PLAYING FAVORITES

Account-specific marketing creates both opportunities and challenges for suppliers, retailers, and agencies.

Account-specific marketing. Customer-specific marketing. Custom-tailored marketing. Call it what you will, but suppliers are paying a whole lot more attention to key accounts these days, leading to substantial changes in the way promotions are created and executed.

There are a variety of forces driving the account-specific train – consumer buying habits, retailer consolidation, manufacturer budget issues – and there appears to be no stopping the momentum. Not that anyone would want to, anyway, since the marketing world is more than willing to adjust to an efficient and more cooperative method of doing business.

“We’re well aware of what’s happening in the retail industry, and acknowledge the needs that certain accounts have,” says Doug Fulton, co-marketing manager at Pillsbury, the Minneapolis-based packaged goods division of U.K. conglomerate Diageo PLC. About a year ago, Pillsbury established a co-marketing department to create teams consisting of marketing and sales personnel (as well as outside agencies) to deal with top accounts.

“We have co-marketing managers working with customers that we’ve identified as being strategic partners,” says Fulton, declining to identify who they are. (Although, since the company has 13 teams, it’s safe to assume that the list includes the nation’s top mass retailers and grocery accounts such as Wal-Mart, Kroger, and Safeway.)

“We collaborate with them at the customer level to jointly identify strategies, and then come up with programs,” Fulton adds. National promotions for such brands as Pillsbury, Progresso, Old El Paso, and Green Giant will feature customized campaigns for the top accounts. Smaller retailers will get to choose from a menu of three or four options.

“More and more marketers are getting into customer-centric teams, which means they’re moving the marketing power to their top 10 customers and creating teams around those customers,” says Paul Builter, director of account-specific marketing at Clarion Marketing and Communications, Greenwich, CT, whose clients include Kellogg Co., Whirlpool, and, until recently, Pillsbury. “It’s really a numbers game, now that 50 percent of their business is being done with their top 10 customers.”

Pick Your Partners

That doesn’t mean suppliers are ignoring their mid-level and smaller customers (although from some vantage points, it certainly may seem that way). But the realities of the marketplace require special attention to be paid to the bigger players. “Generally, you can’t take a program any deeper than your top 10 accounts,” says one agency executive. “It just takes too much time, money, and effort.”

One notable recent exception was Artisan Entertainment’s spring effort for the video release of The Blair Witch Project, which included account-specific overlays with 30 different retailers. “That’s 30 promotions on top of all the national efforts,” says Patti Regan, president of Los Angeles-based promotion agency The Regan Group, which handled.

“Our experience is to approach the retailers as marketers,” Builter says. “They are a brand, and they have to face the same things that marketers do. They are developing programs and telling suppliers, `Here’s what I want you to do.'” Gone are the days when suppliers could create a national promotion and come to key accounts with five different overlays. Now it’s a national promotion with overlays dictated by five different accounts.

“The real challenge is for manufacturers to change their mindset a bit,” observes Bill Sinnott, group president at Ryan Partnership, Westport, CT. “They really have to say, `I have some needs and I’m going to work with the retailers.’ So many want to develop a program and present it to an account. The better way to go is to say, `What does Wal-Mart want to do, what are their objectives?’ Find the hot buttons of an account, and then you can customize programs against them.”

Different Strokes

Ryan’s Dallas-based ethnic-marketing unit, PanaVista, helped implement an account-specific promotion for Mott’s, Inc.’s Clamato tomato juice brand last year that neatly demonstrates this collaborative “hot button” approach to marketing.

“Over the last year and a half, we’ve charted our strategic course,” reports Aditi Joshi, marketing manager at Mott’s headquarters in Stamford, CT. Based on the company’s qualitative and quantitative research, part of that strategy was to steer Clamato to the Hispanic community, initially in the Southwest. There, Mexican-Americans not only have an affinity for Clamato, but enjoy it mixed with beer in a drink referred to as Red Beer. “Our research shows that more than 30 percent of Clamato consumers drink Red Beer,” Joshi says.

Clamato’s marketing team approached the folks at Circle K (the convenience-store arm of Stamford, CT-based Tosco Corp.’s retail division), and promotional partner Anheuser-Busch, St. Louis, whose Budweiser and Bud Light brands happen to be the biggest sellers among Hispanics.

Neither Circle K nor A-B knew much about the Red Beer phenomenon, but Clamato’s research was enough to convince them to test a promotion in 900 stores for the three weeks prior to Mexican Independence Day on Sept. 16. A-B brought in St. Louis-based agency Rio Promotions Marketing and Design to assist.

Supported by radio ads and floor decals, the program featured 16-ounce bottles of Clamato on special vault racks affixed to the insides of cooler doors, right near single-serve bottles and 12-packs of Bud and Bud Light. “The results were phenomenal,” Joshi says, with Clamato sales for the promotional period catapulting 34 percent over the previous year, and Bud and Bud Light sales climbing six percent.

Circle K has invited Clamato back for a similar effort this year, although Joshi plans to expand the program to at least 2,000 outlets in the Southwest and the New York City region and include grocery and food-service accounts. “We can build it to suit their needs,” Joshi says.

Copy Cats

While the call for account-specific programs has long been made in the grocery industry, other retail categories have only begun to use the strategy.

KitchenAid, a division of Whirlpool, Benton Harbor, MI, recently began a pilot program that will serve as a trial balloon for wider-scale custom promotions among the brand’s 100 or so “champion accounts,” as the appliance maker calls them.

Working with Clarion, KitchenAid has implemented a store- within-a-store concept with two mid-level retail chains, H. H. Gregg Appliances in the Indianapolis area and Brands Mart in southern Florida, and a smaller account in the Philadelphia area, Gerhards Appliance. “We devoted a certain amount of square footage within each store for products and made it into a brand experience,” explains Julie Fritz, marketing manager for KitchenAid Food Preparation. The setups include an array of KitchenAid appliances in custom-designed areas. Besides showcasing the products and the brand, retailers use the displays to conduct live cooking demonstrations.

The process began when Clarion met with each account to assess its particular customer profile and what kind of KitchenAid products to feature. Brands Mart sells a full range of products and its display is set up more like a dedicated showroom, with banners and other P-O-P materials; Gregg caters to a more upscale clientele and thus features KitchenAid’s high-end Pro Line. Gerhards also displays high-end products, but in a showroom setting more similar to Brands Mart’s. “We took a look at the environment of the stores and tailored the displays to that environment” right down to matching the appliance colors with those in the store, says Fritz.

Although it’s too early to gauge the long-term impact of the promotion (each account has signed two- to three-year commitments), preliminary results “have been very successful, and we’re looking to go more full-scale with several other dealers next year,” Fritz says.

Water Cooler Dominance

One of the particular challenges in developing account-specific capabilities is deciding who takes overall responsibility for them, the marketing department or the sales force. The jury is still out.

“More and more, it’s becoming a sales function – which is better,” says one agency executive. “They know the accounts better, they have the contacts, and they’re not as caught up in a lot of process.”

But Chris Hoyt, president of Stamford-based co-marketing consultancy Hoyt & Co., maintains that the ultimate responsibility for managing key accounts “falls to the marketing folks, and that’s what’s wrong with the whole thing. Most marketing folks only have cocktail contact with the salesmen. They never talk to the buyers, and they never get out in the field. There are exceptions, of course, but most don’t have any idea what promotions are implementable in the field.”

In cases such as Pillsbury, where a large manufacturer is focusing on top accounts, the team approach works best. “With level-one accounts – the top drug chains, mass merchandisers, food accounts, and club stores – you’ve got to have special teams and an infrastructure to service those accounts,” says Hoyt. The increased investment in costs and personnel in setting up those teams, he says, is justified by the amount of sales generated through those retailers.

Local Help

Of course, there’s also the matter of motivating all those local sales forces. That was a key factor in an account-specific promotion running this month for Dickies, Fort Worth, TX-based Williamson-Dickie Manufacturing’s apparel brand.

It seems that teens (especially those trendsetters on the West Coast) have adopted Dickies’ work apparel as hip attire. “We’ve found ourselves featured in the fashion spotlight,” says Jon Ragsdale, vp-marketing services. Looking to seize that opportunity with back-to-school promotions, Ragsdale identified several key retail accounts, including Tilly’s, Hot Topic, and J.C. Penney on the West Coast, and Millers Outpost, a 350-store chain stretching from the West to the Midwest.

Millers had been working with The Creative Couch, a Los Angeles boutique specializing in teen marketing, so when Ragsdale came calling, the chain introduced the two. The resulting promotion, which runs through August 21, offers a free CD sampler of rock music to shoppers who spend at least $40 on Dickies jeans, jackets, packs, or other products. As a value-add, the CD’s jewel case contains an eight-page foldout with coupons from other partners such as Slim Jim and Midway Games. And there’s a sweepstakes, entered either in stores or via the Internet, awarding a grand prize of a DVD home entertainment system.

The multi-faceted approach – the gift-with-purchase, sweepstakes, and bounce-back coupon components – is the primary difference between the program Dickies is running with Millers and what it’s doing with other accounts for back-to-school. “Millers’ unique abilities as a retailer made its particular consumer base potentially responsive to this type of promotion,” Ragsdale says.

To customize the program at the other key accounts, Dickies worked with a local radio station to produce the CD for Tilly’s, and provided J.C. Penney stores in the Los Angeles market with unique P-O-P leveraging the brand’s endorsement agreement with Major League Baseballl slugger Sammy Sosa.

“One of the main concerns of manufacturers with these types of retailers is that 99.9 percent of the people working at these stores are teens,” says Melisa Wolfson, president of The Creative Couch. “So when you have to rely on them, there’s really no guarantee that your P-O-P will be up.” To address that concern, Wolfson works with manufacturers to assemble a “promo kit, which gives all the specifics of the promotion – displays, banners, sweepstakes rules, everything – in a very clean and easy-to-understand manner,” she says.

The Mouse That Roared

Columbia TriStar Pictures’ home video division has been customizing programs for as many as 30 different retailers for several years through a special retail marketing group. But the April release of Stuart Little was a particularly ambitious effort, says Janet Wheeler, executive director of retail marketing.

“This was our biggest retail-specific promotion by far, and it really ran the gamut,” she says, then ticks off some of the executions: Toys “R” Us ran a sweepstakes with a sailboat as grand prize, Target did an on-pack offer with key chains and zipper-pull toys, Kmart gave away plush toys, Best Buy dangled phonecards, and Circuit City handed out mouse pads with purchase.

The extra time, personnel, and money typically required in running account-specific promotions can be considerable. “It puts more on our plate, especially from the tactical side,” admits Ragsdale. “We recognize that, but if you’re going to do this kind of marketing, you have to be willing to make the investment.”

Marketers unwilling to up the ante may need to rethink their strategy. “You can no longer reach the consumer with the kinds of budgets that you had in the past,” says Jon Kramer, president of Stamford-based agency J.Brown/LMC Group. “It takes much bigger budgets. At the same time, the retailers are demanding much more attention and funding.”

Make that specific attention and funding.