Conducting product trials is a great way to promote and measure brand awareness and perception. Product trials are more effective when followed up with a short survey to measure the value of the interaction. In fact, a study conducted by McKinsey proved that word-of-mouth recommendations are a very powerful tool to generate sales.
A prominent razor brand drives brand awareness through channels that relate to young women’s lives. They created a highly-targeted sampling program by means of a college distribution program. Since 2007, the brand has delivered samples to young women at various campuses to create customer engagement. This idea goes beyond measuring normal purchasing behavior to foster interactions between potential customers and the company. Regardless, results have to be measurable. Here are some vital metrics that every product trial should include.
Product Trial Metrics
- Customer Lifetime Value – This is he present value of future profits generated from a customer over his or her lifetime. Calculate this by subtracting revenue draws (cost of goods sold + cost of capital) from customer revenue (buys per year x average retail price x average period of loyalty).
- Customer Referral Value – This is how much of a customer’s value stems from his/her referrals to other customers.
- Customer Influencer Value – How effectively a customer talks to others about the brand without the rewards associated with referrals. This includes word of mouth interactions, customer-contributed product help, and use forums.
Measure word of mouth impressions by multiplying event interactions by the percent of customers that are likely to recommend. The result is the number of “brand advocates.” Use a Keller Fay chart that displays norms by industry. Multiply by the average number of people told by each person. Keller Fay’s industry-specific graph shows an average number of weekly conversational “brand mentions” by category was based upon 39,083 respondents.1 For instance, the category of Personal Care, Fashion & Beauty typically generates an estimated 3.1 brand mentions per week.
Post Product Trial Metrics
- Customer Knowledge Value – Value add by customers sharing their preferences and participating in the product trial process. Typically, customers do this with methods such as customer suggestion contests and customer-included beta testing.
Brands can more accurately calculate the ROI of their programs by capturing appropriate segmentation data in their post event survey.
Sources: 1White Paper: “Single-Source WOM Measurement. Bringing Together Senders & Receivers: Inputs and Outputs”; By Ed Keller & Brad Fay; Keller Fay Group, LLC; November 2006; p.4″