In August, we repor-ted about the “convergence phenomenon” as it pertains to retailing. In short, most marketing tools available to manufacturers are migrating to retail, and retailers are seizing control of manufacturers’ consumer marketing plans, just as they have with trade marketing dollars.
Many people e-mailed me, and one person summed up the majority’s sentiment: “I see the trends, too, but I’m in the middle of the river and must work to survive,” she said. “What is the ideal project list for a newly assigned customer marketing manager?”
Here are some thoughts.
The easiest thing would be to go with the flow and do what the managers before you have done. Why not keep throwing more funds into in-ad coupons like the rest of the industry, despite declining redemption rates and escalating mis-redemption? Or, why not keep using trade dollars to buy down the price of your product into ever-deeper discounts, overlaid with non-equity-building, non-consumer-targeted promotion efforts?
Hmm. Maybe the definition of insanity really is doing what’s always been done but expecting different results.
As the new customer marketing manager on the block, consider it an opportunity to create constructive change. While rocking the boat might be intimidating, if your actions are intelligent and result in better sales and profits, you’ll come out a lot further ahead in the end.
QUESTION: First, you need to develop insights into your retailer’s shoppers. What is the quality of the consumer base? What are the consumer perceptions of the category and brands? What are the likes and dislikes in shopping the section? Study category penetration by the shopper base, shopping basket breakdowns, source of volume, substitutes, and complementary purchases. This investment in intelligence should cost between $10,000 and $50,000 and should serve as the basis for all marketing conversations with the account.
Answer this question quantitatively: What’s the opportunity at this retailer? If your brand has a 50% household penetration and only 10% of shoppers at the retailer buy your product, there’s a story to be told and work to be done.
Then, fill in the blanks qualitatively. Spend time in the aisle and in the parking lot. Ask consumers, cashiers, and store managers what they think about the store, your category, your competitor, your brand. This takes guts, but once you get started it comes pretty easily.
CATALOG the menu of available retailer tools, cost, availability of rotos, handouts, direct, in-store radio, signage, and other forms of media. Before choosing the tools, determine what each will cost and exactly what they will deliver. Displays are always more effective than ads – or are they? You should understand all of the retailers’ marketing plans and hot buttons.
COLLABORATE: Build a share group, formally or informally, with other like-minded, non-competing manufacturers. This collaboration can be used to gather intelligence and form promotional partnerships. If you are a baby food company, a logical partner would be a diaper company dealing with similar promotion and channel issues. Marketing managers at other manufacturers are asking the same questions you are, and may have some answers.
CONSTRUCT the “ideal” account-based marketing plan 12 to 18 months prior to implementation. Determine its architecture, necessary tactics, when to promote, which SKUs to feature, cost, and the ultimate return on investment. There’s no doubt this exercise will require many iterations, so allow a generous amount of time. Getting a buyer to buy into the plan will also be tricky and take some groundwork, since a plan is pretty much an alien concept to most buyers. Even if this turns out to be only an intellectual exercise with little hope of 100% implementation, it’s worth having the Holy Grail to refer to and enhance over time.
CREATE: Prototype, prototype, prototype. Build a mock-up department designed to increase penetration, or to increase cross-purchases, or to be more of a shopping destination. Ninety percent of the time, your buyers won’t bite, but they will most likely provide valuable feedback that will come in handy next time. If you aren’t pitching ideas, the buyer can’t buy ’em.
COVER your assets. Position your company for upcoming threats. Assess your position on private label, single-source supply, and consignment. Will you make private label? Do you know how to compete against upscale private-label brands? Do the strategic thinking you’ve been educated and trained to do. Get out ahead of your retailer’s agenda, and have a point of view prepared for the day when you’re asked the hard question.
Yes, it’s a lot of work. And about the time you figure it all out, you’ll be called back to headquarters on some cushy brand management assignment. Good luck.
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