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A Digital Approach to Driving Direct Customer Relationships in the CPG Digital Quasar

A Digital Approach to Driving Direct Customer Relationships in the CPG Digital Quasar
October 10, 2017

We are living in the age of empowered customer, where individuals are connected via mobile and social media and have easy access to information on user experience in the form of reviews.

Today, there are plenty of ways for manufacturers to interact with people like you and me, who are the end users of products and are either satisfied or displeased. For example the automotive, telecom, financial and high-tech industry, to name a few, can connect with their customers directly via channels like email, Facebook, and Twitter.

A closer look at CPG/Retail segment

The sad reality of most CPG/Retail manufacturers is left out in the traditional business models, where most of the sales happen in brick and mortar stores or multi-product retail chain. A typical example would be a grocery store selling branded corn flakes or a branded shoe sold in a retail store like Target®™ where product manufacturer knows very little about the end customer.

Challenges – Not knowing your customer poses many challenges for the manufacturers in the form of:

  1. New product ideas and innovation
  2. Targeting the right segment of customers
  3. Lack of Potential cross selling and upselling opportunities

Secure your customer's loyalty by driving direct #CRM using #Digital Innovations #CPG #Retail

Key Solution Tenets:

  1. Digital reward programs
  2. Increase brand presence in social media
  3. Superior CX using omni-channel omni-presence

Digital reward programs

Previously, reward programs were predominantly carried out using print based coupons in a magazine or by coupon clip services like redplum®. Though manufacturers could promote a specific product by using this method, it didn’t provide much needed insight into the customers and their usage pattern.

With the advent of smartphones, the entire process of marketing and promotion management can be digitalized and direct customer details can be captured. The process starts with the customer registering and subsequently making use of the digital touch point to execute the actual promotion.

Doing so can help capture the direct customer along with their purchasing patterns like frequency, promotion utilization, etc.

For example, a diaper manufacturer can create a smartphone app that provides specific coupons and rewards to loyal customers. This can be through a point systems, related to product promotion or product awareness. Given below are the advantages of the digital method over the traditional print coupon system.

Area Traditional Methods Digital Methods
Possibility? Granularity Possibility? Granularity
Product sales improvement Yes SKU level Yes SKU level combined with demographics
Customer loyalty measure No   Yes Detailed up to demographics and privacy limit
Targeting Yes Very border segment Yes Can be narrowed to specific customer with personalization
Measuring effectiveness Yes SKU level Yes SKU level combined with demographics
Cross selling opportunity No   Yes Fine grain promotion based on behavior

Increase brand presence in social media

Social media plays a vital role in how mass communication and information is handled in the 21st Century. On the other hand, direct customer relation is enabled by social CRM.

Social media has transitioned traditional marketing, purely a space for passing on the information to the customer, to a more engagement based direct customer integration with the possibility of providing personalized messaging and improve customer relationship.

With social media, you can directly gauge metrics like:

  1. convent view frequency
  2. repeated audience
  3. likes, dislikes
  4. content acceptance rate
  5. volume/search trends
  6. forward

Social media has opened up a new direct channel with the customer by following through interactions on brand pages in social media sites. If done properly, this can produce immense value in understanding the customer.

Moreover, social media plays a vital role in making the customer promote the brand. When a customer likes, comments or follows a brand, those in the customer’s circle become aware of the brand.

Superior CX using omni-channel omni-presence:

Traditionally, CPG business has had a one of its kind model, where the involvement between manufacturing and the actual buyer is very low. The shopping habits of the customer in retail/CPG industry are ingrained.

With the advent of digital, the path customer follows to make the purchase is changing drastically. Omni-channel means a seamless experience for the customers, no matter how they choose to engage with a brand. Whereas, omni-presence means availability of the product, no matter how the customer chooses to make the purchase.

All that matters is how the manufacturer “seizes the opportunity” and provides a hassle-free omni-channel experience.

Omni-channel can be better explained with an example. Let’s consider a diaper manufacturer who has a significant presence in the retail domain. When the manufacturer finds a way to register the customer digitally with a rewards program, and make their product available via various online stores, like Amazon a seamless customer experience will be enabled across channels, resulting in an omni-channel experience.

Omni-presence will by default be assured when the brand makes itself available by listing on online channels like Amazon.com, Jet.com, etc.

Today, in addition to omni-channel and omni-presence,

new trends are emerging in the market place like:

Automatic-buy: Where an online intelligent shopping agent triggers recursive orders on a periodic basis. For example, if the customer knows that a laundry liquid is used up in two months, the system automatically orders a new one on the seventh week.

Intelligent Devises: IoT intelligent devices are being used to collect data to serve customers more efficiently.

Conclusion: In today’s digital world, the only way for CPG manufacturers to be relevant in the market place is to capture the customers by providing superior CX while emphasizing on direct relationships. The digital world provides multiple technologies that can be leveraged to make the important connect that was earlier inaccessible. These are no more theories, but rather a reality where many multi-brand retailers have already started gaining success.