How to Measure the ROI of Retail Demos

When clients come to us for retail demos, they often want to know how they can measure their ROI. It’s a valid and important question. At HFA, it’s imperative that our clients see a high ROI on their retail demo programs and experiential marketing activations. Our primary growth strategy is built on retaining long-term clients and those clients referring us to other brands.

How to Measure the ROI of Retail Demos Not surprisingly, our retail demo clients usually measure their ROI on the sales they see at the retailers receiving demos. But they vary in how they look at this lift. Some clients hope to see enough sales at the demo to cover the full cost of the demo itself. For most customers this is not a realistic goal. Others look at the cost per customer acquired. Others take a deep dive into their trade spend and see how demos are performing against other trade spend investments, like TPRs and IRCs.

However, we have one client who shared how they look at the effectiveness of their retail demos that made complete sense to us, and we now share this best practice with prospective clients looking for a definitive ROI analysis. This client compares the 1- week, 4-week, and 12-week period sales for stores receiving demos with stores that are not receiving demos. They look at the sales of the product sampled, as well as other products in their portfolio.

As an example, if 25 Whole Foods Markets are receiving demos and 25 others in the region are not, the growth for the products sampled should be notably higher at the stores receiving the demos.

How to Measure the ROI of Retail Demos We love this way of looking at the demo program results for several reasons.

1. It takes into account repeat purchases.

As we mentioned earlier, you are not likely to sell enough at a demo to cover the cost, but if you have strong customer retention, the first purchase won’t be the last. Looking at longer timelines can help you see the full benefit of the original demo by taking into account customers who purchased the product again after the demo date.

2. You can see the “halo effect.”

When our brand ambassadors sample a product, of course we see a lift on the sales of that SKU. What’s interesting though is that we also see a lift on other products in the portfolio. We call this the halo effect. By looking at the sales of these periphery products, you can better evaluate the full scope of the demo benefits.

How to Measure the ROI of Retail Demos 3. You can see how ongoing relationships effect your sales.

When a brand ambassador consistently performs demos at a store, they build relationships with the managers and employees. Sometimes these relationships result in an extra off-shelf placement, which increases the product’s sales even when the rep isn’t there. A 12 or even 26-week view can help you see these often intangible benefits.

4. It accounts for other lifts not related to the demo.

If your product is seasonal, your product will sell more in peak seasons, even with no retail demos. By comparing stores that received demos to those that didn’t, you’re able to take out non-demo related lifts. If non-demo stores see a lift of 10%, but stores with retail demos see a lift of 35%, you can clearly see the benefit of the demo program.

Retail demos are often a large portion of a brand’s trade spend. As with any large investment, it’s important to make it work for you! By using this best practice to measure the ROI of your demo program, you will be able to see both the short-term and long-term benefits!

Does your brand have another way they like to evaluate retail demo results? Tell us about it in the comments!


Want to stay connected?


* indicates required

And don’t worry, we hate spam too! You can unsubscribe at anytime.