KPI of the Day – Accounting: % Adjusted trial rate
Definition
Adjusts the initially estimated trial rates by integrating consumer product awareness and all commodity volume distributions.
Purpose
To indicate the likeliness of a product which has not yet been launched in the market.
Recommendations
The % Adjusted trial rate is employed with the purpose of testing the market and developing sales projections for different product categories on the market. Trial rates are usually expressed as part of an evaluation process that exposes potential customers to the actual product on trial.
Afterwards, the customers’ attitude towards the product is assessed, usually through a set of questions related to the likelihood of them purchasing it: would definitely buy it, probably buy it, may or may not buy it, probably won’t buy it and definitely won’t buy it.
However, the trial subjects’ stated intentions frequently do not match their responses, and the initial trial rates are adjusted with other factors, such as customer awareness and % All commodity volume distribution.
In order to utilize this indicator correctly and adjust it for optimal results, some further best practices include the following:
- Highly regarding participants in product trials who stated that they would “definitely” or “probably” buy the product, since the other categories are very likely to prove insignificant and are usually omitted;
- Balancing % Adjusted trial rate with % Consumer awareness. Customers are more likely to buy a product if they are aware of it;
- Referring to issues of product accessibility and availability when working with % Adjusted trial rate. Monitoring and reporting on % AVC distribution can be beneficial in this respect;
- Determining the number of customers who are expected to buy a particular product by calibrating the % Adjusted trial rate to the targeted population.
When sales data are not available for calculation, marketers can use the square footage of the stores as an approximation of their sales levels. % Adjusted trial rate is further employed for the calculation of #Trial Volume, the KPI which reflects customer purchase intentions.
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Tags: KPI, Sales and Customer Service performance
