Gib Bassett

P&G Among Those Embracing Digital Transformation

Posted on: April 8th, 2014 by Gib Bassett No Comments

 

Altimeter Group today released a report titled “Digital Transformation - Why and How Companies are Investing in New Business Models to Lead Digital Customer Experiences.”  Teradata customer Procter & Gamble is among the businesses profiled as rising to the challenge of meeting customer expectations in an ever-complex digital world.  Other top flight companies mentioned in the report include Ford, General Motors, Hard Rock Hotels and Restaurants, Intuit, LEGO, Motorola Solutions, Nestle, Sephora and Starbucks.

Data is a crucial element of successfully navigating the journey described in the report:

  • Businesses are now faced with connecting all existing data to understand behavior, map customer journeys, and redefine them to create not only delightful experiences but also seamless and native to the screen and the context of the engagement.  This sparks the need for digital transformation that uses technology to connect with consumers and equally amends or introduces new processes and systems to successfully compete.
  • Among the problems facing digital transformation, data represents the key to unlocking new customer behaviors and preferences.  But, existing infrastructures and processes lack a support model to gather and distribute actionable insights to key stakeholders.
  • Companies that invest in a digital-first approach are looking at more than digital.  In most cases, these companies are exploring technologies as a platform and how each network or platform functions at a native level.
  • We heard that customer data exists in multiple locations and is usually tied to specific touchpoints in the customer journey.  Prior to transformation, those managing each touchpoint would essentially manage their respective data sets to optimize customer experiences in that particular moment.  Strategists must now pull in data from new touchpoints and devices and convert them into actionable insights to always stay ahead of the digital customer.

Following are excerpts from the report which refer to P&G’s award winning Teradata-powered “1, Consumer Place” global direct to consumer digital marketing platform:

  • Tony Hudnell is an Associate Director at Procter & Gamble (P&G) who oversees all global technical development related to consumer relationship management.  Hudnell is leading an effort to create a globally scaled CRM platform to enable P&G’s brands to engage with consumers through meaningful digital experiences.  Hudnell recognizes that fostering relevant, value driven 1:1 consumer relationships represents a significant competitive advantage for P&G.  Hudnell notes, however, that achieving enterprise wide alignment represents a significant challenge for a company with dozens of leadership brands that vary in their understanding of digital transformation and what it takes to achieve success.  He states, “We need to work with each brand to help them understand how to utilize our new platform to drive digital transformation and build new, meaningful consumer experiences.  What we don’t want to do is spend time and money relearning things across brands.”
  • With the integration of marketing, CRM, and other disparate systems, companies can get both a holistic view and also provide an integrated experience regardless of where engagement takes place in the customer journey or lifecycle.  P&G sees the need to build “1, Consumer Place,” a global platform focused on managing consumer data and integrating all of the different systems that gather consumer data.
  • “We wanted to create a scaled platform to talk to consumers directly and keep track of consumers in a consistent way across brands, across the company,” Hudnell highlighted.  “We designed a central hub for all individual consumer relationships with P&G across brands.  This allows us to understand what brands consumers are engaging with, how they’re engaging, and also look across brands to improve our consumer understanding through common metrics and analytics.”
  • P&G’s vision required a new approach to CRM.  “We tore down what a CRM is and built it back up in a scaled model and have had good success in Asia, the Americas, and now we’re expanding into Europe.”
  • In a discussion with P&G’s Associate Director of Consumer Relationship Management, Tony Hudnell, digital transformation begins by changing how customers begin their journey.  “The Zero Moment of Truth is where digital comes in,” Hudnell explained.
  • But, the ZMOT is certainly not where digital transformation ends.  In fact, P&G, among other businesses we interviewed, believes that digital is the way business will be done.  Instead of “digital-first,” P&G is currently embracing a culture of “Digital Back.”  Speaking at Dmexco, P&G’s Global Brand Building Officer, Marc Pritchard, stated that “digital marketing” as a focus on channels and technologies is “dead.”  While controversial, his vision reflects a grander perspective of the evolving customer ecosystem.  He believes that companies can’t embrace a strategy toward digital transformation based on the tools and trends.  “Try to resist thinking about digital in terms of the tools, the platforms, the QR codes, and all of the technology coming next.  Instead, start in the digital world and build your way back to the rest of the marketing mix.  It’s an approach that is building our brand equities, our sales, and our profits.”

Download the Altimeter report here, and also check out information about the Teradata solution behind P&G’s 1, Consumer Place, Integrated Consumer Insights.

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At Frost & Sullivan’s upcoming Manufacturing Leadership Awards the theme will be “The Next Industrial Revolution.”  Yet one company to be recognized during the event shows how the future success of consumer products manufacturing will be anything but “industrial” – it will be about the consumer.

It was recently announced that Teradata customer Procter & Gamble will be named a winner in the Customer Value Leadership category for shaping the future of global manufacturing.

Last year Teradata shared news of P&G deploying Teradata Customer Interaction Manager as a managed service to power the company’s global direct-to-consumer digital marketing efforts.  It is this solution (named “1, Consumer Place”) for which P&G will be recognized at the Frost & Sullivan event.

A truly global initiative, the project’s name reflects the use also of a Teradata database to house consumer insights generated by P&G brand agencies to use in segmentation, targeting and delivery of timely and relevant brand content.  The integrated solution allows brands to consistently measure and fine-tune digital efforts in pursuit of consumer dialogs that engenders greater brand affinity and ultimately supports retail sales.

P&G’s innovative use of multi-channel campaign management was already recognized at the Teradata Marketing Summit earlier this month.  Earning the “Excellence in Campaign Management” award demonstrated P&G’s application of data driven marketing techniques to the challenge of connecting with consumers throughout a complex purchase path.

Read more about the solution here.

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Are CPG Brands Ready for e-Commerce?

Posted on: March 13th, 2014 by Gib Bassett No Comments

 

Among Consumer Packaged Goods (CPG) industry professionals, there are few topics as perplexing as direct to consumer sales.  Even so, many are dipping their toes into e-commerce waters as the industry continues to face slow growth, more competition, and pricing pressure.

Urgency is leading many to hastily consider direct sales channels – despite how it might affect retail partners.  Clouding the picture are new entrants offering a fast-path to e-commerce like Amazon.  Growth-starved brands have little choice but to “follow the money” in the new omni-channel landscape.

Just like digital marketing’s role alongside brand and shopper marketing, failing to embrace direct sales as a core business strategy creates silos that leave CPG makers challenged to optimize sales performance.  Thus, it’s nearly impossible to observe timely patterns among product movement, assortments, and pricing:

  • Is lift incremental or are we cannibalizing retail sales?
  • Is direct and retail pricing rationalized?
  • Should assortments differ, overlap or be the same?
  • Is it better to partner with a pure online retailer like Amazon, or the online division of a brick/mortar retailer?
  • Should this be about volume, high margin products or both?
  • How does this dovetail with direct to consumer digital marketing?

The “business-to-business-to-consumer” sales model employed by CPG manufacturers and the attendant technology, data and analytics capabilities are ill-prepared to support this expansion to a time-worn way of doing business. 

Unintended Consequences

The world is moving so fast, anything short of a well thought-out strategy will result in poor or confusing results -- or worse.  There’s a land grab underway for commerce that doesn’t require a brick and mortar store trip.  This appears to be Amazon’s plan.

Amazon has the potential to disrupt the retail industry while keeping CPG makers fenced into a distant consumer relationship many brands are trying to overcome with digital marketing.  CPG executives need answers fast, if not a framework for how direct sales fits within their existing model.

Research from Deloitte presented in a webinar recently sheds light on these critical questions.

  • CPG e-commerce is growing, but represents a small percentage of sales.  Amazon’s moves suggest uptake will accelerate, making it a mistake to assume a steady state, small opportunity.  Deloitte's research validates this, with surveyed consumers expecting to make a larger share of purchases online in the future.
  • The “indifferent consumer”: Deloitte identifies a segment of shoppers – nearly half – labeled “indifferent,” in that they neither like nor dislike shopping in a brick and mortar store.  You can imagine currying favor with this segment with the convenience of online channels paired with timely and low-cost delivery.
  • There is overlap between direct and retail channels, but an incremental opportunity does exist – the key is to figure out where, while maintaining mutually beneficial relationships with long-time retail partners.

Interestingly, Deloitte’s recommendations introduce targeting and personalization issues similar to what’s happening in the digital marketing space.

  • Target indifferent consumers with convenience items and capture impulse purchases.
  • Establish new or niche brands while accelerating sales volume for established brands.
  • Attack the new product introduction challenge through targeted trial via social media.

The findings include suggestions for working with retail partners to implement direct sales alongside both retail brick/mortar and online operations.

  • Convince online retailers to stock many items, while saving physical shelf space for popular SKUs.  Resolve to decide which variants should be sold online only.
  • Plan assortment on physical shelves around SKUs with the highest productivity, with a rotating inventory of new or niche products.
  • Pursue direct sales of profitable, low volume SKUs such as “niche flavors and fragrances unable to gain shelf space in traditional brick and mortar outlets.”

Integration Challenges Ahead

Knowing your consumers better than today is the first step on this journey; Deloitte prescribes focusing technology investments to “improve consumer behavior insights, enhance the consumer experience and engage the consumer.”

Obtaining and integrating the digital marketing data generated every day by brand agencies across email, mobile and social media offers a head start.  Moving just as quickly to understand holistic sales performance places sales, marketing and distribution integration at the top of the list for succeeding as a new-age, omni-channel manufacturer.

This post was the subject of a Retailwire Braintrust discussion today.  Check out the comments here.

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Integrated Marketing Management Begins and Ends with Data

Posted on: March 12th, 2014 by Gib Bassett No Comments

 

Yesterday here at the Teradata Summit, Keith Henry, Vice President of Global Industry Marketing for Manufacturing, presented “Selling Through Retail in the Age of the Digital Consumer.”  In his talk, Keith described the opportunity to optimize spend across retail and consumer marketing channels by reigning in the myriad data sources scattered within and outside the typical Consumer Goods organization.  It’s a condition not uncommon in many industries, but remains a challenge due to the complexity and overwhelming nature of such an initiative.  Keith explained how Teradata simplifies the process through an incremental approach whose value exceeds the effort at each step of the process.

Abstract:

In the past, building an engagement strategy with the end consumer has been extremely difficult for CPG companies.  Now with the explosion of digital channels, the ability for brands like P&G, and others creating a direct to consumer dialog, has opened new doors on how to market their brands.  But with every new door opening there are challenges and new opportunities for brands to overcome.  For decades, brand marketers have been accustomed to using shopper marketing techniques, trade funds, and mass media advertising to build brands, induce trial, and ultimately boost sales, yet the lack of direct connectivity between these actions and the ultimate consumer leaves marketers with a lot of uncertainty as to investment effectiveness.  Add to this the rise of the Connected Consumer and the ability to touch and affect consumers through new digital channels and complexity increases further.  Is digital marketing simply an incremental expense to existing brand levers?  What is the proper mix of media, in store, and digital to drive optimal response?  This session will highlight the latest trends CPG brands and other B2B companies are using to communicate and build stronger relationships with today’s digital consumer while trying to understand how these activities fit in the broader marketing investment mix.

Download the presentation here.

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Unlocking SAP Data…With Teradata Analytics

Posted on: February 18th, 2014 by Justin Honaman No Comments

 

“You are now free to move about your data!”

Most consumer goods and retail organizations run SAP® for operational functions.  At the same time, they struggle to derive insights and manage the business most effectively on SAP data alone.  SAP’s data and analytic capabilities simply cannot account for the wider variety of data required to achieve the true supply and demand data synchronization characteristic of best-in-class companies.

SAP® is comprised of thousands of tables, complicated relationships and many levels of abstraction.  Also, extracting and integrating data from SAP® ERP/ECC for business analytics purposes has been notoriously difficult.  Making sense of the data and understanding its semantics is nearly impossible by examining only the physical database instances.

Teradata has solved this problem.  Teradata Analytics for SAP® solution is a flexible data platform that provides an alternative method of performing business intelligence (BI) and business analytics functions.  This solution simplifies the BI process by decoding and integrating SAP® data silos into the Teradata cloud or physical integrated data store for easy access and analysis.

For consumer goods organizations, the Teradata Analytics for SAP® solution is an important enabler for advancing the utilization of analytics within the enterprise.  Several key consumer goods business challenges are addressed with the Teradata solution:

  • Limited Access to Integrated Data
    • Unable to integrate data from multiple SAP® systems
      • This is a typical problem across the industry as many consumer goods organizations have grown through acquisition and maintain individual versions of ERP systems as the acquired companies operate independently
    • Difficult to achieve cross-functional analysis
      • The SAP® ERP and BW environments consistently demonstrate an inability, or inflexibility, in integrating multiple types of data.  Teradata Analytics for SAP® solution addresses this issue so that business users may derive insights quickly based on analytics that span data types
    • Gain an enterprise view facilitating better decision-making
      • Cross-customer, cross-brand/product/package views are difficult to assemble in SAP® where data may exist in multiple SAP silos.
  • Poor BI Performance / Report Latency
    • Complex and lengthy IT process to change report queries
      • Self-service, cloud-based reporting and analysis is the name of the game with Teradata Analytics for SAP® solution and the analysis may be conducted in Tableau, Spotfire, Microstrategy, or any other tool of choice
    • Inability to process large volumes of detail data
      • The Teradata solution is flexible and allows for data sets large and small; and of varying levels of complexity
  • Inflexibility
    • Inability to extend or change system to match business requirements / business process
      • Making changes to SAP® is costly as evidenced by numerous “SAP® Project Infinities” that consume CAPEX and OPEX dollars across consumer goods and retail organizations.  The Teradata solution is inherently flexible and enables low-cost-of-ownership BI.
    • Business users unable to create own custom reports
      • Teradata Analytics for SAP® solution provides self-service reporting and analysis capabilities

Breaking down data silos “is” the big idea in the consumer goods space and one that has been a priority as retail, consumer and shopper data sources have expanded in volume, variety and complexity.  For retail, the challenge is a bit different as it lies in leveraging insights from SAP® data with other types of in-store and online shopper data.  For both consumer goods companies and retailers, today’s dynamic consumer environment requires a real-time, demand-driven strategy to adapt to the changing marketplace.

Unlike other SAP® solutions that simply forklift data marts into SAP® Business Warehouse (BW) as independent data cubes with no integration, companies now have a single, fully integrated view of their business based on the data in their SAP BW and all of their other data.  With this capability, organizations can perform detailed, real-time what-if analysis, scenario modeling and forecast comparisons to drive the business forward.

Teradata Analytics for SAP® solution was created to simplify the process of accessing accurate business intelligence from SAP® systems, making analytics easier, quicker, more cost effective and efficient.

The bottom line:  To run the business, operational performance insights must span silos and support the needs of a demand-driven enterprise.  The operational side of the business may run on SAP® but business performance relies on insights that span data sets beyond SAP®.  The Teradata solution enables a single analytic view so that decision-makers can make decisions utilizing the right data, at the right time, to make the best decision possible.

Name:  Justin Honaman
Title:  
Partner, Consumer Goods / Retail National Practice Leader
Company:  
Teradata Corporation
Web:
 www.teradata.com/consumergoods
Twitter:  
@jhonaman / @TeradataCPG

Brand Management Re-Imagined for a Digital World

Posted on: February 17th, 2014 by Gib Bassett No Comments

 

It’s pretty astonishing how few companies control most of the market for consumer packaged goods (CPG). As pointed out here, “A ginormous number of brands are controlled by just 10 multinationals.”

Considering the hundreds of brand websites, social media accounts, email lists, mobile applications and digital campaigns associated with these companies, you would expect them to possess immense insight about the interactions with their consumers.

Continue reading on MediaPost.

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A Data-Driven Perspective on CPG Mobile Marketing

Posted on: February 12th, 2014 by Gib Bassett No Comments

 

This holiday season saw retailers accelerate the instrumentation of bricks-and-mortar stores to create interactive shopping experiences, which is a lot like their online counterparts.

In 2014 it will become table-stakes for competitive retail, given consumer adoption of mobile devices which place coupons, reviews, comparison prices, social connections and commerce at a shopper’s fingertips.

The mobilized shopper has retailers adding the technology and data-driven processes needed to ensure reliable and rich digital experiences within the confines of the store environment.

While a lot has been written about retailers’ efforts to adapt to the omnichannel shopper, not much has been said about how suppliers can participate, add value and ultimately leverage this activity themselves.

Continue reading on Mobile Marketer.

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Embracing the New Paradigm of a Hyper-Connected Consumer

Posted on: January 27th, 2014 by Gib Bassett No Comments

 

When a consumer isn’t happy with the product she just bought, where does she go to complain or ask for help? She might go back to the store, or call the manufacturer or the retailer, and she might go to the manufacturer’s Web site. But more than likely, she’ll hop on Facebook or Twitter to vent her frustration, where all of her friends and followers will witness the problem and perhaps share their own experiences.

In the best-case scenario, the manufacturer will know about this conversation and use the opportunity to weigh in with the appropriate customer support and marketing responses. But too often, these kinds of conversations end up defining the brand for consumers without the manufacturer participating or even knowing that it’s happening.

This situation illustrates a central dilemma facing manufacturers as they attempt to move toward data driven marketing: How can they capture data from a wide variety of online and offline sources (including the Web, email, social media, and mobile and text messaging), analyze it, and then create highly personalized messages to targeted consumers—and deliver those messages at the right time and at the right touch point?

Making it even more challenging for manufacturers to get cozy with their consumers, this process plays out against the product lines across the company and can involve departments and systems ranging from marketing and technology to customer service and product development.

Trends and Pain Points

Traditionally, manufacturers focused their brand marketing and consumer interaction on the mass media. In the age of the connected consumer, however, that’s no longer enough. To fully engage consumers in the age of connected shopping, manufacturers must capture and analyze data across a variety of sources and optimize interactions across a multitude of communications channels.

It’s critical to recognize that consumers now research and discuss brands among themselves with or without manufacturer participation, establishing brand meaning and value independent of ad agencies, campaigns, and mass media.

That creates a vastly more complex journey from knowing about a product to buying it. The process used to incorporate three simple steps:

  1. See an advertisement.
  2. Visit the nearest store.
  3. Buy the product.

Now it might work something like this:

  1. See an advertisement.
  2. Check out online reviews.
  3. Poll friends through social media.
  4. Compare features among similar products at brand Web sites.
  5. Check prices online at retailer Web sites.
  6. Search for coupons or promotions.
  7. Then, and only then, buy a product.

Just as important, thanks to the proliferation of smartphones and other networked devices, this process is now playing out at home, in the supermarket, in the fitting room, in store aisles, and even at the cash register.

Fortunately, emerging big data tools and techniques make it possible to collect, track, analyze, and optimize the huge amounts of structured and unstructured information created by these new relationships. Access to detailed consumer data can be a huge asset for manufacturing companies, but understanding and optimizing all that data and all those complex communications remains challenging.

Consumer communication now occurs simultaneously in multiple media channels, including social, mobile, email, and text messages, which generate a variety of data that must be managed in real time, while it remains relevant. Record levels of media saturation—experts estimate that consumers now see thousands of marketing messages every day—means manufacturers must deliver tailored messages when they have the most value to consumers so they won’t filter or tune them out.

These communications can affect an entire manufacturing company, from marketing to customer service. Traditional consumer-insight tools (panels, surveys, syndicated data, and one-time promotions) can’t keep up, and most manufacturers don’t have the technical capabilities to efficiently capture, integrate, and use these integrated consumer insights to gain a complete view of their consumers.

That’s why manufacturers are struggling to establish scalable and personal connections with consumers based on accrued insights from all relevant data sources. And it’s why a leading analyst firm estimates that by 2017, marketing executives will spend more on technology than will technology executives.

Three-Step Solution

By 2014, according to a leading analyst firm, companies that develop an integrated marketing management strategy to meet customers’ expectations will deliver a 50 percent higher return on marketing investment than those that don’t. Because their social media and digital marketing efforts are not fully integrated and optimized, it should be no surprise that many brands are not yet seeing the sales gains they might expect. Developing an integrated approach consists of three important steps:

  1. Be aware of all the myriad data sources, offline and online, that affect a manufacturer’s brands and products. That includes individual identity data, behavioral data (location, purchase history, call-center transcripts, etc.), derived data (credit scores, personas, influence scores, etc.), and self-identified data (purchase intent, social media likes, user-generated content, etc.).
  2. Analyze gathered information with big data techniques and tools. Forrester Research says more than 45 percent of current big data deployments are for marketing, and marketers are expected to spend 60 percent more on analytics solutions in the next three years. The goal is to understand how the different channels interact and then put it all together to build an accurate and complete picture of current consumer behavior.
  3. Drive action from the data analysis. With data-driven marketing, manufacturers can join the conversation when consumers talk about their brands, their products, and industries. These kinds of personalized dialogs can help capture consumer mindshare, spurring them to action and converting them into loyal shoppers and brand champions. More broadly, it enables making coordinated business decisions to boost marketing effectiveness, customer satisfaction, and, ultimately, sales.

The New World of Consumer Packaged Goods

In an industry plagued by slow growth, private-label competition, increased commodity costs, and a lack of innovation, consumer-packaged-goods manufacturers must rethink the definition of successful marketing. In the old days, 80 percent of purchase decisions could be influenced in-store—but not anymore. Despite a huge increase in trade promotion expenses, consumers are now an estimated 80 percent confident in their shopping list before they enter the store. 

Getting on that list starts well before the first moment of truth--the instant when a shopper traditionally makes his or her purchase while standing in the store aisle. Savvy manufacturers who want to get on those lists need to own what Google calls the zero moment of truth, when consumers make their choices online before venturing out to the store. So they’re adding email campaigns, brand Web sites, text-message promotions, mobile applications, and social media to marketing mainstays such as coupons, packaging, shelf position, endcaps, freestanding inserts, and television and print advertising.

But making all that work at scale requires a unified, consumer-centric approach to creating and nurturing individual relationships. That means executing dialog strategies, not just sending out isolated mailings.

Marketing to a male buyer researching shaving and skin care, for example, requires messaging across multiple channels, including online. Automatically initiating programmatic follow-ups, including message reinforcement and reminders, is essential to ensure consistent action and closure.

At every step, one message simply does not fit all situations. Jupiter Research reports that by segmenting and targeting prospects based on specific behaviors, marketers can increase open rates by more than 50 percent and conversion rates by more than 30 percent.

Optimizing a dialog strategy requires coordinating all the touch points, as follows, to create and send personalized messaging that accounts for multiple consumer situations and responses:

  1. Consumers entering the campaign at different times
  2. Consumers progressing through the dialog at their own pace via different routes, based on their particular needs and preferences
  3. Consumers responding to each step, not in waves determined by preprogramming

To maximize effectiveness and return on investment (ROI), testing and analysis is required at each step of the process.

To truly understand consumers, manufacturers need cross-channel visibility, both within brands and across their entire brand portfolio. To capture and convert connected consumers in today’s media-saturated environment, manufacturers must reach out to consumers when and where they want to be reached. Personalized, interactive consumer communications must become a core competency.

By capturing and analyzing the millions of consumer interactions that would not otherwise become part of the manufacturer’s institutional knowledge, manufacturers now have the opportunity to take advantage of game-changing integrated consumer insights to affect individual consumer outcomes.

More effective marketing is only the beginning. Other benefits include more effective customer support, more targeted product design and refinement, and a stronger competitive position.

Even better, manufacturers can now embrace this new paradigm via a comprehensive managed service that doesn’t place new demands on their marketing and analytics professionals. Read more about how to get started here.

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Thanks to the rise of big data, social media, and mobile communications, Consumer Packaged Goods (CPG) manufacturers now have an unprecedented opportunity to cozy up to their consumers. Driven by seven powerful trends, CPG manufacturers have the ability to use direct consumer interaction not just for marketing but to create better, more satisfying products and build a stronger, more attractive brand.

The changes are so fundamental that manufacturers literally don’t have a choice. To survive and thrive, they must rethink how they collect, analyze, and use massive amounts of new data about their consumers. The companies that are best able to understand, navigate, and gain competitive advantage from these trends have a huge head start. Standing on the sidelines is no longer an option.

1. Talking -- and Sometimes Selling -- Directly to Consumers

Traditionally, most manufacturers have let their retail partners forge direct relationships with consumers, rarely venturing beyond mass-media advertising. But now that digital, mobile, and social technologies have made it possible for businesses to reach their consumers directly, consumers expect manufacturers to build relationships with them.

The challenge is how to cut through the noise when consumers face thousands of marketing messages daily. The only way to be heard is to use specific consumer information to create engaging messages that are relevant to multiple target audiences—and you need to do all that without spamming people or competing with sister brands.

Direct communications with consumers is only the beginning; direct sales is the next step. P&G eStore, for example, sells Procter & Gamble’s home and personal products directly to consumers. While e-commerce may account for only a small percentage of the company’s overall sales, it promises improved margins and better access to data on consumer habits and preferences. But selling online can also cause conflicts with existing sales channels, making careful measurement and risk/benefit analysis essential.

To facilitate this true data-driven marketing effort, you need to gain an accurate, complete, real-time picture of consumer behavior.

2. Leveraging Consumer Participation

Consumer communication is no longer a one-way process. Today’s consumers demand that their views, concerns, and ideas become part of the conversation. Savvy manufacturers know this goes beyond merely listening. They need to proactively include consumers in everything from customer support to product design.

Traditional call centers alone no longer suffice. Manufacturers need to enable consumers to support each other. It’s all about boosting brand and product satisfaction by giving all consumers the help they need in the way they want it.

Product-development crowdsourcing (or consumer collaboration) takes many forms, such as Coca-Cola’s Freestyle custom vending machines, Puma Factory, Dell IdeaStorm, Huggies Jeans Diapers and myriad personalization options from automakers such as Scion and Mini. While very different, they all go far beyond old style surveys and focus groups. They all capture invaluable data on actual consumer preferences—critical when you consider what consumers say often differs from how they behave. This makes capturing and analyzing behavioral data essential.

Of course, it’s not enough just to let consumers participate in support and design. Manufacturers also need to continually monitor and analyze those contributions to build a unified, consumer-centric data strategy.

3. Monitoring and Analyzing Consumer Conversations

Consumer participation promises to improve the brand experience, boost brand loyalty, provide data on consumer preferences, and lower support costs. For just about every product, in just about every type of media, consumers are already busy sharing tips, solving problems, and offering help to others—on their own, whether or not the manufacturer is involved.

Social media gives individual consumers unprecedented power to influence brand perception and value—both positively and negatively—not just in product reviews but in blog posts, tweets, and Facebook pages that reflect consumer experiences. Stories of user happiness—or dissatisfaction—can quickly go viral, extending their effects far beyond a single person’s network.

Manufacturers can’t control what gets said in these discussions but must continually monitor and analyze them so they can instantly engage where appropriate. Coca-Cola, for example, participates in online forums controlled by independent brand champions. Similarly, Comcast long ago developed a reputation for solving problems raised on Twitter. And many companies now provide advance looks and product samples to key social media influencers.

Given the incredible profusion of these conversations, manually tracking them all simply isn’t an option. Manufacturers need automated, scalable tools to help them follow and understand what people are saying about their products and markets. That means having the ability to pull and analyze data from multiple sources, within and across brands, to capture the game-changing insights.

4. Demonstrating Brand Meaning and Consistency

In the world of social media, manufacturers face mounting pressure to make their brands stand for positive values. The millennial generation—roughly 30 years old or younger—in particular, look for brands that demonstrate social values that match their own world view. From Google’s pledge of Don’t Be Evil to Coca Cola’s commitment to sustainability, consumers increasingly judge brands not just on their products but by their philosophies as well.

Manufacturers need to walk the walk, not just talk the talk. Consumers are looking for brands that transparently deliver on the values they espouse, as well as products and corporate practices that share a coherent brand truth they can identify with.

That means the messaging also needs to be consistent—no easy task when data is stored in distinct and separate siloes. It’s also complicated by the need to deal with a wide variety of new and old media channels and microtargeted market segments.

This range of channels makes automated campaign management essential because it enables reporting and analysis of consumer interactions to optimize permission-based direct digital marketing.

5. Reaching the Mobilized Consumer

Making things even more complex, consumers increasingly do their research and even make buying decisions right from their mobile devices. Consumers want manufacturers to get them information (offers, discounts, and more) at the right time and in the right format—so-called connected shopping.

Mobile commerce lets manufacturers reach consumers when they can most effectively drive behavior, whether that means walking into the local grocery store or comparing new car features on the living-room couch. That’s a huge potential win, but it requires always being available in the consumer’s pocket with a fast, well constructed, and context-appropriate experience. Doing that means continually crunching the numbers that define where consumers are located (e.g., in or out of the store), what mobile device they are using, and what their previous shopping choices were.

Second-rate user experiences that don’t take into account the consumer’s stage in the path to purchase might be acceptable on the desktop, but just won’t cut it in the mobile sphere.

6. Retail Collaboration

While some retailers could view this as a threat, it could also be the basis for a collaborative relationship, improving outcomes for both manufacturers and retailers. Makers of consumer packaged goods, for example, work with large retailers such as Walmart and Target to share point-of-sale transaction data and analytics. Automakers share on-board diagnostics to help their dealers maximize service revenue. Technology research firm Gartner meanwhile, suggests that contextual marketing could let retailers and manufacturers work together to push coupons to consumers’ mobile devices in real time based on the context of a shopper’s trip.

Consumers don’t care about potential conflicts between manufacturers and retailers; they expect their preferences to be known and catered to at all times. So while manufacturers and retailers may have competing priorities, they rely on each other for success, and require systems that integrate data and insights from both sides.

7. Acting Today on the Long View

Despite the pressure to quickly embrace social media and data-driven marketing, these efforts can outstrip manufacturers’ ability to fully measure their effectiveness. So how do you balance return on investment (ROI) against the need to move quickly? The first-mover advantage is important, but no one wants to waste marketing dollars and diminish ROI. Without a larger strategy, even the most powerful big data analytics capabilities may not deliver all the expected big-picture benefits. Manufacturers need insights that can drive marketing but also add value across the entire organization.

According to management consulting firm Accenture, companies need to work with vendors that deliver enterprise-wide benefits but still let you move relatively quickly. A managed-services approach—insight as a service—lets many companies focus on what they do best while avoiding overcommitting to an inappropriate strategy for their long-term needs.

In this always-connected, user-driven environment, manufacturers can and must get closer to their consumers. This means optimizing their data collection and analysis efforts across multiple media outlets and approaches, from social media to their own Web sites, from ads to sponsorships. It means combining data modeling and data warehousing and integrating disparate data sources to create marketing solutions that serve consumers regardless of channel, time, or place. And it means moving fast while at the same time developing a deep understanding of the trends that define what modern consumers look for from the companies that make the products they buy.

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CPG Marketers Under the Microscope in 2014

Posted on: January 17th, 2014 by Gib Bassett No Comments

 

Consumer packaged goods marketers depend on contractors, agencies and consulting firms, arguably more so than peers in other industries. That’s not going to change much in 2014, but what will is the role these parties play. Something must change: “According to a recent Deloitte survey of 4,047 respondents encompassing 28 product categories and more than 350 brands, brand loyalty is declining.”

Continue reading on MediaPost.

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