Molson Coors Canada Makes Complexity Look Simple
Molson Coors Brewing Company is a master at executing change while remaining profitable. In the last decade, the company has completed two mergers and launched a joint venture with SABMiller in the United States to create a $5 billion beer empire that operates mainly in Canada, the United States and the UK. Today, the company touts 14,000 employees, 18 breweries and distributes products in more than 30 countries.Now, the brewer is undergoing another massive transformation. Molson Coors Canada is the first business unit to design, develop and implement a multi-year customer relationship management (CRM) transformational program called "Caddie".
The first phase, sales force automation (SFA), launched at the end of 2007 and is now leveraged by the majority of Molson Coors Canada's sales representatives to improve go-to-market execution.
Trade promotion management (TPM) is starting to be utilized by key account managers to maximize planning and investments.
The next phase will be to complete the roll out of TPM to key account managers and expand this component to the rest of the sales organization, while refining and improving the technical solution.
Here, the executives charged with creating and maintaining Caddie reveal how they reengineered and standardized 70 percent of the company's sales processes in an extremely complex and highly-regulated market.
A Complex Market
To understand why a CRM overhaul was necessary -- and why it has taken three and a half years so far -- you must first understand the complexity of the Canadian beer market when compared to the three-tier distribution system used in the United States.
Molson Coors Canada is the second largest brewer by volume in Canada and North America's oldest beer company with a Canadian market share in the 40 percents.
In Canada, provincial governments regulate the beer industry, particularly the pricing, container management, sale, distribution and advertisement of beer. The distribution and sale of products containing alcohol involves a wide range of control through provincial liquor boards.
For example, in Quebec, it is illegal to distribute beer through customer warehouses. Therefore, Molson Coors must deliver direct to 22,000 retail and on-premise customers on a weekly basis.
"It is 100 percent direct store delivery (DSD)," says Sylvie Leduc, vice president, Business Development and CRM, Molson Coors Canada. "We truly manage a one-on-one relationship with every corner, grocery, convenience and on-premise establishment you can think of."
In Ontario, however, consumers can only purchase beer from any of the 552 beer store outlets or 200 liquor stores outlets across Ontario or at any licensed establishment for on-premise consumption.
The four western provinces of Canada present variations of an entirely different model. Brewer Distributors Ltd. (BDL), a private joint venture owned by the Canadian brewers, manages the wholesale distribution of beer within these provinces. Their facilities serve retail outlets licensed by local liquor boards.
In addition to these regulations and differences, Molson Coors Canada didn't have a standardized sales process across its regional markets. From 1994 to 2007 it leveraged an SFA system in Quebec and in the western provinces to a lesser extent, but Ontario lacked a system all together. Meanwhile, the cost of trade spend investments tripled over the last 20 years, and Molson Coors Canada lacked the processes and tools needed to fully visualize, optimize and control these investments.
It was time for a big change.
Design, Develop and Deploy
The vision for Caddie was developed a year and a half before the business case was written. Using lessons learned from their experiences at large consumer packaged goods (CPG) companies, like Procter & Gamble, Leduc and her well-resourced team worked to set the massive scope of the project.
"The rule we always used was to retain 70 percent of CPG processes but keep the remaining 30 percent absolutely relevant to the beer industry," explains Leduc.
The game plan included the design, development and deployment of a new SFA and order entry solution, a new customer segmentation approach and a full suite of TPM modules.
The first phase started in Canada, driven by the market's complexity and the rapid need to address trade promotion escalation.
A key factor in Caddie's success thus far is that many process changes were implemented before technology. In 2007, Phase 1 of the project was rolled out to standardize call planning, execution and order entry/suggested orders across Canada. This would empower employees to establish the right priorities, plan according to insights, measure results in a consistent way across regions and spend less time on administrative tasks.
The implementation of a customer segmentation concept soon followed to support sales activities. This is the process of identifying customers with a unique combination of 32 characteristics and five markers and then selecting and executing activities to a specific customer subset to maximize investments. Sales representatives are responsible for maintaining the customer segmentation profiles, while trade marketing, field marketing and national/key account managers all use the concept.
In Phase 2 of the project, TPM was transitioned from a sales responsibility to a process that facilitates teamwork between sales, trade marketing, finance, customer service and logistics functions around a set of common data and measurements that can be consolidated across different customers, categories and geographies.
On the technology front, CAS CPWerx 6.0 was brought in to replace the old SFA system. By integrating closed-loop business processes throughout the eight modules of its solution, CPWerx supports the full spectrum of sales across the enterprise. Twenty-two interfaces have been developed and integrated with Molson Coors Canada's SAP backbone using IBM as an integrator.
What's unique about Caddie is that SFA and TPM are fully integrated, which is a first in this industry.
"We are bringing TPM to the sales representative level," says Leduc. "When fully deployed, our sales representatives will be able to negotiate agreements, optimize promotions, manage their funds and payments, and integrate with call planning and execution under SFA, all 'off-line'."
Encouraging Adoption
In 2006, a Change Management Team was implemented by Justine Gagnon, national director, Change Management & Training, for Molson Coors Canada.
"We consider change management as an opportunity to speed up employee adoption to change and reach a higher return on our investment, instead of a series of activities that are necessary only when issues arise," she says.
A full 20 percent of Caddie's budget was allocated to resources for change management and training. All team members are Molson Coors employees with a minimum of six years experience in a variety of functions (Sales, Trade Marketing, Market Data, etc.).
"Since Caddie's launch was not just about a technology change but a more profound transformation of our culture, we knew our targeted users, the sales representatives and key account managers, would be highly impacted. We had to manage the transition of our employees really well," says Gagnon.
The change management strategy is based on three main pillars: people, communication and business gaps. Molson Coors Canada involved future users as much as possible, sharing information about the new processes, vision and expectations in a transparent way. After communicating the transformation strategy in May 2006, a national road show presentation was kicked off for all future users 18 months prior to the go live of Phase 1.
"The team would then meet every four to six months with sales users to show demos and videos. We used a lot of creativity in every presentation to have fun and ensure our messages were well received," explains Gagnon. A Caddie beer was even developed for the occasion.
To measure employee readiness for Caddie, Molson Coors Canada used a personalized questionnaire that allowed the team to determine at which stages employees had concerns and determine the actions needed to ease those concerns. For example, in the second stage of any change project, employees are typically more concerned about the impact of change on them, so Gagnon and her team shared what they thought would be the impact of Caddie on their workloads, administrative tasks and relationships with customers.
"Managing people's concerns proactively and involving as many employees and managers in the transformation early helped us achieve the level of usage we were aiming for," reports Gagnon. "Six months following Phase 1 deployment, 96 percent of users were using the system." Today, 100 percent of online users are live.
"Like any change initiative, the launch of TPM to key account managers, and at some point to the sales force, will take time," says Gagnon. "Even with change management done proactively, it will take tremendous leadership support and organizational commitment before we reach our desired adoption level and deliver anticipated benefits."
While Molson Coors Canada was not able to share quantitative benefits of the program, qualitative benefits are expected to be significant and include:
- Financial integrity on agreement and payment tracking as it relates to Sarbanes Oxley
- Clearer accountability and responsibilities
- More accurate information and improved visibility
- Improved communication
- Ability to deliver a better value proposition
- More relevant, up-to-date business, industry and category expertise
The Future of Caddie
Molson Coors Canada will continue developing its CRM initiative until full adoption is realized by all sales users before it moves forward with implementations in other markets. More change is on the horizon.
Since March 2010, Serge Fortier assumed the leadership role of Caddie as vice president, CRM. Serge is charged to roll out TPM to 300 "off-line" users who don't connect to the server throughout the day. A pilot is planned later this year.
Meanwhile, Fadi Dagher, vice president, Commercial Operations, joined the team in May 2009 to help lead Caddie adoption.
"Caddie is a great opportunity to shape a different way of doing business with our customers and is a wonderful enabler toward our vision of building extraordinary brands, delighting beer drinkers through innovation, delivering this through brilliant execution and keeping an eye on costs," he says.
According to Leduc, the journey to date was not easy, but well worth the results. "Down the road, Caddie will enhance Molson Coors' capability to improve planning and execution, maximize trade investments and improve our employees' knowledge in front of their customers. This is what counts in the end."
What's in a Name?
Why did Molson Coors Canada name its massive CRM system "Caddie"? "In golf, a caddie is a precision expert who knows the course by heart and has all the information needed to stay ahead of the game," explains Sylvie Leduc, who led the project. At Molson Coors Canada, the meaning translated perfectly as Caddie is a fact-based sales expert that knows by heart key information about each customer. Caddie constantly records and analyzes relevant data so that sales employees can maximize sales opportunities. "Caddie gives them the facts. Sales representatives and key account managers are then well positioned to call the shots and achieve their objectives," says Leduc.
Keys to Success
Projects like Caddie take passion, drive and leadership to achieve desired goals. The Molson Coors Canada team had all the essential ingredients in place to succeed:
- Led full time by a Senior Business Vice President with vision and commitment
- Business case with tangible benefits for the sales force
- Good CRM strategy and roadmap in place before the project start
- A well-resourced project team that worked on site for three years
- Implementation of new processes before system arrival
- Involvement of middle management 18 months prior to each go-live
- Very strong training program with 100 percent participation