Sales & Marketing Summit 2006

From June 12-14, senior-level CG executives convened in New York City at the Consumer Goods Sales & Marketing Summit 2006. Monday night opened with a welcome reception where attendees were able to reconnect with associates and make new contacts in a relaxed environment. The next day and a half was spent networking, relationship building and gaining insights from some of the world’s leading CG executives and analysts. Highlights include:OPENING KEYNOTE

Over 300 people attended the opening keynote given by Larry Selden co-author of the 2003 book, “Angel Customers and Demon Customers,” consultant to many of the world’s largest companies, professor at Columbia University and visiting scholar to such institutions as The Wharton School. In his presentation, “Profitable Customers are the Key to Profitable Brands,” Selden asked the audience to “put yourselves in the CEO’s shoes.” He explained that while most companies have some very unprofitable customers, they rarely know who they are and what to do about them. He went on to discuss his trademarked theory of “Customer Centricity.” The success of this strategy depends on segmenting customers, understanding who they are and then “delivering value propositions for each segment.” By analyzing profits through “deciles,” companies can understand where their money is made and lost. Then they must determine who the customer is in each decile. Selden cited Best Buy as a company who has achievements through this strategy. He concluded, “Customer Centricity is hard work, but at the end of the day there is enormous value for shareholders and your professional growth.”

CRM: Estee Lauder

There was standing room only for Estee Lauder’s senior vice president – CRM & new initiatives Angela Kapp’s presentation, “Leveraging Data,” as she took the audience down the “yellow brick road.” She explained that CRM is a “way of thinking” for the company, not just a tool for sales. One of her strong points of advice was to “keep it simple.” The essence of its CRM for Estee Lauder is to keep more customers and to get them to spend more. She did indicate, however, that CRM objectives and strategies are different for each brand. Kapp said that “leveraging data should be an umbrella to everything we do.” She cited one specific example in which data enabled them to take a very successful promotion and change it without upsetting the high value customer.

TPM: Hormel Foods

While space my have been the “final frontier” on Star Trek, the journey for Hormel Foods Corporation and its “Project Enterprise” was a TPM technology implementation. Chris Boever, vice president category sales and Mark Vaupel, director of IT services spoke about the ins and outs of the largest project the company has engaged in their history. To start, they identified over 100 business processes that were in use, determined what a non-value added step was and removed them. Streamlining the processes left and making them more efficient followed. Results include both “hard and soft savings” with higher effectiveness and efficiency in the process and a boost in morale. One of the foremost keys for success here, which was echoed by others throughout the day, was “executive sponsorship.”

SECOND DAY KEYNOTE

The second day’s keynote was delivered by Mark Heckman, vice president/Retail Insights for Sorenson Associates. “The Shopper Footprint,” showcased “PathTracker,” which demonstrates the actual way consumers behave in a store. This is opposed to they way most retailers set-up. Heckman said the old shopper model is all about the store and the new shopper model is all about the shopper. Some key facts: Shoppers want to conveniently find what they need; 80 percent of shopper activity is done in 20 percent of the store; the majority of consumers shop in a counterclockwise direction; and “short trippers” are important — they spend faster and there are more of them. Understanding these and other patterns can help in developing successful category management and promotional plans.

WALL STREET PANEL

In a lively panel discussion titled, “Wall Street Perspective,” analysts from Citigroup, UBS Warburg and BB&T Capital Markets commented on which CG companies are doing the best job of building profitable brands and partnerships. Drug stores and organics were suggested areas of growth in the “supermarket” sector, while natural foods, soy products and premium alcohol companies were cited as CGs to watch.

WAL-MART and RETAIL LINK

Dan Phillips, Wal-Mart’s vice president information systems, discussed how suppliers can leverage the data and capabilities in Retail Link. “One version of the truth” is the primary objective in using Retail Link. He said you should be able to ask any question at any time and get an answer. He covered issues surrounding EDLP, supply chain and RFID. He concluded with what’s next with Retail Link, covering decision support, exception reporting and alerting. Wal-Mart’s goal is to enhance the user experience in the next one to two years through process mapping, tools arranged by business process flow, standardized workflows and integrated look and feel. He also encouraged any user of Retail Link to join a user group.
In addition, attendees heard from companies such as, Campbell Soup Company, Coty U.S., Heineken USA and Welch’s on the sales and marketing study panel, RJ Reynolds Tobacco, Georgia Pacific, ConAgra, Masterfoods (soon to be Mars), Schering-Plough, Dannon, SYLVANIA, Organic Valley, Tasty Baking Company and Pinnacle Foods Corp. on topics such as marketing ROI, trade promotion optimization, trade planning, account management and selling and strategies for SMB firms.