What’s keeping Customer Marketing Directors awake at night?
We have been speaking with a range of directors at leading consumer goods companies about the future of Customer Marketing and the capabilities required to win. From our conversations it’s clear that while there are many different definitions for Customer Marketing, there is broad consensus on the need to shake off outdated ways of working. It’s time to embrace a truly shopper-centric approach.
How do consumer goods leaders describe Customer Marketing?
When you hear the words ‘Customer Marketing’ – what do they mean to you? “The bit in between marketing and sales”? Leading FMCG Companies are using many different definitions for Customer Marketing:
- ‘Aligning marketing and sales strategies to build shopper engagement at a category, portfolio and brand level across the path to purchase’ Leading alcohol supplier
- ‘Building high-impact strategies and messaging that conveys maximum value about our products to shoppers and retailers’ Leading food manufacturer
- ‘A strategic sales function that incorporates Channel Strategy and Planning, Category Management and Shopper Marketing in order to convert more shoppers to purchase our categories and brands more often’ Leading soft drinks manufacturer
However it is defined, the scope of the activities typically include Shopper Marketing, Trade Marketing, Channel Strategy, Category Strategy, Category Management and eCommerce. It would be fair to say that Customer Marketing carries with it a certain level of mystery and does not have the same clarity of definition and role that Consumer Marketing and Sales has.
Adopting a Shopper-Centric approach
All the companies we spoke with agreed that traditional Customer Marketing techniques need to evolve from a product/category focus to a more shopper-centric approach. Shoppers do not shop categories. Shoppers shop with a specific goal or ‘mission’ in mind that links back to a consumption/usage occasion e.g. I need to buy food for dinner tonight. So, if the link between shopper needs, shopping mission and consumption occasion is so important, why, then, are companies still so focused on managing ‘categories’ in isolation?
The planning process needs to extend beyond the confines of the retail shopping environment - whether physical or digital - to include the pivotal moment of when the purchase decision is actually made, regardless of when/where this actually happens.
This new planning process should also reflect the changing way shoppers are shopping; the demise of the weekly shop, the increase in number of retail channels shopped, eCommerce and social commerce and ever the increasing expectation of seamless omni-channel experiences. Shopper’s expectations are being radically reshaped by new technology enabling digital assistants, new services such as auto-replenishment, and subscriptions for low engagement products, new direct to consumer brands and hyper-personalisation enabled by additive manufacturing, to name just a few of the factors overturning the traditional shopper journey.
Finally, the process should release the myopic view of categories in isolation and consider the total purchase journey across the aisles, zones and overall characteristics of each newly emerging and increasingly blurry channel.
While the perceived need to shake off out dated ways of working to keep pace with shopper expectations is emphatic, the industry still struggles with what a more advanced approach should look like.
What’s keeping Customer Marketing Directors awake at night?
The three common Customer Marketing pinch points keeping FMCG Customer Marketing Directors awake at night are:
- HOW they can evolve Customer Marketing practices to put the shopper at the centre of decisions. For example, placing more emphasis on understanding the shopper prior to building the activation plan leading to mission based solutions versus a product category led approach
- HOW to structure for success, considering changes in the retail channel landscape and different stages of market evolution and maturity. This would help tackle the shift away from conventional supermarket retailing to a plethora of alternative shopping environments from discounters, to convenience to eCommerce and social commerce
- HOW to sell into the organisation the need to elevate Shopper and Channel thinking to the same level as Brand and Consumer. It is excelling at the intersection of all four that delivers growth
Many leading organisations also commented that whilst changes had been made to organisational structures to include a more strategic Shopper Marketing team in recent years, they are still following a cut down version of the 1995 Efficient Consumer Response (ECR) 8 Step Category Management Model which feels stagnant and outdated.
Furthermore, most companies we spoke to score themselves low on the ability to apply Customer Marketing in an omni-channel / digital world. This self-reported capability gap is one that many companies are still on the journey to address. Yet today’s shoppers are already there, so there is no reason why the consumer goods world should be behind them. The talent, operating models, processes and technology that enable shopper-centric Customer Marketing are all accessible in today’s market. It can be done.
So, what is the future of Customer Marketing?
The evolution of Shopper-Centric Customer Marketing is within grasp, giving a new role and purpose to Customer Marketing to deliver fully integrated solutions that enhance the shopping experience.
To deliver this will require a change across all drivers of capability. The approach should be top-down and built with non-negotiable commitment across all functional areas, with a mutually beneficial focus on the shopper.
- Organisational structure alignment – in an aligned eco-system, channel, category and shopper roles can be redefined to manage the ‘Shopper Experience’. They understand the needs, mind-set and behaviours of shoppers within distinct channels. Teams are tasked with enhancing the overall shopping experience across the purchase journey aligning it to meet the retailer’s strategy and offering differentiation (where to play, how to win, what to do, what good looks like)
- Integrated consumer/shopper insights – new technologies bring a wealth of new shopper data. It’s essential to connect shopper missions back to the intended consumption/usage occasion. A thorough understanding of the shopper 5Ws in relation to the consumer 5Ws, gives greater insight into the point of purchase decision and not just the moment when the shopper enters the store (physical or virtual). Understanding the drivers of channel choice, the purchase decision journey, the most impactful touchpoint to influence, and the substitutional categories/brands that fulfil the same need help identify ways to enhance the shopping experience and unlock new growth opportunities
- A defined Shopper Experience process or ‘way’ – the next generation process moves away from focusing on singular categories to translate insights into mission based solutions that enhance the shopping experience. Coupled with the required go-to-market strategies for where investments should be made
- Skills development – turning insight into real impactful solutions depends on developing critical skills such as data analysis, problem solving, creative idea generation - all coupled with storytelling and influencing skills to land the vision both internally and externally
- Shopper-Centric culture – ensuring that shoppers are part of the DNA of an organisation will be enabled by a strong senior management team elevating the importance of the shopper and the channel to the heart of business decisions.
Taking a shopper-centric approach encourages a broader, more technology enabled and integrated perspective - a break from current paradigms which have been in place for over 20 years. Embracing the ‘shopper’ as a company capability is, at its essence, the core of how Customer Marketing can evolve.