Economics of Demo Marketing
If you sell products, that can be experienced by shoppers before they buy it, the in-store demo is the most effective method to promote them. In-store sampling have known to increase sales by as much as 2,000 percent.
However, the short term sales spike is not the only benefit of in-store demos. They introduce new consumers to your brand and often convert them into loyal, long-term customers.
“In-store demos now offer an opportunity to connect directly with the customer,” says Kirsten Osolind, CEO of re:invention, a Coronado, Calif.-based marketing and public relations firm. “The more connection, the higher the sales.”
According to a 2008 study by Columbia, Md.-based market research firm Arbitron, more than a third of customers who tried samples said they bought the product during the same shopping trip. Better yet, among the more than 1,800 respondents surveyed, 58 percent said they would buy the product again after trying it. Further, a store demo not only significantly increased an item’s sales (by 475 percent), but it also boosted sales for all products in the line by as much as 177 percent on the day of the demonstration, according to a 2009 study, “Report on In-store Sampling Effectiveness,” which was conducted by the independent research firm, Knowledge Networks PDI.
The cost of an in-store demo is relatively low. Most brands pay $20-$35 per hour to Brand Ambassadors for promoting their products to the shoppers of the stores that carry them. In a good traffic store that may easily translate into 20-30 opportunities per hour for shoppers to become buying customers after they taste or try your product.
Additional costs may include Brand Ambassador's travel expense ($10-$30 per demo) and the cost of sample products. The administrative overhead of demo scheduling and coordination may add up, unless you use automation tools like Demo Wizard. Another alternative is to have a fixed cost demo company as a partner.
All these means that you can buy a few minutes of qualified (they are in the store) and interested (they stopped to listen and try) prospect for less than a dollar. Try to get such results using coupons or any other advertising strategy. Compare it with the cost per click in online advertising to buy a few seconds of someone's attention. Depending on your product, this cost can easily exceed $5 per click (eyeballs) of someone who is nowhere near any store that sells it.
That is why "One Taste Sells More Than 1,000 Ads©".