VANTAGE POINT: Challenges of Connecting the On and Off-Line Life of Shoppers

By Kathryn Gramling, Global VP of Corporate Marketing, CAS

The pursuit to identify and gain permission to enter the on-line space of millions of consumers is now the Holy Grail for modern consumer goods manufactures. Today, sales and marketing organizations are diving into the unknown of Facebook, MySpace, YouTube and Second Life in hopes that connecting the on and off-line life of shoppers will drive better brand value and higher profits.

The question I have is what is the real impact of Second Life if we cannot measure and understand the impact of our brands on the shopper's First Life? As recently as 2007, only 42 percent of consumer product (CP) companies were measuring trade promotion effectiveness and, of those, the great majority was not able to assess profitability until six to eight weeks after the promotion. AMR predicts that while the "average" CP company will spend 14 percent of revenue on trade promotions this year, only 54 percent of those promotions will be evaluated, because companies lack the capability to do so.

From the field sales perspective, CP companies still struggle to spend time selling. According to research done in mid 2007 by Customer Think, the average field salesperson spends more than 40 percent of their time on non-selling related activities. Increasing the efficiency and improving the productivity of the field sales organization with regards to the execution of store visits, including job list related activities i.e. product and plan-o-gram related surveys, customer interviews, selling-in new promotions -- must be a priority to improve margins and profitability.

Whether it is the on or off-line life, it all comes down to the integrated processes from sales and marketing and your relationship with your customers. As a collaborative partner, the CP company is in a very strong position to drive margins and profitability by reducing out of stocks, increasing order quantities, selling effective consumer promotions. But without a foundation of shared processes and information a collaborative partnership is impossible.

There is no doubt that today the Holy Grail must be how a brand's position or impact online extends seamlessly to the in-store execution. At a very least, this has become a mandate for you; to improve the integration of your sales and trade promotion processes. It means field sales cannot be disconnected from the brand marketing goals and consumer activities. It requires REAL mobility in your sales force to move beyond simply PDAs and drive effective, powerful and meaningful information to the POS that connects the good work of brand marketing and selling. It means being able to measure customer profitability by SKU by day. It means trade promotions need to be managed and optimized before executing, so accurate incremental sales lift is understood and planned for throughout the supply chain.

So what is the roadmap to connecting a shopper's First Life with Second Life? It begins with connecting both trade promotion management and the planning and execution of field sales across your organization. As a general rule, CP companies field sales should be able to:

--Determine customer targets and profitability by SKU by month

--Review and reprioritize brand portfolios by quarter

--Establish consistency in selling processes across sales teams across geographies

--Negotiate shelf share and shelf location by SKU by customer

--React quickly to changes in the retail environment

--Better understand consumer behavior as a result of feedback from field sales

The field sales activities should also be directly connected to trade promotional activities. Again, at a minimum, CP companies should be able to:

--Execute a consistent trade promotion management process across geographies or within at a minimum within a country

--Run pre- and post event evaluations

--View exception report by individual product by retail account

--Execute consistent field communication on promotion structure and plan-o-gram compliance

While CAS believes strongly these are core capabilities for world-class CP company sales and marketing, both Gartner and AMR have made strong recommendations to this effect as well. So before you risk losing market share or worse - shopper loyalty to your brands, it seems imperative that CP companies develop core capabilities in retail execution and trade promotion management for the shopper's First Life!

 

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