To Celebrity Endorse or Not? That is the Question.
Oprah. Beckham. Swift. Puck. Beyonce. We could go on and on. Celebrity-endorsed products are just about everywhere. The question is — do celebrity endorsements work? Turns out, that’s not a simple question to answer. Why? According to recent research by Consumer Reports, several celebrity-endorsed food products are less than stellar. Another survey by Adweek/Harris Interactive found that more than 75% of respondents said a celebrity endorsement has no impact on their intent to buy; 4% said it made them more likely to purchase.
But as the article also notes, how consumers respond to a survey may contrast with their purchase patterns. While they may not like to acknowledge that they’ll leap for the latest Oprah-endorsed book, that doesn’t stop them from tossing it into their shopping cart. So let’s turn to POS data.
To start with, compare sales before and after a celebrity began formally endorsing a product to see whether there were any positive or negative effects. If you know a media campaign begins on a certain week, compare weeks before and after to see if there was a change in sales. If your POS business solution allows for it, insert comments to note the beginning and end of the promotional events and endorsements — it will save you time in the future if you note these events in the present. Broaden your perspective by comparing the post-endorsement sales to those during the same time period in the preceding year.
Be certain to review sales trends for similar items (either endorsed or not endorsed) to determine whether there was a favorable outcome — and to benchmark the performance of the new endorsement. For example, if Beyonce-endorsed L’Oreal products saw a 20% lift, can you expect a similar lift when Taylor Swift starts endorsing Cover Girl?
You can also review sales for the same celebrity endorsing different products. For example, say all new Giada De Laurentiis items typically see a 10% lift once she introduces a new line. You can measure the performance of her latest endorsements by benchmarking them against past performers. POS data from her previous endorsements is also good for forecasting supply chain needs.
And then there’s the spontaneous celebrity endorsement — for example, Katy Perry gushing about her favorite ice cream on a talk show, Twitter, Facebook or her blog. This sort of spontaneity could cause a short-term spike in sales that a manufacturer and retailer can’t predict and can’t plan for.
Other thoughts to consider and test against your POS data. What role do consumer report or industry reviews play with a celebrity-endorsed product? Do you see a drop in sales after an industry-insider negatively reviews a celebrity-endorsed product? Or is the celebrity’s personal brand strong enough to negate the review? And consider what role your pervasive media blitz plays in sales. Is it the exposure generated by your marketing buzz — or simple celebrity — driving the jump in sales?
Determining the value of celebrity endorsements can present a bit of a puzzle — but POS data can help you piece it together.
