The 'silent revolution' in CPG

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There is a silent revolution going on in the CPG market, with marketers who once relied on mass media turning to one-on-one consumer interactions — not national advertising spends — to build loyalty and revenue.

This shift is driven by three dynamics. First, retail options for consumers are higher than ever — according to US Census and The Nielsen Company, new outlets are up 208% since 1980, and grocers now carry more than 30,000 items. Second, the media is increasingly fragmented with new channels changing how and where marketers reach consumers. And third, the consumer population is changing, with diversity and individualism requiring that marketers be more targeted and relevant.

Implementing a CRM strategy can be broken down into four steps, the first of which is knowing the consumer. An information foundation providing a complete view of consumers is key. This is created from three dimensions of data — demographic, attitudinal and transactional — and greatly improves the predictability of behaviors such as loyalty, expansion and acquisition potential, while precisely targeting and segmenting consumers by household.

Next, targeting the consumer is key. Using analytic process on the data creates consumer segments that can predict who and what consumers look like, explain why consumers buy and how they interact. When applied to household-level data, this segmentation increases identification and acquisition of high-value consumers.

Then, engage the consumer. Combining the information foundation, segmentation and consumer buying attitudes helps to create relevant messages and determine the best channel to communicate.

Finally, measure success. Implementing measurement techniques using a consumer research panel for online and offline targeting efforts helps identify incremental sales for ROI calculation and campaign improvement through refinements to all targeting, messaging and channel strategies.


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