One important metric to measure in your marketing is return on Investment (ROI). When you spend money on advertising, you want to know money will return to your brand in the form of higher sales and improved bottom lines.
You can have the best strategy, a refined CPG brand voice, and all the traditional marketing tactics up your sleeve. However, if you don’t determine where your highest ROIs are, you’re leaving money on the table.
Top CPG Marketing Tactics w/Highest ROIs
Collaborating with influencers who have strong followings and influence in your target market can be highly effective for CPG brands as people are more likely to use products when they’re recommended by someone they admire or want to emulate.
Influencer marketing generates an average of $6.50 for every dollar spent. However, many brands don’t spend dollars at all. Instead, more than half of all brands give either free products or discounts to influencers rather than paying them cash.
This makes influencer marketing one of the most budget-friendly methods of marketing while still generating healthy increases in sales. When brands do pay influencers, they don’t need to provide high dollar amounts. The most effective influencers (per Influencer Marketing Hub) are micro influencers with under 15,000 social media followers.
While a huge star may bring the “wow” factor to a campaign, consumers are more likely to interact with and ask questions of micro influencers they may have already interacted with on social media and feel comfortable talking to.
Social Media Advertising
Leveraging social media platforms for targeted advertising can yield significant returns. The ROI can vary depending on factors like ad content, targeting, and industry.
Social media advertising yields an average of $2.80 for each dollar spent. Facebook typically generates the highest ROI, but it’s important for brands to measure their ROIs from social media advertising to see which platforms work best for them, as results can vary significantly.
The most popular form of social media advertising is PPC (pay-per-click). You don’t pay for these ads until someone clicks on them, meaning there’s already some level of interest. Some brands are placing ads directly into online content or using other methods like affiliate marketing to attract consumers.
Building and nurturing a robust email list can provide an ROI as high as $38 for every $1 spent. It’s worth your time and money to build a robust email list and keep it updated to communicate with your consumer base or those who may be most likely to purchase your products.
Email lists seem easy, but there are many variables that can impact open and response rates. It’s important to know what you’re doing and use best practices to get people to keep clicking day after day and week after week.
Your email newsletters should be visual, engaging, and interactive. People need reasons to click on emails they know are going to try to sell them products, so if you can give readers related videos, intriguing stories, or arresting images, that will help.
Most people are constantly reading articles and watching videos about things that interest them. When you create engaging content related to your brand, you can reach new consumers and stay connected to existing ones as they value the content you’re giving them. They’ll eventually develop respect for your company due to its expertise.
Creating valuable and engaging content can drive brand awareness, consumer loyalty, and sales. Companies with content marketing blogs see 13 times the ROI compared to companies that don’t use content marketing per SEMRush.
User-Generated Content (UGC)
Encouraging consumers to create and share content related to your CPG brand can be a cost-effective tactic. Not only is user-generated content free to create because your consumers create it for you, but it comes across as more authentic as it’s made by real users of the products or brands in question.
Your staff will have to curate, edit, and possibly even spend time encouraging users to submit content, but this is a small cost overall. UGC that doesn’t look coached is trusted more than any other type of content, yielding a 4.6% higher conversion rate for those who see UGC, and a 9.6% higher conversion rate when other users interact with UGC per an Instagram study.
Implementing referral programs can leverage word-of-mouth marketing to acquire new consumers, resulting in an average of $3.62 in new income per referral visit for ecommerce companies, for example. Sometimes, referrals happen spontaneously. In many cases, however, enrolled ambassadors work to get new consumers to purchase products and receive payments when this occurs.
Affiliate marketing is one example of a referral program. Affiliates typically put codes within links on their websites or social media pages. If people click the links and then make purchases, the affiliates get previously agreed-upon payments. The main benefit of referral programs is they help spread the right word to new potential consumers, some of whom convert and help increase a brand’s sales.
This should give you an idea about what kinds of marketing will give you the highest ROIs, and which will have the most worth in your marketing budget and efforts. Remember, however, that most of these statistics are averages and your results may be different.
Still, this should give you ideas and a place to start with your CPG marketing efforts. If you need more help creating an effective marketing strategy for your brand, Hangar-12 can provide you with The ultimate CPG marketing library.