One of the insightful things that has been said to me recently came from an independent consultant working at a major FMCG client. He said: “The problem here is that we have some people who are world-class at marketing to the masses, but they haven’t got a clue about how to speak to a customer.”
Local marketing is experiencing as much of a transformation in the digital and social media age as consumers and corporates. As a result, knowing where local marketing strategy fits in an omni-channel model, understanding its pitfalls, and working out how to resource it effectively are proving major challenges for marketing chiefs.
According to the CMO Council’s new Brand Automation for Local Activation study, 59 per cent of respondents believe local marketing is essential to growth and profitability, yet struggle to develop strategies and measure its effectiveness. Just seven per cent claimed to have highly evolved campaigns and measurements in place to active local customers.
Key challenges include resources to active a highly resource intensive and largely manual process, budget (for 50 per cent of respondents) and analytics and data.
“Folks are missing the measurements, but nearly one in three brands actually lack the in-market intelligence needed to develop relevant experiences at the local level, without losing that national brand strategy they have worked very hard to achieve,” CMO Council vice-president of programs and operations, Liz Miller, said.
To talk about the challenges, CMO Council asked marketing chiefs from Dunkin’ Donuts, Snap Fitness, Subway and Balihoo to discuss local marketing perceptions and processes in a webinar program. Each brand relies on local marketing for customer interaction and enabling business growth and believes in its influence, even as they confront its difficulties.
Dunkin Donuts employed Local Store Marketing (LSM) when it set out to enter new markets in the US because it couldn’t rely on broadcasting channels for communicating its message, regional marketing director, Russ Romeo, said. He claimed large retail mass marketers traditionally found broadcast media the easiest and most effective marketing medium, but that LSM was a much-needed bridge to expand into new markets and compete at a local level.
“During that start-up phase it may be years before a brand can afford sufficient levels of broadcast media,” Romeo said. “LSM becomes a key strategy for these types of markets and in gaining what I call that ‘beachhead’ position.”
For Romeo, top-line benefits of local marketing include driving awareness and traffic, building loyal customers, responding to local competition in real-time, capitalising on local trends and opportunities, tapping into increased localisation of social media channels, and minimal deployment costs.
Yet there are a host of potential pitfalls too. For example, local marketing is not easy or neat, nor is it a silver bullet to solve broader marketing woes, he said. Local marketing also tends to have higher soft costs and is more labour intensive, is challenging to execute and measure, and isn’t scalable for larger and more penetrated markets.
“It really is a day-to-day battle you go through,” Romeo said. “If there are inherent problems with the system or business model, LSM won’t overcome that. It sounds simple but in both retail companies I have worked for [Dunkin’ Donuts and McDonalds] we used LSM to overcome systematic issues because we weren’t honest with the issues.”
In order to succeed with local marketing, brands must empower local managers and owners to own and activate activity. This requires an easy-to-use toolkit, along with meaningful incentives to get those people on-board, Romeo said. Dunkin’ Donuts’ tools include a web-based and one-stop system, regularly updated campaign templates, pre-approved and camera ready art, turnkey and proven tactics information, and a dashboard for publishing business cases.
“What we have found in enabling LSM, which is one of the biggest barriers in my company, is having simple and proven tactical recommendations that are ranked and stacked,” he said. “We provide content like: ‘if you want to drive traffic, here are steps one two and three’. This makes it grab and go… and no one gets caught up in the execution.
While direct mail remains a proven winner, the use of geo-targeted digital media is booming and mobile apps, opt-in text, Facebook and Google messaging are all perfected suited to local marketing. “At Dunkin’ we provide the platform for our local sites to get on existing social media platforms, then built ‘geofences’ around them,” Romeo explained.
“Smartphone apps are exploding and these are a huge enabler for real-time, in the moment marketing.. You can easily change and update that once you’ve paid the start-up costs. We have also found the old-school stuff still works, like window paint and reader boards, but standards and guardrails should be employed.”