Measuring Positive Return on Investment (ROI)
Karen Buch, RDN, LDN
Interim Editor RDBA Weekly
Are you familiar with the phrase “Begin with the End in Mind”? It is one of the habits referred to in Stephen Covey’s landmark book The Seven Habits of Highly Effective People. In the book, this principle refers to the mental, first creation, and physical, second creation, to all things. In construction, a building first begins with a blueprint before the physical structure is built. In business, you must first clearly define what you want to accomplish before implementing. Thinking about the desired outcomes is essential to be able to define goals, objectives and the tactics that will deliver results.
As retail dietitians develop new and innovative health and wellness programs, beginning with the end in mind can help RDNs prioritize and focus their time and efforts on the tactics that will produce impactful points of differentiation and positive, measurable return on investment (ROI).
What is ROI?
On paper, calculating ROI is simple. ROI=(Gain-Cost)/Cost. The tricky part comes when you begin to apply this calculation to retail health and wellness activities using the available data points and metrics.
Retailers that use customer loyalty cards to track purchasing transactions collect massive amounts of data. Meet with your marketing analytics team to determine best ways to analyze your impact. When factoring in gains and costs, identify both direct and indirect forms and don’t forget one of the most important costs to consider—your time! Predicting a positive ROI can help you gain the necessary approval of the investment (in staff and materials) needed to move a new program forward. Measuring and reporting actual positive returns for existing programs helps you decide which efforts to sustain.
Growing Basket Size
Retail RDNs can influence customer basket size in a number of ways. Nutritional education and guidance can shift customer purchases toward a higher ratio of fresh produce, specialty foods, fresh seafood and extra lean meats thereby increasing average basket size. Suggest custom recipes and meal solutions to inspire incremental purchases of key ingredients. Be sure to include some items that are on promotion and some that are being sold at full price to capture higher blended sales margin. Plan in-store interactive tasting events to explain specific health benefits while providing storage, prep and usage tips as a way to get ‘just one more’ nutritious food item into customer baskets.
Increasing Trip Frequency
Retail RDNs can influence shopping trip frequency by planning in-store events to draw in shoppers. Events include group classes, store tours, health screenings and interactive, themed tasting expos to meet the special needs of shoppers. Creative themes include gluten-free, diabetes, heart health, superfoods, fuel up for fitness, slim & trim, kids can cook, healthy holidays and more. Other tactics include being active and visible as a nutrition expert in the media to create valuable retailer marketing impressions, attending large-scale community events such as women’s or children’s expos, employer health fairs, and creating custom events through forged partnerships with area healthcare systems and schools. These are important ways to connect with competitor’s shoppers in addition to your existing shoppers. Offer unique coupon codes to calculate the total number of customers that your efforts effectively draw back into the store and also determine the number of new shoppers acquired. Remember new shopper value is measured not just in the initial transaction, but also future sales relating to sustained purchasing.
Enhancing Customer Loyalty
Providing personalized health & wellness services can evoke a powerful form of marketing called Word of Mouth Advertising. Educating customers about diet and lifestyle changes and making referrals to pharmacy, when needed, can help retail RDNs improve medication and supplement compliance leading to improved health outcomes, while driving gains in pharmacy and HBC sales. Customers want to shop with progressive retailers that successfully enhance the overall shopping experience. By answering customer questions and providing simple solutions to better health, retail RDNs can impart a halo effect that adds to customer retention and new customer acquisition rates, equating to improved customer loyalty and a brighter future for your retailer.