Sometimes you have to trim a tree to encourage healthy growth. At the end of the summer, HFA got out the tree loppers and made some big cuts to our service branches, pruning about 40% of our business. It was a massive, carefully considered, and, let’s be honest, terrifying decision.  

Why in the world would we cut 40% of our business? In this blog, we’ll do our best to summarize dozens of pages of handwritten notes, meeting agendas, and deep conversations to explain the why. 

First, let’s paint a picture of where the team was in January. We were all putting in well over 40 hours a week, with many of us jumping in to help on our days off.

 Even with this effort, our execution was falling short. We’re used to crushing our goals, but in this season we were missing execution windows, falling short of our sampling goals, and struggling to keep up with emails. Our brand ambassadors could feel our manic energy and a client or two even had to have some “real talk” with us. This is not something we are used to…and it felt icky.  

Our deliverables were better during slower months, but our profits were marginal at best. The business wasn’t viable with the lower workload. And we all knew we could not maintain the frantic pace of the busy (and profitable) season. So, we had to make a change.

We spent months looking for ways to be  more efficient with our time, improve communication, and streamline execution, but we felt like the quality of execution we desired was out of reach with the workload required to be profitable. We knew we needed to trim some services and after reflecting on where we provide the most value to our clients and what lights us up inside, we decided focusing solely on events was the way forward.

Here are a few factors that led to this decision:  

1. We offer the highest value to our clients with our creative activation ideas. 

We come up with fun and innovative ideas for our clients. Silent yoga session at a music festival? Sounds fun! How about a bubble party for our favorite sparkling beverage brand? All about it. Branded breakfasts for running groups nationwide? Where do we sign up?  

Without a great idea, even the best planning and execution won’t achieve the results you’re hoping for. We used to assume all agencies could come up with on-brand, unique, and engaging ideas, but over the years, we’ve learned that conceptualizing creative ideas and bringing them to life are true HFA superpowers.   

2. People are more responsive at events. 

We’ve seen a very positive shift in how consumers engage with brands at events. We’re not scientists, but it seems that since Covid, consumers are open to spending more time connecting in person with brands at events where they are choosing to spend their time. We’ve seen lines for brand activations at music festivals, marathon expos, and community events.  

Consumers are also more in tune with brands that are like-minded. Activating at events communicates to your consumer that you are one of them and care about the same causes or lifestyle they do.

3. Retail demos are not as effective as they used to be. 

While retail demos still increase in-store sales, the dollars sold per demo are slightly lower than they used to be. But the sales goals from clients haven’t changed. In many cases, they’ve even increased. This shift is partly due to shopper behavior – more shoppers make purchases online, specifically high-income shoppers. Additionally, stores are hesitant to bring in additional product to support the demo, meaning some brand ambassadors sell out at a demo in the first hour or two.   

With a stagnant ROI, we found it difficult to increase per demo rates, which might be okay except… 

 4. The labor required to execute a successful demo has increased dramatically. 

Demos have always been labor intensive – coordinating dates with brand ambassadors and stores, confirming schedules, and following up again a few days before the demo to ensure they’ve ordered up.  

But since Covid, retailers often have fewer staff on the floor, leading to more time on hold. And, as mentioned above, once you connect with the right person, they’re often more hesitant to complete a product check and place an order for sufficient product for the demo. When you’re managing hundreds of demos per month, just a couple of minutes per demo increase can lead to hours of additional administrative time.

We’ve loved the clients and work we have done on demo programs over the last decade, but we also see that the landscape is shifting and the demos that have helped us grow in the past are now holding us back. How tall can the HFA tree grow when we focus only on the branches where our services are truly unparalleled? We can’t wait to find out!