Posts Tagged "CPG"

Today I came across an article on MarketingProfs.com titled, “Brand-Building: The Limits of Engagement,” (registration required) featuring some sobering statistics for brand marketers focused on developing loyalty with as many consumers as possible:

• Half of your loyal buyers this year will not be loyal to you next year (Catalina Marketing’s analysis of tens of millions of shoppers).
• The 20% of buyers who account for 80% of sales includes super-heavy category users who might even prefer another brand and purchase that brand more.
• On average, 30% of loyal buyers do not have attitudes about your brand that support their loyalty and are the ones who are most likely to defect.
• For most brands, only a single-digit fraction of your customers connect to you via social media.

So despite so much emphasis on developing loyalty programs and the hype surrounding social media’s influence on consumer behavior, the facts suggest brand marketers are struggling against a tide they cannot overcome.  The article also raises interesting statistical research showing that successful brands connect not only with frequent, loyal customers, but all potential consumers:

“…you must find more people to become loyal, but you also must increase your share of purchases among those who buy your brand less than half the time.”

To achieve this, the author suggest marketers focus on “activating” their brands with consumers, which entails “imaginative shopper marketing, visibility, packaging (which is your ‘ad’ that every buyer sees), the right configuration of features, the right price, findability as people search and pre-shop digitally, and buying ads in special-interest magazines… just to mention a few ideas.”

I suggest that marketers identifying with these challenges look to mobile marketing tactics such as interactive text message promotions and sweepstakes that can pull consumers into perpetual dialogs with brands.  Promoting such programs at and around the point of sale is one approach brand marketers can use to influence less loyal consumers to consume their products.

The statistics and statements like the following suggest it’s imperative for marketers to look for ways of engaging as many consumers as possible with their brands.

“The marketing approach that calls for building brand engagement isn’t wrong, but it’s incomplete.  It doesn’t help you figure out how to grow the half of your sales that comes from less-loyal buyers who find multiple competing brands are acceptable.”

Given the reach offered by text message-enabled consumers and proven response rates in the 20-30 percent range, mobile promotions are a logical solution to this challenge.  Engagement platforms such as that offered by Interactive Mediums provide marketers a multitude of approaches to suit any promotional requirement.

Given how we have talked about “direct branding” as an application of mobile marketing for CPG marketers, this article on the Digital CPG Blog a couple days ago stood out.  Apparently, direct to consumer selling by non-CPG manufacturers is the fastest growing online retail category.

Titled “Mattel Goes Direct to Consumer Online,” the post describes how Mattel, the U.S.’ largest toy manufacturer, is selling its products direct to consumers via a new ecommerce web presence.  Although ½ of its revenue derives from just three large retailers, Mattel is able to do this apparently without disrupting traditional sales channel relationships.

The author posits why the CPG industry doesn’t also adopt the approach, given a similar dependency on a small universe of distribution channels.  I suggest one reason is that traditional CPG products remain the domain of the in-person shopping experience facilitated by real stores, as opposed to the web.

For that reason, direct customer relationships can be established and developed by CPG marketers today using mobile marketing techniques applied to programs such as loyalty, product trial and couponing.  Mapping your marketing strategy to the mobile channel is a good first step.

The Common Short Code Administration website lists a number of “application providers” which offer software/technology services geared around text messaging.  None of course is as impressive, proven or visionary as Interactive Mediums, but like any company, rising above the noise in the marketplace can be challenging.  This noise is amplified by established companies in other marketing technology and services segments entering the fray and trying to skim revenue from firms focused on helping businesses leverage the mobile channel.

I have made past references to some of these firms but thought taking it a step further and outlining how we see options in the marketplace might help buyers make a decision more easily and quickly.

We view mobile as an interaction channel inclusive of technologies which help marketers implement strategies around the mobile customer experience.  For many businesses, be they in the retail, consumer packaged goods (CPG) or broadcast communications segments, mobile is as much about engaging customers while “on the go” to achieve some business objective (sales, loyalty, brand affinity, etc.) as it is a “feature” to be sourced from a current marketing service or system.  For this reason, “Active Customer Engagement” is as appropriate a label as any to describe the capabilities a firm like Interactive Mediums brings to its customers.  It is also in the crosshairs of companies in the email marketing, marketing services, CRM platform, and creative services segments.

The accompanying diagram illustrates the general approach each of these segments takes to mobile within their respective portfolios.

Email Services Providers: Mobile as text messaging complement to email delivery/additional channel for communications.

Marketing Services Cos: Mobile as text messaging/additional channel of communication as part of diversified marketing services utility.

CRM Platforms: For B2B, mobile means field sales enablement, for B2C it means text messaging complement to email.

Agencies/Creative Services: Basis around which advertising, branding and marketing campaigns are built.

Each of these touch on an attribute of Active Customer Engagement, but none fully meets the requirements of catering to the mobile customer experience.  We realize marketers with pre-existing relationships with firms in these segments owe it to themselves to evaluate them as options when approaching the mobile channel – and in some cases may elect to utilize them.  For this reason, Interactive Mediums takes an open approach which allows us to fully deliver the benefits of the mobile customer experience to clients yet integrate as necessary with others in the ecosystem to ensure clients achieve their objectives.

Today I came across part 3 of a story on a site called Retail TouchPoints, titled “Two Quick Takeaways On Where To Start With Mobile In Retail.”  I could not figure out how to access the prior two installments, but was glad to at least see the third.  The author describes retailers as a whole playing catch up with today’s mobile savvy consumer, a position no business wants to in but especially when the economy is struggling.  I suggest retailers take the advice here as a “call to mobile action” and begin taking an aggressive, yet measured approach to the mobile channel as prescribed by us in this recent paper.

If retail marketing leaders are as fixated as described in the following quotation, I strongly suggest they tap into knowledge bases like Hello Mobile to see how retail and other industries are moving beyond the novelty factor to leveraging mobile strategically:

“The retail CMO is looking for some new-fangled, high-tech way of engaging with this itinerate shopper.  The sage truth is that the marketing department is chasing shadows…Instead of focusing on the consumer and how they are leveraging mobile in their stores, they are investigating widgets and apps that have little to no reach or frequency in their consumer base.”

The author lumps retailers and packaged goods firms together in making two recommendations to their marketing leaders:

• Learn from history: We blogged about this idea in a slightly different context here, but the gist is that the desktop computer/Internet/email drama is again playing itself out in the mobile space and leaders unable to see the similarities are missing the boat:  “I-want-one-too CEOs are running to their agencies and IT department and developing application that only five percent of consumers are returning to after a lonely month on the phonetop.”
• Learn from your consumer: We talk about a focus on the Mobile Customer Experience, and the author wisely recommends observing your customers in the store environment to see how they use a mobile device while shopping.  “They are doing two things in your aisles: using their phones to browse and text. Is the consumer opening the browser to find tips and information to help with their shopping experience? Are they messaging home for the shopping list? Possibly. But the shopper is certainly not scanning 2D codes with their phones. They are not opening the security on their Bluetooth settings for inbound offers. They are not all downloading your app to their phone.”

The greatest challenge marketing leaders have is knowing how to start and who to partner with to realize their mobile aspirations.  There are numerous technology, consulting and agency resources ready with capabilities and proven successes to share best practices and prescribe the best way for retailers and packaged goods companies to begin using mobile strategically to develop and improve customer relationships.

Today I came across this post from InfoSys’ Retail and CPG blog, posing the question of whether or not retailers should “go it alone” in mobile with their own application, versus partnering with a third party aggregator to reach the greatest number of consumers, quickly and most cost effectively with some service like coupons.  I had not come across this question or characterization of applications before and think it’s an interesting one to consider in light of our focus on the Mobile Customer Experience.

On the side of “going it alone” are benefits such as: 1:1 marketing potential, meeting custom requirements, ensuring intellectual property and data protection, and easier integration with internal systems.

On the side of partnering with a third party are: convenience, market reach, lower initial cost of ownership, and faster time to market.

The last point that straddles both is Shopper Loyalty, which can be met via some combination of both individually developed and branded applications and third party services.  Ultimately, that conclusion is the answer to question; it fully depends on the retailer’s business objectives then determining how best to meet them with available mobile marketing approaches.  At Interactive Mediums, we call this process “Mapping Mobile to Your Marketing Strategy.”

Today my colleague Jeff Judge passed me this article about the debut of a new multi-touchpoint couponing system designed for use by consumers, retailers and brand managers.  The focus of the solution is around consumers, the way they receive information, and most importantly the way they buy.

Heretofore, my thought process around mobile couponing as an application involved digital renditions of paper coupons represented on a mobile device, which were then scanned at the point of purchase.  Or, more realistically, some collection of mobile coupons represented on a mobile device that are scanned en masse at check out, since that is how shoppers usually redeem coupons.

The beauty of this new offering, however, is that the shopper redeems their coupons as they would a loyalty card discount – they  supply the cashier with their card and coupons are processed as products are scanned.

Participating shoppers now have a digital coupon account associated with their loyalty card, and this couponing bin serves as a repository for offers accepted by shoppers via interactive media such as online banner ads and mobile messages.

Perhaps the real beauty of this solution is that it offers value to both consumers and their suppliers and marketers.  Consumers save time by no longer clipping coupons, while brand managers receive real time data about coupon redemption and retailers gain equally fast insight into shopper behavior.

This is yet another example of data centric value taking hold in the mobile space.  Brand managers can create and execute coupon programs direct to web and mobile much faster without need for the typical print/distribution cycle, accelerating their test/trial efforts toward developing stronger brands, while retailers stand to gain from increased shopping basket value due to better targeted and more effective coupon programs.

For mobile marketers the lesson is apparent; when crafting a program incorporating the mobile channel, take on the viewpoint of your target customer and how they want to interact with you.

One of the challenges facing brand marketers is the distance between themselves and their customers, which is a function of the brand or consumer packaged goods (CPG) business model. A distribution or value chain exists to bring branded products to consumers and includes many entities, with the last mile typically owned by either retailers or wholesalers.

Brand marketing has thus focused on panel or other research and development of product attributes to be communicated en masse to an audience as targeted as media allows. What’s fascinating about the mobile channel, among many things, is how it can help brand marketers move closer to their customers than ever before, develop relationships with them, learn about their behavior and use this insight to drive increased consumption of the brand’s product.

This Customer Relationship Management (CRM) capability enjoyed by B2B marketers almost exclusively to date can now be extended to Business to Consumer (B2C) marketers. Unlike media that relies on consumers to observe advertisements on billboards or flyers, or even digital media like email and web which requires access to a computer, mobile media allows brand marketers to initiate contact with and develop an ongoing dialog with their customers directly.

The “on the go” consumer, with their mobile device or phone turned on and ready to submit and receive messages or other content, has been shown responsive to incentives and messages designed to drive interaction with brands. The first step, ironically, is for the marketer to utilize traditional media to communicate a short code and keyword that enables consumers to opt into receiving communications from the brand. Thus begins a relationship which creates a data asset that builds over time, providing previously impossible actionable insight into a brand’s customers.