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In the business to consumer space, engagement has always been an important business priority. Product sampling is a well-known direct marketing technique to foster engagement. Leveraged typically by sectors such as FMCG, this involves distributing free samples of a product to a select group of consumers. But why would a company want to distribute free samples? There are three key benefits:
- Product familiarisation: This is especially beneficial in new product introduction scenarios. The idea is to acquaint the customer with the product and increase the propensity to buy. This is also applicable for existing products where the brand recall is low and needs to be increased.
- Increased brand loyalty and advocacy: Free samples encourage existing customers to continue using the product, rather than switching to a competitor. More importantly, free samples can also nudge loyal customers to advocate the brand and its products to their network.
- Sales benefits: Samples result in a positive impact on sales both on an immediate as well as long-term basis. It is also well known that conversion rates (consumers trying out a free sample and then purchasing the product) for this type of marketing are higher than other marketing techniques.
While the benefits of sampling are proven, there are challenges as well. First, it entails high investments. It is not just the revenue loss from free products, but also expenses related to events, distribution, and operations. Second, it leads to limited and delayed consumer insights. Once the samples are distributed, it is extremely difficult to keep track of consumers who are trying out the sample. Getting feedback from consumers is also time consuming since the brand has to wait for the data to come in from retailers, distributors and market research agencies. This in turn, places a challenge to target the right set of consumers for the next sampling exercise. Third, too much left to chance. With traditional sampling, engagement with consumers is largely transactional and limited to that particular interaction. Without a sustained engagement over a period of time, positive customer feedback, loyalty and advocacy is a matter of chance.
How can the platform make a difference to product sampling? There are three main benefits. One, it reduces cycle time for consumer feedback. With digital sampling, feedback is available directly from the end consumer, as and when they provide it through the online channel. The cycle time for getting feedback, therefore, can get reduced from two or three months in the traditional scenario, to a few days in the digital scenario. Two, there are some cost benefits. In digital sampling, there are no overheads associated with planning and organising events, transporting samples to the physical location, and associated on-site promotions and marketing. Digital sampling eliminates most of these expenses, with the spend being primarily on the shipping expenses for the product samples. Three, it offers rich insights. An example being the overall sentiment to a new product being launched. These insights can help the brand target the appropriate consumer and gain valuable inputs for product improvements.
How should a company go about the digital sampling journey? By following four simple steps. The first step is about product selection and business objective definition. Decide the product that you would like to distribute free samples for, and define the business objective of the exercise. Second, identify the target audience. Third, zero in on the right IT platform. Here you have two choices: you can either build a custom IT application for your digital sampling, or check for existing platforms which can help. Either way, the IT platform should help you publish information about your digital samples to the target consumer base, and provide a way for them to provide feedback about the samples. The final step is execution. This involves shipping samples to consumers, analysing feedback, and addressing customer queries.
The author is Shantanu Paknikar, general manager, innovative business solutions, IT services division, Happiest Minds Technologies
