What you can do against 70 percent scatter loss

Posted by Christoph Spengler on 12.02.2020

Werbewoche - Was man gegen 70 Prozent Streuverlust tun kann 2019

If the latest studies are to be believed, firms are currently experiencing marketing scatter loss of around 70%. A huge and very expensive amount that nobody wants. What can be done about it?

Scatter loss is defined as "the proportion of people reached who do not belong to the target group". This widely used definition comes from a time when people still had printer's ink on their fingers after reading the newspaper. Tempi passati! Today, successful marketing management requires much deeper insights. Because to achieve success, we must capture the attention of (potential) customers, provide impulses for action, build relationships, and last but not least, motivate them to buy from us.

Scatter loss is not only in advertising

Scatter loss can occur along the entire customer journey at both analogue and digital touchpoints. In addition, I believe that we also need to include those activities and investments that don’t achieve their intended effect and ultimately don’t make the necessary contribution to successful marketing.

More and more total failures

Scatter loss has always existed and will continue to do so in future. So the key questions are: how can scatter loss be minimized, and how can marketing effectiveness be maximized? What is really surprising, however, is that total failures in marketing communication are becoming increasingly common today. Here are the main reasons for this:

  • Lack of interest from target individuals: the communication content and media used meet with little interest and activate weakly
  • Too little communication pressure: the marketing measures pass by the target groups unnoticed
  • Insufficient support through to purchase: customers are merely inspired but not led  to buy
  • Inconsistent branding along the customer journey: target groups, touchpoints and content are insufficiently coordinated.

Reach doesn’t always mean the same thing

On our mission to "fight the scatter loss" it’s worth taking a closer look at the key metric "reach". Here is a common definition: "Reach indicates the number of people reached by an advertising medium or advertising material." This definition isn’t very precise and leaves out actual customer behaviour.

Classical advertising, such as advertisements, posters and TV spots, almost always attract passive attention from target individuals. On the other hand, more and more (potential) customers are actively seeking out information themselves - for example, by googling, configuring a product, or making an inquiry. So there are clearly two completely different types of reach: passive and active. Irrespective of this, in connection with the inevitable distortions and errors, the question is whether planning around reach and contact opportunities is still helpful, since plan values are decreasingly reflecting reality.

Due to the fuzziness of the traditional "reach" key metric, misinterpretations are the order of the day, which has a significant impact on success management and ultimately also on scatter loss. In our over ten years of consulting experience, we have confirmed many times over that there’s huge potential for success to tap into, provided these fuzzy definitions of reach value are consciously corrected. One or two additional OTS (opportunities to see) that increase advertising pressure can turn a lame duck into a tiger.

From cheap to costly contacts

Understandably, the dynamics of scatter loss also confuse the ranking of contact costs. As part of our mission, contact costs should definitely be assessed under the correct net conditions, which tends to be the exception in practice. In addition, it’s advisable to establish the greatest possible cost accuracy by adjusting for scatter loss. It is not uncommon for these corrections to lead to enormous surprises: measures that appear to have high contact costs are suddenly inexpensive. I’m regularly surprised by the good comparative values of touchpoints like direct marketing and personal sales consultations. What’s more, we can use innovative data tools today to proactively counteract scatter loss in new customer acquisition, for example, in target group development. And we haven’t yet evaluated the response options, contact quality, or even the customer experience.

Relevance before reach

It’s common knowledge that reach is far from being everything when it comes to leading customers to purchase. Our research shows that success lies in the consistent networking of analogue and digital touchpoints. For example, our touchpoint analyses regularly reveal that personally addressed invitation cards sent by post can generate, as an example, additional test drives for new car models, and thus achieve higher car sales.

Regardless of the challenges of optimally covering the customer journey, or precisely because of this, the statement "If you can't measure it, you can't manage it" also plays a central role here.

Checklist

  1. Measure reach values for (potential) customers
  2. Direct advertising pressure towards (potential) customers; in case of doubt, increase advertising pressure and budgets
  3. Alongside the “reach” quantitative performance indicator also draw on qualitative criteria, for example relevance or interaction, affinity of a target group to a particular activity mix, customer experience, etc.
  4. Take care to build action-triggering touchpoints, for example mailings with response options, into the mix of activities
  5. Implement seamless networking of analogue and digital touchpoints along the entire customer journey
  6. Measure campaign success in order to be able to continuously optimize

This article was originally published in German in Werbewoche 2019.

Christoph Spengler

Christoph Spengler’s core competencies include management, marketing, sales and corporate development. He worked for fifteen years in various sectors of the consumer goods, retail and financial services industries, during which time he gained comprehensive experience with international corporations. Christoph Spengler began his career in classical consumer goods marketing. He spent his first eight years with Unilever Switzerland, where he was Business Unit Director and member of management with responsibility for the whole of the drinks sector in Switzerland. He then moved to McDonald´s, where he was a member of management for four years as Head of the marketing department. His profound knowledge of corporate development is based on his time as a director at PricewaterhouseCoopers. His activities also included management of various international projects in the areas of finance and industry.