus the leader. Coupons
also help brands reduce the price gap that exists between them and private
label, and lessen the likelihood they’ll lose any shelf facings to store
These disciplines are
also key to brands in
“expandable” categories which people buy infrequently, less than
once a month, but will use more if in their pantry (such as packaged meals
and cereal), he contended.
“Consumers are consolidating
trips to save on gas, and they’re planning more as the economy is tanking.
With more stock-up trips and fewer quick trips today, brands need to get
on the shopping list in the planning phase at home – and that occurs
when they review the weekly freestanding inserts and circulars.
“If you get on the
shopping list with coupons,”
he continued, “you can take the consumer out of the market for an entire
purchase cycle so your brand wins and others lose. Otherwise, your brand
will have to wait another purchase cycle – when the consumer is back
in the market for your category – to compete for a purchase.”
Questions: What do you think of the opportunity in establishing shared
performance metrics around coupons? What are the challenges of such data
sharing and analysis?