Speech Summaries

Bruce D. Temkin Vice President, Practice Director of Financial Services Forrester Research, Inc.

CRM For CPG?

Bruce D. Temkin, Principal Analyst, Forrester Research, emphasized that CPG manufacturers' brands are at risk, and to win in a Wal-Mart world, CPG manufacturers must extend their influence to win consumer loyalty.

According to a survey of 4,700 grocery shoppers, brand matters: It is cited as an important purchase criterion by all grocery shoppers -- even heavy Wal-Mart shoppers. Bruce segmented shoppers based on their loyalty to brand versus their loyalty to a retailer, and showed that about one-third of shoppers are highly loyal to brand and not to a retail store, while only 16% are not significantly tied to brand and are highly loyal to retailers like Wal-Mart. He also created the "brand pull index" to help specific brands understand their connection to consumers.

He pointed out that we are currently in a "Wal-Mart" era, which is characterized by intense competition, data-driven retailing, and collaboration. In this environment, CPG manufacturers should take advantage of consumers' loyalty to brand by mastering CRM to forge new consumer and trade relationships.

Specifically, CPG manufacturers should renovate account management and focus on consumer cohorts -- not products -- across demographics, brands, and channels. They should standardize processes for trade promotion, peg all account activities to profit, and specifically target store-level promotions.

Questions And Answers

Q: Besides Frito-Lay, which CPG manufacturers do a good job with CRM?
A: Purina and P&G do a wonderful job, which is why we asked both to speak at our Summit.

Q: What are the top two best practices that CPG manufacturers should follow when implementing CRM applications?
A: Implementing CRM applications is generic: First, decide what you want to use it for and have a crystal clear vision of your segmentation. If you don't you are likely to fail.

Q: Should manufacturers focus CRM initiatives with retailers or consumers first?
A: Customer relationships are so broken today that there are very quick wins you can take advantage of -- such as clarifying what is and is not an allowable deduction. Between 2% and 20% of trade promotion investments are wasted. Manufacturers should address the trade issues first and then focus on the consumer relationship.