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Should CPGs increase focus on consumer data?

January 13th, 2015 | Posted by Evan Newkirk in Manufacturing

Historically, consumer goods companies have been limited in the ways they can interact with their end consumers and collect data about them.  Retail partners, with their direct contact with the end consumer, have owned the lion’s share of the data, leaving CPGs with access only to data that is shared or can be purchased.  However, in recent years, the evolution of additional channels has allowed CPGs to expand beyond traditional data sources and begin to create their own customer-focused databases.

Both Kimberly-Clark (by building out a granular customer database with individually trackable digital coupons) and Kellogg (by leveraging its Kellogg Family Rewards loyalty program to track over 2.5 billion packages across the portfolio through codes submitted online) are leading examples of how the online channel can be used to build a stronger connection with end consumers.  Additionally, some consumer goods companies have adopted a service style approach to augment their internal data warehouses.

The collection of customer data is only the first step, however; the key for executives is to use enhanced customer relationships and available data to drive growth in key business metrics.

Analyzing customer data provides the opportunity for executives to assess each business decision prior to broader rollout, but organizations must ensure that they are correctly answering the right questions, such as:

  • Are my direct-to-consumer marketing efforts actually driving incremental sales? How does outreach through online channels affect in-store sales of our products?
  • What channels provide the most effective means for reaching out to consumers? How does the impact vary based on different consumer characteristics (e.g., purchasing history, demographics, etc.)?
  • Which products are most likely to benefit from promotions or advertising? How does this vary by channel?

By testing each new business idea with a small group of customers or retail partner locations first, CPG executives can take advantage of their expanding access to data to understand which initiatives work best, and how to tailor and target each one to maximize ROI.

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