CFO World

Piecing together a local marketing strategy

Marketing chiefs from Dunkin’ Donuts, Snap Fitness, Subway and Balihoo join the CMO Council’s latest webinar to discuss how data and social media is changing local marketing strategy

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.

Channelling experience

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.”

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Elevating your local status

Hyperlocal marketing is also crucial in Snap Fitness’ quest to bring on new members. The 24/7 fitness franchise has 1,400 locations worldwide and seen its dialogue with consumers change dramatically.

“It used to be a leader board in the front yard or an ad in the newspaper but we all know that’s not the way we interact with prospects anymore,” online marketing manager, Brant Schmitz, said. “We have to make sure we’re online when they’re searching for gyms, health, fitness and diets.

“A lot of our franchisees might be suburban-based, are marketing in one location and within their local community. Our objectives from a corporate level are to make it easier for franchisees to reach their prospects, and add in new vendors.”

To do this, Snap Fitness invested in Balihoo’s automated marketing so franchisees can contact multiple vendors, generate campaigns and access brand information through a single portal. Once franchisees were familiar with it, the company added adding paid search capabilities, which are achieving an ROI of 2:1, Schmitz said.

Direct mail remains a key element, and to ensure franchisees can undertake this task quickly and easily Snap Fitness has set-up a mailing solution within the portal. These activities have a 13: 1 ROI.

Most recently, it rolled out a member engagement program providing automated, triggered emails and customisable templates, member surveys and a members’ dashboard. Overall, these tools allow execution of traditional and digital campaigns at a hyperlocal level and have led to increased franchisee adoption, reductions in campaign costs and better ROI on individual activities, Schmitz said.

Subway VP of global marketing, Jeff Larson, is another marketer balancing the entrepreneurial nature of local managers with the needs of the global brand. He claimed local marketing is about influence, building buy-in, and making sure you have the tools available to make activation as simple as possible for the stores and operators.

Subway’s approach to local marketing is a combination of strategic certainty around the brand’s focus and approach, and tactical flexibility at a local level. “While you have clarity of where you’re trying to get to, you need to flexible in how you get there,” Larson said.

“If you have that strategic certainty you can be more confident that as you think about pulling different levers to drive different parts of your business, you know they’re all pointing in the same direction.”

Subway has developed a playbook for local marketing around the what, why and how of marketing. The digital tool has been distributed to all stores and includes information on the brand as well as terms. This is tied to marketing initiatives and programs and can be updated as frequently as every four weeks.

Balihoo provides a software-as-a-service technology solution for local marketing automation. The company’s CMO, Shane Vaughan, cited a Gartner figure that companies who focus on integrated processes for local marketing enablement will increase revenue 15-20 per cent by 2015. He also pointed out 85 per cent of consumer budgets are spent within 50 miles of their home.

“In our own studies, we see 30 per cent of national brands have implemented some form of local marketing automation platform and a similar figure will deploy a solution this year,” he said.

While local marketing is a clear winner when it works there are a few key roadblocks, Vaughan said. Firstly, brands must realise national strategy does not scale and understand the local objectives. You must also ensure you have sufficient data on your local customers and location that is market facing; enable and control the execution of local campaigns by making it easy for the local marketer; and put simplified measurement and ROI tools in place.

“While no one is jumping to do LSM, when it’s done well it continues to stay in the marketing mix whether we as a company are pushing it or not, adding to long-term customer experience,” Romeo added.

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