Mutual Benefits
What are some of the ways in which consumer goods firms should differentiate themselves in their retail partner's eyes?
Domski -- Consolidation and globalization across the retail market space have reduced the number of customers that are available to engage, so manufacturers now need better customer management processes than ever before to succeed. Not only do manufacturers need to know which consumers are looking to purchase what product, but they must also understand each customer's strategy for attracting consumers to specific outlets.
CG firms need to be flexible and adaptive, while managing their business to the highest level of customer support possible. A current trend is for manufacturers to manage each customer as a unique partner and apply resource support to customers in varying degrees.
Every day, manufacturers must decide how to sell to customers that are large in terms of volume or profit, while also selling to customers that present a smaller opportunity. Some customers require more personal interaction than others.
To succeed in aligning and executing on a joint CP\Retailers strategy, customer-centric data needs to be captured and visible to each stakeholder responsible for the customer interaction process within a manufacturer's enterprise. Those responsibilities can include analyzing, planning, selling, executing, validating or evaluating any of the product processes used to enlist retail customers in managing and promoting a manufacturer's products to consumers.
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How do CG firms become more customer-centric?
Domski -- First, you have to take a look at all the touch points that your organization has with the customer. This includes the areas of trade promotion management, category management, CPFR, UCCnet, RFID, VMI, call center, mobile and in-store observations. All of these areas play a critical role in how CG firms are interacting with their customers. The key for consumer goods firms it to make sure that these points of contact are in alignment with one another.
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Traditionally, CG firms have not taken this holistic view. Is that why CRM implementations have not been as successful in the past as they could have been?
Domski -- In its truest sense, CRM is the net effect on your customer, the conclusions they draw, the perceptions they form and the good will that develops as a consequence of the character, quality and consistency of all your dealings with that customer. To answer why implementations have not been as successful in the past, many companies chose to implement point solutions that were not integrated with the rest of their business. As a result, they accumulated a lot of sales-related data, but were unable to link it back to the supply chain, financials, business intelligence and other areas of the company that connect with one another to serve the customer efficiently. Today, more and more CG companies are recognizing that CRM is really a series of end-to-end business processes that deliver value to the customer, and that processes such as trade promotion management reach into deep parts of the company that a point "CRM" solution cannot penetrate.
CG companies are also recognizing the importance of user adoption, change management and the amount of process redesign involved with CRM implementations. In the successful implementations that I have been involved with, it has been the successful marriage between the process improvement through software enablement and the successful change management driven by executive endorsement and involvement that has made the difference.
I read a story where in the early 70s a company replaced their manual MRP process with a computerized MRP process, which led to them calculating all their replenishments via computer. Several months after the go live, the company said they were not getting any value out of the change. They found they still had the same inventory turns and levels they had in the past. The question was how often did you calculate your MRP run before the shift to a computerized process? The answer: "Once a month'. When asked how often they calculated inventory now using computer, they again said once a month.
Removing latency between information and steps within the process substantially enhances a company's ability to meet customer expectations. That's where a common infrastructure plays a prominent role, rather then having the ball bounce between multiple systems. Having one smooth pipe of the entire company's information to flow to give people a holistic perspective on the whole enterprise is key to deriving maximum value.
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What are some of the steps CG firms need to take beyond that to get the people on board?
Domski -- Regardless of the application, user adoption is the key to taking advantage of the automated systems put in place. These automated systems many times move the employees' role from managing transactions to allowing them to use their strengths in making better decisions with better data. If an employee's role is still managing transactions, it allows companies to do this easier and more effectively.
An important factor is the usability of a solution and the ability of employees to get access to role-based information for the specific jobs they perform. Having the right portal in place can greatly increase the usability and adoption rates for a technology program. From an implementation perspective it means not skimping on the training budget.
Training includes more than just a feature function dump on their particular role. It should include a perspective of the complete processes and their impact on those processes. This instills a discipline and understanding of why the old workarounds no longer work due to impacts both upstream and downstream of their particular job and their interaction with the system.
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What level of trust do you think exists between CGs and retailers right now?
Domski -- Over the past 10 years, channel control has shifted more and more to the large retailers. With this shift in control and power comes a great responsibility on the retailers to create win-win environments. Trust is bred through mutually derived value. As information is more frequently shared and readily available, costs can be managed down and consumer satisfaction can be increased. This drives value, and therefore, trust on both sides of the equation.
Over the past few years I believe we have seen the level of trust between retailer and consumer products companies grow. Whether it is streamlining transactions through EDI, incorporating VMI programs, CPFR initiatives, sharing more and more direct consumer -- there are clearly signs of evolving relationships. And in the future, with new technologies like RFID, both CG and Retailers will find more and more value in driving even a more trusted relationship.