The journey to CG commercial excellence maturity

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The pandemic has accelerated and heightened consumer expectations more than we've seen at any other point in history. 

Increased global awareness about the importance of a healthy lifestyle has driven consumers to explore healthier brands that promote overall cognitive wellness. Social and personal values have become equally as important, with more than 47% of consumers stating they would switch products if a brand went against their social or environmental values.

In the meantime, due to the inflation caused by the Ukraine war and the pandemic, the subsequent economic pressure has driven consumers towards discounters and private labels. Private labels are entering the fourth wave, where retailers address changing consumer expectations with high-quality products offered at lower prices.

The omnichannel shopping experience and an explosion of new markets have forever changed the traditional landscape of physical shelf space and shopping carts. 

Consumers now have total control of where and how they buy, along with unprecedented access to products and fulfillment options.

These advancements have put increasing pressure on retailers and, in turn, consumer goods (CG) organizations that aim to provide personalized and consistent cross-channel experiences for consumers.

 

New customer-centric operating models

To respond to these changes in consumer behavior, retailers are continuously looking for trusted business partners who have a deep understanding of their business and can help them be agile and grow.

The foundation of this trust is a deep, emphatic relationship built on transparency, collaboration, and mutual benefits. The CG companies that have invested in a customer-centric approach and building trust with their retail partners bring in 5.7 times more revenue than their competitors.

A customer-centric mindset needs to be built into every layer of a CG commercial organization, where commercial teams are encouraged to prioritize customer success and customer growth factors are built into their own success KPIs.

When we take the time to understand our customers, including their goals and pain points, we can better understand how we need to market to them. Then, we can merchandise, simplify orders, and be more equipped to offer services and products that are personalized to them.

Equally, CG companies are looking beyond traditional supply chain and product development models to keep their competitive edge. We see continuous evolution into new operating models, which includes the adoption of dynamic and data-driven customer segmentation, the expansion of the inside sales rep process to act as an extension of the field sales team and enabling on-demand channels through self-service and remote engagement. 

Therefore, there is an ever-increasing need to adapt to a more data-driven approach to sales and go-to-market. This would ultimately enable commercial teams to get closer to their customers and provide them with personalized offers, content and value-added services across all channels.

I see four foundational steps as key success factors for achieving this. These are factors I have seen within the leading brands we've been working with.

 

One unified view of the customer

To build a lasting customer relationship, first, we need to gain a deep understanding of who our customers are, irrespective of how they engage with us.

Today, most CG organizations have a great repository of customer and consumer data, but they are often disconnected from one another.

The first step in the maturity journey is where leading CGs enable a single industry data model. This is shared across multiple brands and markets to consolidate customer and product data and content into a unified view.

This single profile will allow you to digitally represent your customer, their business, challenges and preferences. You can then connect online and offline data into a unified view and give visibility to customers' order history, their interactions across channels, and the sentiment of those interactions.

It would provide a 360-degree view of the customer to everyone in your commercial organization, from marketing to key account managers and sales. This way, everyone can get a pulse on the health of each and every customer, and serve them better during those moments of truth in a customer journey.

 

Micro-segmentation and omni-contact strategy

The next step in the maturity journey is marrying up consumer insight and demographic data with customer profiles to be able to understand the most important occasions for a retail outlet and their missions to target.

That way, not only do we have information about an outlet, its characteristics, location, and so on, but we also get an insight into the demographics of the outlet's consumers.

Underpinning this information with analytics and AI will then allow us to micro-segment our customers, not only based on their current value and behavior, but also their propensity to grow.

As a result, we can differentiate an outlet with lower potential on the outskirts of the city, which may have already reached its potential, from an outlet with higher potential in a growing consumer neighborhood.

We can then adopt the most cost-effective omnichannel strategy and set the optimal frequency of contact for each micro-segment. For instance, we can ensure a higher frequency of face-to-face visits for the high-potential segments and more digital contacts for segments with lower potential.

 

Precision selling and personalized engagements

Establishing this foundational data brings us to the notion of precision selling.

Traditionally, most CG organizations would have created an annual plan based on the previous year's data and learnings. Instead, enabling micro-segmentation and a real-time view of a customer allows CGs to evolve their planning from a one-off exercise to a model where they can conduct more real-time and dynamic planning. 

Dynamic micro-segmentation helps us understand which outlets present the biggest opportunities, enabling us to prioritize them for future interventions. This means we can use real-time customer/consumer insights to proactively improve assortments, identify promotions with the highest impact, and fine-tune plans based on real-time needs. We can then use dynamic content to tailor the right promotions, the right assortments and the right messages for customers on the right channel.

So, instead of planning once a year and obtaining learnings the year after, we can establish continuous improvement cycles. Then, by using dynamic content, we can bring customers along the journey with us and help them visualize what "good" looks like in terms of the next best promotion, assortment or new product introduction.

 

One team – connected planning and execution

Creating one connected team is key to unlocking more growth opportunities. However, whilst the number one focus is meant to be on the customer, CG internal commercial teams and processes often work in silos and incentives are often internally focused.

CG organizations need to think about breaking down the silos across the value chain and re-think their commercial framework to be more end-to-end. This way, they can create one connected team around the customer.

This would require an investment to connect the front and back office, putting customers at the heart of your commercial operations, and linking everything that revolves around a customer, all the way from category planning to execution to customer support.

 Taking deliberate steps to:

 

  • Integrating marketing and sales to ensure that brand messaging is consistently implemented and customer experience is personalized. 
  • Integrating point-of-sales and retail execution data into key account management to allow key account managers to spot opportunities out in the field, in order to drive maximum conversion.
  • Ensuring online and offline executions are joined up.
  • Giving everyone a 360-degree view of the customer and real-time access to field execution level data, plus customer interactions and activities.
  • Creating a set of binding KPIs that are shared across the commercial teams. 
    • We often see that revenue KPIs are prioritized over trust, and that planning is based on growth-based KPIs, internal metrics and last year's performance. CGs need to move to collaborative planning based on trusted relationships, shared data and mutual wins. Plans need to be dynamic and adjusted based on listening and acting on insights supported by data.  Please se our CX blog for more details on how to create customer-binding KPIs.

Some leading CGs are taking this approach to the next level, creating in-country squads. These squads involve marketing, sales and category management being on the same leadership team to ensure they're actually working together, hand-in-hand. This drives transparency and accuracy across the organization.

 

Last thoughts

Breaking down the silos in your consumer goods organization will allow you to make faster decisions and meet consumer demands, but it takes leadership and courage. It's a critical endeavor if you want to be able to compete in a world where consumers expect personalized promotions and purposeful engagement.

The key to this is adopting a customer-centric approach and re-thinking KPIs to be more customer and growth-focused, instead of just focussing on measurement, compliance and product. This extends across both front-office and back-office operations and includes connecting the teams around the customer.

The next wave of opportunity is to create a horizontal execution framework that is mapped to your customer journey. Lastly, you will want to focus on getting actionable insights and creating a more proactive feedback loop,  so that you can sense customers' needs and respond in real-time.