This article was first shown on LinkedIn in 2019
How much should your business be investing in product content? There is no simple answer to this, but the following considerations and a comparison between the above products will help guide you to an appropriate answer. This article is focussed on considering this topic from the perspective of brands rather than retailers.
The story for retailers is similar but different. Better product content for retailer customers, has significant cost reduction and bottom line profitability impact – lower returns, lower customer service costs, happier customers etc.. But that is another story.
Let’s start with the current situation as relates to all products:
- Growth is achieved by being present where your customers are shopping, with content that persuades them to buy your products over those of your competitors. This may seem blindingly obvious, but the majority of brands do not act accordingly.
- The proportion of consumers using digital channels to research and shop, for both online and in-store purchase, continues to increase. So without an appropriate digital presence, you will underperform the market in all channels.
- All products are becoming more functional, targeting niche requirements, which leads to faster innovation and a diversity of product choice. In this context, consumer education is both an opportunity and a critical requirement.
So given that product content is an imperative for maintaining growth vs. your competitors, how much should you be spending on product content? The answer to this is driven by three primary factors:
- How important is product content for consumers to understand the product features and benefits? The less well known the product, brand or features, the more education is going to be required. And if there is a high correlation between sales and awareness, then product content is going to be well justified to expand that knowledge to a wider audience. Bananas don’t need content to explain their benefits. There isn’t much NPD in the banana category on which to educate consumers. Whereas an electric toothbrush will have a spectrum of features and associated benefits that need to be explained before anyone is going to spend $100 on such a functional product.
- What is the gross margin dollars of each product? If your product has a high dollar gross margin, you don’t need to sell many additional products to justify the extra investment in product content – maybe just one additional electric toothbrush sale from better product information. Likewise, if you have a high volume low margin product you only need a small percentage increase in sales to justify investing in product content – so giving a case for investment in better information on the nutritional benefits of bananas. These scenarios are a no-brainer. Once the product content investment is covered, the uplift flows to the bottom line. But what if you have products where the product content investment equation does not stack up, for example for new products with no sales? After all, it costs the same amount to photograph a product, whether you are doing $100 or $1m in sales. In this case it has to be more of a strategic consideration. Given product content drives sales and sales drive the ability to invest in product content, you should treat product content as part of your launch marketing budget. Without it, you will never enter the virtuous growth spiral, and realise the true potential of your product investment.
- What are your competitors doing? In the bananas category, there is little point of difference between the various sources of curved yellow fruit. So there is little point investing in an extensive campaign of product content. But in most categories, product content can be used as a competitive advantage. If your competitors are doing this, they will be taking market share from your brands. There is much more scope for creating a competitive point of difference with better consumer education for complex products such as electric toothbrushes. If any product would lend itself to consumers meticulously studying product content it would be baby formula. A simple comparison between Aptamil products and S26 products on various retailers illustrates the point. Guess which is a client of SKUvantage.
Your products will lie somewhere on the banana / electric toothbrush spectrum. Using the above can help frame the business case for investment in product content. At a macro level, digital product content is just as important as the information on your packaging, where marketers are often trying to fit as much information as possible. Yet the infinite digital canvas and multitude of channels means you can do so much more to engage consumers.
At some point, this content will have diminishing returns, but we see very few brands approaching that threshold. It is a judgement call as to when to stop, but a 5% investment in product informant to drive the performance of the other 95% of your marketing budget, would seem cheap. The costs of SKUlibrary are typically below one tenth of this i.e. less than 0.5% of an overall marketing budget. Money well spent we would argue.
In summary, after all the hard work of designing, developing and marketing your products, you want to make sure that when the customer comes to purchase, they have the information they need. You wouldn’t put your products in plain packaging, so why not give consumers the information they seek in digital channels. Therefore, product content should clearly be considered as an integral part of your go-to-market strategy; anecdotally we observe a high correlation between brands that take product content seriously and how well the businesses are doing overall.
Sadly, product content is not sexy. It is tedious and challenging work. This may explain why brands would rather spend their budget on softer, qualitative, “tried and trusted”, above the line and brand building marketing campaigns, rather than the specific, dry and thoroughly dull business of product images and information. So it’s no surprise to see, for so many products, the path to purchase fails at the moment of truth when the customer actually gets to the product page to learn more about the products. This is why we exist… to help our clients look good online without the effort.
Simply put, without good product content, your overall marketing budget will underperform, sales will suffer and your return on investment in new product development will be poor. So set your business up for success. Don’t put your products in plain digital packaging, help them realise the true sales potential by giving consumers the information they need to buy your products with confidence.