A surge of consumers returned to the frozen foods category during lockdown. Steve Axe of Nomad Foods says customer retention is more important right now than customer acquisition.
Few brands are in touch with their history in the way that Birds Eye is. In recent years, for example, the frozen foods giant has turned around its performance with a modernisation of its long-running Captain Birdseye mascot. And Steve Axe, CMO of owner Nomad Foods, claims to turn to founder Clarence Birdseye for inspiration when faced with a tricky question.
And just now the question on his mind is whether to carry on doing what he’s done in the past, in marketing terms, or whether to pivot to something new in the light of the impact of the pandemic.
There is, of course, an appropriate quote from the inventor of flash freezing: “Just because something has always been done in a certain way is never a sufficient reason for continuing to do it that way. Quite the contrary.”
Speaking at MAD // Anywhere, Axe applied this “stick or twist” approach across several areas, including the debate over the role of penetration.
Penetration or retention
Byron Sharp’s How Brands Grow has become almost a religion, he observed. “We all know the leaky bucket, we all know about penetration. But what if you’re in a category that has suddenly seen a generational shift in consumption?”
The retail frozen food category surged as restaurants and schools closed and as people worked from home. “Is it still all about penetration or actually does the loyalty word come out of the cupboard?” Axe mused.
“We gained an estimated three years of incremental penetration in the first three months of the pandemic,” he reported. “First of all, from panic buying and then from increasing consumption. Suddenly we’ve got people either buying in frozen for the first time or buying more than they’ve ever done in the past.”
And often these have been people outside the brand’s usual young family target audience – those outside the brand’s typical demographics, such as younger professionals or older households. Factor in the greater number of household freezers and the anecdotal evidence that these new consumers are pleasantly surprised by the quality of frozen products and “the question is, how can we keep them? Is there a more effective and efficient way of keeping consumers that we’ve gained?”
According to Axe, retention rates at Birds Eye have more than doubled in the last four months and the thinking no longer revolves just around penetration, especially given the new data coming from digital sites which enables the brand to identify customers.
“Talking to these people, nudging them to go and repeat buy is suddenly a much more attractive proposition than just trying to refill the leaky bucket,” said Axe. “If we keep them a little bit longer, we believe we can grow our total business by 1%. Those are big numbers when you’re the market leader in frozen food in Europe.”
Social is crucial here: over the past 5-6 years digital and social channels have gone from 0 to 30% of Birds Eye’s media budget and retention messaging now forms a significant part of that.
Go big or go close
Innovation is another area Axe is thinking about. Done successfully, this can be a step change for brands, companies and even categories (think Halo Top, Red Bull). But is a pandemic the best time to think about such big developments?
The stats suggest yes: Axe noted that while two thirds of people are concerned about the risk that COVID-19 poses, a similar proportion are still interested in buying new products – and over a quarter are interested in buying new products now more than ever.
Given the 90% failure rate of new product launches, though, it’s clearly a risky proposition. The odds are that you’re not sitting on an idea that is going to become an icon of your category, so Axe’s advice involves “a bit of a twist” – which is go close rather than go big.
By which he means stepping only a little bit further away from your core business “but it’s so intuitive for your consumers and your buyers: you know they already know and love your product. You’re just giving them that little bit extra. And with that little bit extra, you’re going to get in the shopping basket.”
So, things like new flavours and new recipe formulations would seem to be the order of day.
Advertising – old or new?
Going dark during the pandemic was never an option for Birds Eye, but the content of advertising had to change to reflect the times. Axe believes that with the ‘What’s for tea?’ campaign the brand got both the tonality and message right: “We’re here to help you, we’re not here to sell you or pretend the world is going to suddenly be this wonderful place, but we are going to put a smile on your face because that’s what brands you trust should do.”
But where next? Should advertising continue to reflect what’s happening in society as the pandemic plays out? Or should it move on to something new? Certainly don’t move on just because others are – and campaign data should help here.
“If you’ve got advertising that works and is winning then keep it on air,” Axe stated. “It’s going to be a darn sight more successful than then trying to copy what other people are doing.”
And TV will still be essential. “When you’ve got 98% penetration and everybody buys frozen food and everybody’s got a fridge freezer, you need to talk to everybody and everybody still watches TV. “