Deep understanding of retailer partners and shoppers can trump size in building relationships
Structural Considerations for Collaboration
How strategic is this partnership? What level of investment is warranted?
Is my partner ready to handle a higher level of collaboration? Can we help them be ready?
Which functional areas need to be dedicated? Sales? Marketing? Insights? Operations? Supply chain?
Which relationships would benefit from more interactive, real-time collaboration? Is the relationship valuable enough to merit the cost?
What level of co-location is needed for each tier of partner? Is one liaison enough, or do we need an onsite team?
What functional area(s) should be onsite? Sales? Marketing? Insights? Operations?
Where does shopper marketing best align with my organization’s strategy? With my current account relationships?
What formal communication and processes are needed to ensure alignment?
How will shopper marketing programs be funded and coordinated with brand, category and trade?
What existing internal processes inhibit committed collaboration with our partners?
Is our planning process realistic given the demands of our partners?
How can we ensure integration between consumer and shopper insights to deliver
holistic marketing platforms?
This means that not all organizations, and indeed not all partnerships, require the same level of structure around their collaborative efforts. Companies may be able to achieve similar results through establishing a single customer contact backed-up by virtual cross- functional teams – as long as they do the extra legwork of embedding a culture of com- mitted collaboration, establishing strong frameworks for communication, and aligning in- centives across functional areas. Developing formal frameworks and maintaining discipline around these “soft” factors can help smaller players level the playing field against competi- tors with deeper pockets.
A Small Manufacturer Achieves Big Results
Shopper marketing is not just for the biggest players. Smaller manufacturers may have fewer resources but they can gain just as much from focused partnerships. According to many retailers, niche manu- facturers who are second or third in their categories often make better collaboration partners than the category leaders, as smaller manufacturers are less interested in defending the status quo and more willing to take risks on truly innovative marketing efforts.
One beauty care manufacturer that we talked to has leveraged a long-standing, trusting relationship with a key retail customer to build an effective collaborative shopper marketing program. They make up for the lack of deep pockets with a customer intimacy that is difficult for larger competitors to achieve.
When the manufacturer introduced its new line of shampoo and hair care products into the market, it drew upon this trust equity to integrate the new products into the retailer’s network of in-store beauty personnel that help customers decide which beauty products are right for them. It tailored the program and messaging to cater to the specific shopper characteristics of the retailer’s core customer segments. Utilizing product training and Sales Promotion Incentive Funds (SPIFs), the manufacturer provided sales staff with the ability and incentives to attract target shoppers. The two partners also worked together to improve compliance, ensuring that point-of-sale displays are set up and deployed at the right time and in the right location.
This cooperation resulted in a significant gain in hair care sales for the manufacturer as well as overall category growth and a differentiated shopper experience for the retailer.
Source: 2008 GMA/Deloitte Shopper Marketing Study Interview
A structured collaboration process builds trust, reliability and efficiency
The Right Process
“ rust is a self-reinforcing cycle.” – Manufacturer
Building partnerships that work requires repeatable success in generating customized insights, collaboratively developing programs, and consistently executing in-store. Without a clearly defined collaboration process, good insights and planning can result in one-off programs that may provide some short term returns, but fail to yield the long-term potential benefits of shopper marketing. Establishing a collaboration process builds trust, promotes reliable results, and directs resources at the best opportunities.
For both manufacturers and retailers, having a clearly defined collaborative process dem- onstrates a commitment to building relationships. The right process provides a framework for committed collaboration, outlining areas of responsibility, roles, and expectations for data sharing. This level of transparent, repeatable process promotes trust as partners know what to expect – and can be a source of competitive advantage in the battle for the best relationships.
Strategic Shopper Marketing Collaboration Process
Align with Strategy
Build Communication and Trust
Joint or Interactive Activities
Develop a deep understanding of your core partner’s business
Work with partner to find where your interests overlap
Determine Opportunity Areas
Evaluate the overall performance of the relationship
Depending upon the sophistication level of both partners, each step can become more collaborative
Source: Deloitte Consulting LLP
Likewise, the right process can create order from chaos. Merging differing shopper segmentation models, resources, corporate cultures, and processes is hard work. Ad hoc programs risk misaligned objectives, lack of execution scale, failed hand-offs, and lack of buy-in. The right process minimizes these risks by centering program development around both organizations’ objectives and systematizing communications expectations and hand- offs. As the collaborative partnership delivers reliable results – for both parties – the value of a trusting collaborative relationship is reinforced.
Ultimately, an established process ensures that resources are directed most efficiently. With roles and processes defined, organizations do not need to pull resources and reinvent the wheel for every ad hoc program. Likewise, the best processes provide a feedback loop to continuously assess their programs’ effectiveness and adjust course as needed. To reach this stage, some advanced companies are hiring third-parties to survey and analyze their collaborative performance and identify areas of improvement. With those areas identified, they jointly develop an action plan with their partners to improve.
Once an organization has been able to demonstrate a credible commitment to collaboration and the ability to deliver the right insights, the right systems, and the right processes for the right partner, it will be poised for a successful win/win relationship.