Customer Marketing in the Consumer Packaged Goods Industry

Transcription

1 Customer Marketing in the Consumer Packaged Goods Industry The Essential Ingredient for Sales Success For CPG companies, a good customer marketing department is essential for building high-impact strategies and messaging that conveys maximum value about a company s products and services to retailers. This team can also be called upon to act as skilled mediators between sellers and marketers, two groups often in a state of conflict.

2 Introduction Does This Sound Familiar? They have the same goals, but attribute success in reaching them to very different factors. They use the same business language, yet don t seem to understand one another. They both have customers, but these customers represent entirely different constituents in the CPG value chain. One group appears to focus on image, while the other is concerned with relationship. They accuse each other of being either overly strategic or overly tactical. They can t even agree on the definition of the term benefits. If we were describing a self-help book, its title would be Sales is from Mars, and Marketing is from Venus. The considerably more high-brow Capulets and Montagues metaphor is how Harvard Business Review portrays the notorious feud between sales and marketing, which is so instinctive it seems encoded in the organizational DNA of these two groups. Can a good customer marketing department play the role of mediator? Yes, it can in addition to impacting the bottom line. One Approach to Customer Marketing as Mediator and Sales Accelerator When the Lawn and Garden division of a large consumer packaged goods company undertook the task of knitting together the sales and marketing departments of several standalone business acquisitions, one of their first acts, shrewdly, was to create a customer marketing team to facilitate the integration between these two newly remodeled functions. In the division s pre-transformation days, when the manufacturers it acquired operated independently, one or two brand managers worked with a handful of sales reps to sell their few brands to retailers. Retailers were called on by multiple reps from the same division in order to cover all the products available to sell. symmetricsgroup.com Accelerate Your Sales Performance page symetrics group page 2

3 The division s new incarnation, however, would contain one unified marketing team focused on brand building and a steady pace of new product introduction to create a large, innovative product portfolio. Likewise, disparate sales teams, who had previously sold a small number of products to a large number of retailers, now found themselves assigned to a strictly defined customer segment to whom they were expected to sell the whole bag. The potential result for this $700M+ division? A perfect storm of knowledge mismanagement, poor communication and uncoordinated strategic direction waiting to happen, what with brand managers focused on product innovation, while sales reps attempted to sort out new customers and learn how to sell a complex product portfolio. The newly formed teams were comprised of people who performed the sales and marketing functions very differently, depending on their original business units. Two key questions soon surfaced: 1. How would the sales force obtain consistent, data-driven value propositions about every brand and learn how to position new products? 2. How would brand marketing obtain product and packaging requests from its largest, most strategic retailers? Add these challenges to the natural state of conflict between sellers and marketers, and it s clear that a mediating force is needed to ensure sales effectiveness, protect current revenue and grow the business. Enter Customer Marketing* Customer Marketing, sometimes called product marketing or trade marketing depending on industry, selling channels and company lingo acts as the all-important mediator between sellers and brand managers. * For this article we use the term Customer Marketing holistically to also include developing and applying category, channel and consumer insights, market trends, competitive analysis, etc. This large, complex and essential function is often handled by one or more separate resources called Channel Management or Category Management or simply Insights. For simplicity s sake, we put it under the Customer Marketing banner. symmetricsgroup.com Accelerate Your Sales Performance page 3

4 Brand managers and sellers speaking the same general business language do not always understand each other s motivations, methods or priorities even though the end goal for both groups is the same: get the product on the shelf and then off again into consumers hands. This is because marketers rightly think in terms of how they want consumers to understand brand value. But the sales force doesn t sell to consumers. They sell to category buyers at corporate retailers, and buyers think about brand value in vastly different terms than the end consumer. Thus the source of our disconnect: these two teams go to work each day with different end users in mind. These two teams go to work each day with different end users in mind. So what does customer marketing do? When working well, this team has two main functions: We call them ecosystem adhesive and universal translator. Ecosystem Adhesive The smooth flow of information from brand manager to sales rep to corporate retailer and back is essential to the go-to-market process. Without a brand value proposition (i.e., business benefits) that resonates with retailers, sales reps have no information to sell with other than item and price. Conversely, without feedback on product and packaging needs from retailers, especially those large enough to move the revenue needle, brand managers may miss important product development opportunities for the general marketplace or exclusive opportunities with large retailers. symmetricsgroup.com Accelerate Your Sales Performance page 4

5 Customer marketing is the adhesive that ensures collaboration among all of the players in the go-to-market ecosystem. This team extracts sales messaging ingredients from brand managers and applies them to the selling process, establishing an important brandinformation highway from marketing to sales. This role is especially important in the new product introduction process. Customer marketing is the adhesive that ensures collaboration among all of the players in the go-to-market ecosystem. Customer Marketing also coordinates with sellers to establish relationships at the retailer, discovering needs that can be transported back to brand managers in the form of ideas for profitable product and packaging enhancements. Universal Translator Recall, however, that marketers and sellers seem prone to miscommunication, despite their common goal, because they focus on different end users: the consumer vs. the category buyer. What good is smooth information flow if these groups have difficulty interpreting one another? Without the customer marketing function, communication between these groups tends to be a recipe for frustration and culture clash, distracting from the whole go-to-market process. Good customer marketing resources possess a unique universal translator skill that solves this issue. Typically, they ve been trained to think both like brand managers and sellers, translating data and insights from one group into knowledge that is actionable for the other. Good customer marketers think like both brand managers and sellers, translating data and insights from one group into knowledge that is actionable by the other. symmetricsgroup.com Accelerate Your Sales Performance page 5

6 To illustrate, let s use the process of building a high-impact value proposition needed to sell a brand during category review. Brand managers, of course, gather huge amounts of data, which might include: Marketplace trend data Shopper insights Category insights Consumer attitudinal and usage data Competitive data Market share data Financial performance Product technology trends Pricing analysis Analyzed for their own purposes, these data points tell the brand manager how to manage his brand. What this data, in raw form, does NOT do is tell a sales rep how to sell the brand. For that, we need a lens that interprets this data according to what s important to the retailer. In other words we need value propositions that fit our selling strategy. A good customer marketing resource, with her universal translator skills, has the ability to extract sales-worthy ingredients from this list, turn them into insights, and shape them into a value proposition that convinces the retailer to put the brand on the shelf in place of a competitor. If she s successful, it s because she has produced enough hard evidence showing that consumers will buy. Thus, to the retailer: 40% market share translates into higher turns. Premium brands represent 60% of category translates into change product mix for higher margin. 8 out of 10 consumers had this brand in mind when shopping translates into destination driver. It is the customer marketing team that possesses the lens for turning marketing data into insights and then value propositions that speak to what retailers care about. We call this consumer-infused category review planning, and it flows from brand management to the sales team through customer marketing, acting as the universal translator. symmetricsgroup.com Accelerate Your Sales Performance page 6

7 Customer- Infused Brand Planning brand Management Universal Translator customer marketing Ecosystem Adhesive sales Retailer consumer- Infused category review Market & Consumer Research If we reverse the information flow, gathering retailer demands for product and packaging innovation, we get customer-infused brand planning, which goes from sales to brand management, again via customer marketing acting as the universal translator. What Makes a Successful Customer Marketing Team Having resources who possess the ability to understand the needs, motivations and priorities of both the sales and marketing functions is a must. They re also difficult to find, so having the ability, patience and funding to train resources in both genres is very useful. Beyond starting with great resources, we ve identified three areas that are essential to the success of the customer marketing team and, by extension, the sales force: 1. Reporting structure and sponsorship 2. Role and process definition 3. Alignment Reporting Structure and Sponsorship Anyone who s worked in the CPG industry for any length of time has seen the customer marketing function report to sales in some companies and to marketing in others. There are arguments for both scenarios that are valid. Certainly the number of channels you sell to is a consideration. symmetricsgroup.com Accelerate Your Sales Performance page 7

8 Our opinion is that the reporting structure doesn t matter. What does matter is that whomever this team reports to, he or she has enough personal credibility and political capital within the organization to ensure that the customer marketing role is taken seriously. It s our observation that sellers and marketers who don t view the CM role as valuable also don t work collaboratively with each other in good faith, and sales suffer as a result. This consideration alone may determine the best reporting structure for customer marketing in your particular organization. Role and Process Definition Instituting or refreshing a customer marketing team, whether to integrate acquisitions or support organic growth, necessitates clear communication about the role to everyone involved in the go-to-market process. Sellers and brand managers in particular must understand how and when to work with this team. It is up to customer marketing to 1. Define their role clearly 2. obtain buy-in from all stakeholders in support of the role 3. Communicate the role definition clearly to the entire go-to-market ecosystem 4. Enforce accountability for the data and insight contributions that both brand managers and sellers are expected to make throughout the go-to-market process We find the best way to do this is to explain to brand managers and sellers the benefits of working with the customer marketing team; in other words, articulate what s in it for them. For sellers, the benefit is obvious: high-impact value propositions tailored for each customer for use during category review a clear competitive advantage. For marketers, it might be a lessened workload answering one-off information requests from sellers, and obtaining product and packaging requests from strategic customers is certainly valuable. symmetricsgroup.com Accelerate Your Sales Performance page 8

9 But the real value for both teams is this: Having a high-functioning customer marketing team puts more product on the shelf. Period. Having a high-functioning customer marketing team puts more product on the shelf. Period. Alignment Finally, the goals and objectives of all three constituencies sales, brand marketing, and customer marketing must be in alignment and reflect company strategy itself. If marketing s strategy is to win by building consumer preference for existing brands, then customer marketing must assist sales with building retailer preference for these same brands. If marketing s strategy is to win with rapid product innovation, then customer marketing must assist sales with the new product introduction process. Conclusion All of these factors, when implemented together, can dramatically increase sales effectiveness. And everyone, whether Capulet or Montague, benefits from the lowered anxiety and heightened collaboration that stems from working with a group that both speaks your language and understands your motivations and priorities. symmetricsgroup.com Accelerate Your Sales Performance page 9