What Do Leading CPG’s Do to Improve Performance?
You know those brands that retail category managers seem to be really hooked up with? They are the category leaders, they bolster access to all the right data, and constantly launch cool, new products every year.
Yah, yah, yah…so annoying aren’t they? Good news is you can be just like them. I know, you’re thinking…bit over zealous, right?
Not at all… the truth is any manufacturer, regardless of size, can follow these tips to improve your overall CPG performance now. In this blog, you will learn how to better understand your customers’ perspective on category management and how to best position your brand for volume and brand equity growth.
Since 1991, STAR Brokerage Inc. has helped hundreds of CPG, food, and beverage manufacturers and suppliers develop their brands in the Texas market. This gives me the insight, as I take note of best practices, habits, and go-to-market strategy characteristics of leading companies. These companies just do it right, consistently producing profitable outcomes year after year.
Here’s what I have found leading consumer product good manufacturers have in common.
1) Leading CPG’s treat category managers like business owners versus buyers.
These manufacturers crank up the volume! How? They treat category managers (a.k.a, buyers) like business owners…what exactly does this mean?
Many interdependent roles support category management, but the category manager is ultimately responsible for the success and/or failure of the category. The key is to add real value to the relationship. To do this, start thinking through the eyes of the customer by offering destructive insights and valuable information that can help refine retailer strategies.
Share category and sub-category trends, discuss market competition, provide alternative channel trade insights, and offer unbiased product mix recommendations. Identify mutually beneficial opportunities for cross-merchandising and cross-promotional activities. By showing commitment to their success, you can become their credible source. This will pay dividends.
2) Leading CPGs really understand their target consumer.
Leading CPGs align with customers that really match their brand profile and whose consumers represent their #1 target demographic. These target consumers represent the most market penetration potential. To do this, define customer positioning organized by their various consumer groups, such as inner-city and working family, etc. Gain access to trade market demographic data and begin to intimately understand the diverse household lifestyles, age, size, buying habits, income level, etc.
With this info, integrate sales scanning data to find the optimal product mix and promotional strategies that show spikes in volume. To maximize volume, research how to directly market to these consumers through the top rated market advertising vehicles and make small investment to test for conversion.In my experience, manufacturer interest in approaching a retail customer is premature due to limited insight into whether the needs and wants of the consumer truly align. Invest in building business with your best match and tailor proposals, labeling, pricing, etc. around the needs of your target demographic.
3) Leading CPGs partner with strategic alliances to leverage power and influence.
Who are these strategic alliances? Sales, marketing, and retail go-to-market agency outsourcing via food broker representation. The catch is to create an alliance that offers scale in operation without the negative tradeoffs outsourcing is typically connected to. According to many leading CPGs we work with, a regional broker provides the most results in the least amount of time. Why?
Regional brokers take action quicker due to less layers of management, giving your business full attention and care, preventing you from falling within the cracks. Regional brokers offer more market driven expertise and local knowledge, so you can make better decisions and stronger relationships. They create demand through their relationships and on-going dialogue with category managers. National agencies may only visit the customer once a year, which is truly not enough service for brand development. Leading retailers across the country are scaling-down national purchasing strategies to a more market specific customization. Manufacturers should follow this trend.
4) Leading CPGs care about customer purchasing strategies just as much as executing flawless merchandising strategies.
Winning the battle at the shelf, in my opinion, separates the competition within a trade market area. It’s one thing to get your product approved, but it’s totally another to get it on the shelf quick and maintain position. Part-time retail service professionals offer less than desired execution to your well-planned merchandising strategy due to limited knowledge base and minimal touch points. A full-service, full-time retail team is fully integrated in executing promotional and merchandising strategies.
Ensure you work with brokers that offer full-time services that offer the competitive pricing reports, the digital images, the local level store information. Effective retail merchandisers identify cross-merchandising opportunities to build incremental sales and brand awareness. Since most buying decisions are made at the shelf, this is extremely important.
5) Leading CPGs truly understand how to communicate and work as a team.
It takes a true team effort to successful manage the entire go-to-market process. The diverse roles involved in the process: sales, marketing, brand management, trade promotion, and customer service must work together. Open dialogue and common well-articulated goals and objectives help support growth initiatives. Conflicting aspirations by someone on the team can be detrimental to your success.
Focus on team knowledge building, brainstorming sessions, and cross-training to stay ahead of the competition. If you are not improving, you are getting worse. Information technology and automation of processes can improve team productivity, but keep in mind that this business is people driven at the regional and local level. Don’t let technology become the barrier to your success!
What other tips do you know leading CPGs do to improve CPG performance now?