Beyond transactions Building customer partnerships in consumer goods An Economist Intelligence Unit white paper Sponsored by SAP Beyond transactions Building customer partnerships in consumer goods Preface Beyond transactions: Building customer partnerships in consumer goods is an Economist Intelligence Unit report sponsored by SAP The Economist Intelligence Unit bears sole responsibility for this report The Economist Intelligence Unit’s editorial team conducted the interviews and wrote the report The findings and views expressed in this report not necessarily reflect the views of the sponsor Dan Armstrong was the editor of the report and Sylvia Helm was the author Mike Kenny was responsible for layout and design Our thanks are due to all of the executives who responded to the survey October 2009 © Economist Intelligence Unit Limited 2009 Beyond transactions Building customer partnerships in consumer goods Contents Introduction Key findings Conclusion Appendix 1: Overall survey results Appendix 2: Americas survey results 13 Appendix 3: Asia-Pacific survey results 18 Appendix 4: EMEA survey results 23 © Economist Intelligence Unit Limited 2009 Beyond transactions Building customer partnerships in consumer goods Introduction The global recession and falling demand have hit the consumer goods sector harder than other industries Except in China and a handful of smaller economies, retail sales fell dramatically in 2009 throughout the Americas, Europe and most of Asia According to an Economist Intelligence Unit survey of the sales, marketing and customer service practices of consumer goods companies, respondents cite the global economic downturn as the biggest issue facing their industry The economy is one of several factors—including changing consumer needs, emerging new competitors and evolving requirements among retailers and distributors—that is beyond the control of consumer goods companies Despite these challenges, survey respondents say they have strengthened customer relationships during the past year They also say they are more engaged in developing products and services collaboratively with retailers and distributors Consumer goods manufacturers need to satisfy two tiers of customers in order to succeed The first is the retailer or product distributor; the second is the consumer who ultimately buys the product from the retailer or distributor Manufacturers have to play to both audiences successfully The majority of survey respondents say they are doing better than ever managing the first relationship, ie, with retailers and distributors The second one, with consumers, is more problematic About the survey In September 2009, the Economist Intelligence Unit surveyed 84 executives of consumer goods companies on the challenges of getting customer-facing departments to work together more consistently and effectively Survey respondents spanned the globe, with 31% from the Asia-Pacific region, 33% from the Americas and 36% from EMEA Respondents’ annual revenue ranged from less than US$500m to more than US$10bn The level of seniority of respondents was high: 32% were C-level or board members and another 20% were vice-presidents or heads of business units © Economist Intelligence Unit Limited 2009 Beyond transactions Building customer partnerships in consumer goods Key findings Evaluating retailers and distributors Respondents give themselves high marks for providing high-quality service to retailers and distributors But this self-assessment appears to be based on anecdotal evidence Because manufacturers believe they already enjoy strong long-term relationships with their retailer/distributor customers, measuring the strength or value of the relationships is not a priority In fact, most consumer goods respondents admit that they could not estimate the lifetime value of retailers or distributors, even if they chose to so Since they not have this information, they cannot prioritise investments in service campaigns and customer-specific relationships Measuring the value of customers (% of respondents who agree minus % who disagree) Disagree Agree My company has an accurate way to estimate the lifetime value of retailers or distributors My company prioritises sales and marketing resources based on lifetime value of retailers or distributors -40 -30 -20 -10 10 Source: Economist Intelligence Unit survey, September 2009 Gathering customer feedback The second-tier relationship—with consumers—has always been problematic for manufacturers It is hard for these companies to get information about consumers without going through their retailers and other distributors Most survey respondents say they rely on point-of-sale data or second-hand feedback from store retail sales staff to secure information about their customers, followed by targeted focus groups and direct response feedback © Economist Intelligence Unit Limited 2009 Beyond transactions Building customer partnerships in consumer goods Manufacturers admit that they are not good at using newer tools such as proprietary or third-party websites and online social media, although there have been some successes Consuming branded goods is a universal experience in modern market economies, and social media allows consumers from all walks of life to share that experience Twitter and Facebook provide ways to connect over the purchase and ownership of goods Nike, Ikea, Guess, PlayStation, Adidas, Apple—all are widely mentioned across a variety of social networking, blogging, photo- and video-sharing sites Priorities for improvement By a small margin, the top priority among survey respondents is reducing the cost of sales As manufacturing becomes a commodity business and distribution channels multiply, more resources are required to maintain the power of the brand This pressures margins Moreover, as revenue growth levels off, the temptation increases to supply private-labelled goods for big retailers like Wal-Mart, Target and Costco In the short term, private-label extensions may boost revenues, but they can also erode brand equity, exacerbating the problems caused by creeping commoditisation Areas in need of improvement (% respondents) Reducing the cost of sales Measuring the effectiveness of marketing/promotional campaigns Maximizing repeat purchases and building consumer loyalty Creating effective consumer marketing campaigns 10 20 30 40 50 Source: Economist Intelligence Unit survey, September 2009 © Economist Intelligence Unit Limited 2009 Beyond transactions Building customer partnerships in consumer goods How the three regions differ Respondents from all regions have differing perceptions of the global recession and the trend towards commoditisation Companies in some regions are working more collaboratively with their retailer/ distributor base to develop new products; others are not And the use of newer marketing media tracks differently in different parts of the globe Americas The economic recession has had a disproportionately larger impact on consumer goods companies in the Americas than in Asia-Pacific More respondents also agree than disagree that over the last five years, their products and services are increasingly seen as commodities And the Americas region—particularly North America—is the centre of social media: Consumer goods companies there use online social media for gathering consumer and retailer feedback far more frequently than their peers in Asia-Pacific and EMEA Asia-Pacific Asia-Pacific respondents are the least likely to cite the global recession as their biggest problem in the past year, reflecting the healthier economy of that region In keeping with the “export or die” mantra, Asia-Pacific is focused on creating consumer goods to order for markets in the West Perhaps as a result, the region scores higher than the other two in terms of working with retailers and distributors to develop products collaboratively Respondents cite “commoditisation” as a problem in their industry, however Their use of online social media is much lower than in the Americas EMEA EMEA consumer goods respondents are most likely to say the economic downturn is the major hurdle facing their business, with 80% citing it as the factor with the biggest impact With regard to commoditisation, most respondents (53%) see no increasing trend, perhaps because EMEA-based firms have had to contend with the threat of private-label competition far longer than those in other regions As a result, 53% disagree with the statement “We are more engaged in developing products or services collaboratively with retailers and distributors than we were 12 months ago.” Companies in EMEA, like those in Asia-Pacific, use the newer online social media less frequently than older feedback channels © Economist Intelligence Unit Limited 2009 Beyond transactions Building customer partnerships in consumer goods Conclusion Consumer goods manufacturers are faced with the need to retain market share in a recession while fending off global competitors Commoditisation makes their goods indistinguishable from their competitors Their margins are squeezed and they must reduce the cost of sales Lessons from the survey include the following: l Use online and social networking media to build brand loyalty, attract influential buyers and gain ground-level feedback Use online services to get as much information as possible from the consumer rather than relying on retail store-level pass-back l Develop internal procedures to analyse and segment the retail/distributor customer base l Manage the retailer/distributor relationships based on profitability; prioritise marketing expenditures based on the value of the individual retailer/distributor © Economist Intelligence Unit Limited 2009 Appendix Overall survey results Beyond transactions Building customer partnerships in consumer goods Appendix 1: Overall survey results In your view, which of the following best represents the core strength of your overall business? Select only one (% respondents) Customer service and relationships: Building and managing relationships with key customers (retailers and distributors) to grow shelf presence and expand share of category 42 Differentiated marketing: Building brand equity by reaching consumers with compelling, relevant marketing 25 Operational excellence: Creating highly efficient processes 14 Product innovation: Being first to market with groundbreaking new products or services 14 Other Each of the organisation’s customer-facing departments influences the customer via different channels For each of the processes below, how closely your marketing, sales and customer service units work together? Please rate on a scale of to (% respondents) No coordination; units are completely separate Ad hoc coordination; not systematic or consistent Some procedures established, but not consistently followed Procedures established, regular interaction Broad, systematic and consistent integration of information and strategies Don’t know Planning and executing promotional activity 15 15 46 19 Developing and launching new products 12 19 38 27 Planning and executing marketing campaigns 12 27 36 20 Analysing and segmenting customers 14 29 32 14 30 14 Analysing and segmenting consumers 12 10 32 Gauging customer satisfaction 12 19 25 33 10 Measuring effectiveness of processes 11 16 36 23 11 25 Responding to customer demands or complaints 19 39 Incorporating customer feedback into products/services 23 19 36 14 Other 8 12 73 Economist Intelligence Unit 2009 Appendix Overall survey results Beyond transactions Building customer partnerships in consumer goods Do you agree or disagree with the following statements? (% respondents) Agree Disagree Don’t know In choosing to business with my organisation, prices are the single most important factor most customers consider 24 73 If price is not driving factor, my organisation can win shelf space and expand its presence in the category based on service, convenience, brand reputation or other intangibles 73 19 My organisation has stronger relationships with retailers and distributors than our competitors 63 26 11 My organisation has an accurate way to estimate the lifetime value of retailers or distributors 24 57 19 45 19 My organisation prioritises sales and marketing resources based on the lifetime value of each retailer or distributor 36 We are currently developing a social media strategy 29 46 25 My organisation has more flexibility that its competitors in pricing its products 46 48 Despite the recession, my organisation has greatly strengthened customer relationships over the past 12 months 65 26 43 We are more engaged in developing products or services collaboratively with retailers and distributors we were 12 months ago 49 My organisation has integrated its activities to provide high-quality service to retailers and distributors at all touch points 58 31 11 Consumers view my organisation’s products and services more as commodities now than five years ago 46 40 13 Our margins are higher than the margins of most of our competitors 35 50 In your view, which of your organisation’s activities are most in need of improvement? Select up to four (% respondents) 15 Which of the following would provide the biggest benefits in integrating your organisation’s marketing, sales and service activities? Select up to three (% respondents) Measuring/optimising effectiveness of marketing and promotional campaigns 43 Reducing the cost of sales Helping each function within your organisation find and act on ways to support the others 43 43 Maximising repeat purchases and building consumer loyalty 33 36 Creating effective consumer marketing campaigns 31 Involving customers in product/service development (co-creation) 30 Targeting the right consumers in order to achieve sales volume and revenue objectives 25 Cross-selling or upselling consumers 25 Gathering consumer intelligence in the course of providing service 24 Building long-term relationships with customers (retailers and distributors) 23 Ensuring that service issues with retailers and distributors are resolved quickly 20 Measuring the satisfaction of retailers and distributors 17 Segmenting and profiling consumers 13 Segmenting and profiling customers (retailers and distributors) 12 Other Don’t know Developing and sharing a detailed picture of consumer behaviors and preferences Measuring the probability that planned promotions will result in achieving sales and volume targets 32 Integrating tracking of retailer relationships from annual planning through promotions to claims management 29 Establishing common definitions, assumptions and data 27 Making each part of your organisation aware of how the others have interacted with a given retailer or distributor 26 Presenting retailers and distributors with a consistent picture of the organisation 25 Prioritising resources directed towards retailers and distributors by total value over the life of the relationship 23 Our company sees no need to integrate our marketing, sales and service activities Other Don’t know/Not applicable Economist Intelligence Unit 2009 Appendix Americas survey results Beyond transactions Building customer partnerships in consumer goods Which of the following trends have had the greatest impact on your business over the past 12 months? Select up to three In which of the following ways does your organisation empower consumers? Select all that apply (% respondents) (% respondents) Global economic downturn 68 Offering additional value along with products (ie, in-store service, merchandising improvements, sustainable packaging, etc) 54 Evolving consumer needs Building or supporting online communities of consumers 29 36 Significant demand shifts for our products/services Improving usability, search and navigation of consumer-facing websites 25 36 Emergence of new competitors Creating educational forums for consumers (eg, online content, in-store content, communities of interest, direct-to-consumer outreach, etc) 21 Changing requirements among retailers and distributors 36 21 Other Finding access to credit/capital 11 Don’t know/Not applicable Disruptive technology developments 14 11 Accessing key components or resources through our supply chain 11 Focusing on sustainability efforts What avenues of retailer and consumer feedback is your organisation best and worst at collecting and using to improve the experience of both types of customers? Select up to three from each column 11 Emergence of new markets for our products and services Other (% respondents) 11 We are best at collecting and using We are worst at collecting and using Don’t know Point of sale feedback 43 14 Feedback from in-store sales staff In which of the following ways does your organisation empower retailers and distributors? Select all that apply 36 14 (% respondents) Our own e-commerce site(s) 25 Making prices and sales terms more transparent for easy comparability 18 29 Third-party e-commerce sites Investing in self-service tools across multiple channels (web, mobile devices, e-mail, point of sale) 29 Phone order interaction 25 Improving usability, search and navigation of retailer- and distributor-facing websites 29 14 Direct response feedback 21 32 Improving online or self-service product support tools 18 Call center customer service interactions Other 21 Don’t know/Not applicable Targeted focus groups 36 32 21 Online social media efforts 18 32 Other 0 Don’t know 25 15 Economist Intelligence Unit 2009 Appendix Americas survey results Beyond transactions Building customer partnerships in consumer goods How well is customer and consumer information from all sources used to accomplish the following goals? (% respondents) Consistently and systematically Not at all Don’t know Empower salespeople 14 29 36 7 Empower customer service staff 11 46 18 14 11 Create effective marketing campaigns 11 39 36 14 Refine product development process 14 29 29 25 Forecast demand 27 38 19 Improve customer service 11 36 29 14 11 Improve retail offerings and selections 46 29 Adjust pricing 30 56 My organisation’s greatest challenges in using information from retailers and consumers to improve the customer experience are: Select up to three 4 In which region are you personally based? (% respondents) North America (% respondents) 89 Latin America Putting recommendations into action 11 36 Persuading consumers to share experiences, both positive and negative 29 Dealing systematically with extremely high volumes of retailer information 29 Synthesising information from retail outlets into coherent recommendations 29 Monitoring the results of actions in terms of consumer behavior and marketing metrics Asia-Pacific Eastern Europe Western Europe Middle East and Africa 29 Demonstrating to retailers and consumers that their comments are being addressed 25 Distinguishing relevant from irrelevant retailer and consumer information Who are your organisation’s primary customers? (% respondents) 21 Persuading our employees to share feedback from retailers, both positive and negative 18 Synthesising information from customer service into coherent recommendations Synthesising information from online channels into coherent recommendations Individuals (eg, retail) 39 Businesses or other organisations (eg, business-to-business) 39 An equal mix of both 21 Other Don’t know 16 Economist Intelligence Unit 2009 Appendix Americas survey results Beyond transactions Building customer partnerships in consumer goods What are your main functional roles? Please choose no more than three functions Which of the following best describes your title? (% respondents) (% respondents) Board member General management 29 CEO/President/Managing director Marketing 29 CFO/Treasurer/Comptroller Sales 29 CIO/Technology director Strategy and business development 21 Other C-level executive Operations and production 18 SVP/VP/Director Finance 18 14 Head of Business Unit R&D 11 Head of Department Information and research 14 Manager 43 Supply-chain management Other IT Procurement What are your organisation’s global annual revenues in US dollars? Legal (% respondents) Human resources 4 Risk $500m or less 50 $500m to $1bn 11 17 $1bn to $5bn $5bn to $10bn $10bn or more 29 Customer service Other 14 Economist Intelligence Unit 2009 Appendix Asia-Pacific survey results Beyond transactions Building customer partnerships in consumer goods Appendix 3: Asia-Pacific survey results In your view, which of the following best represents the core strength of your overall business? Select only one (% respondents) Customer service and relationships: Building and managing relationships with key customers (retailers and distributors) to grow shelf presence and expand share of category 46 Differentiated marketing: Building brand equity by reaching consumers with compelling, relevant marketing 27 Operational excellence: Creating highly efficient processes 12 Product innovation: Being first to market with groundbreaking new products or services Other Each of the organisation’s customer-facing departments influences the customer via different channels For each of the processes below, how closely your marketing, sales and customer service units work together? Please rate on a scale of to (% respondents) No coordination; units are completely separate Ad hoc coordination; not systematic or consistent Some procedures established, but not consistently followed Procedures established, regular interaction Broad, systematic and consistent integration of information and strategies Don’t know Planning and executing promotional activity 19 15 50 15 Developing and launching new products 12 23 27 38 27 15 19 38 23 Planning and executing marketing campaigns 23 38 Analysing and segmenting customers 12 12 19 42 Analysing and segmenting consumers 15 19 38 Gauging customer satisfaction 15 19 19 Measuring effectiveness of processes 15 27 27 Responding to customer demands or complaints 12 19 23 35 Incorporating customer feedback into products/services 31 42 19 Other 17 18 17 67 Economist Intelligence Unit 2009 Appendix Asia-Pacific survey results Beyond transactions Building customer partnerships in consumer goods Do you agree or disagree with the following statements? (% respondents) Agree Disagree Don’t know In choosing to business with my organisation, prices are the single most important factor most customers consider 23 73 If price is not driving factor, my organisation can win shelf space and expand its presence in the category based on service, convenience, brand reputation or other intangibles 69 19 12 23 12 My organisation has stronger relationships with retailers and distributors than our competitors 65 My organisation has an accurate way to estimate the lifetime value of retailers or distributors 15 62 23 My organisation prioritises sales and marketing resources based on the lifetime value of each retailer or distributor 31 42 27 We are currently developing a social media strategy 12 50 38 My organisation has more flexibility that its competitors in pricing its products 50 46 Despite the recession, my organisation has greatly strengthened customer relationships over the past 12 months 69 23 We are more engaged in developing products or services collaboratively with retailers and distributors we were 12 months ago 62 27 12 31 12 My organisation has integrated its activities to provide high-quality service to retailers and distributors at all touch points 58 Consumers view my organisation’s products and services more as commodities now than five years ago 54 27 19 Our margins are higher than the margins of most of our competitors 38 54 In your view, which of your organisation’s activities are most in need of improvement? Select up to four (% respondents) Which of the following would provide the biggest benefits in integrating your organisation’s marketing, sales and service activities? Select up to three (% respondents) Measuring/optimising effectiveness of marketing and promotional campaigns 54 Reducing the cost of sales Developing and sharing a detailed picture of consumer behaviors and preferences 46 46 Building long-term relationships with customers (retailers and distributors) 42 Involving customers in product/service development (co-creation) 38 Gathering consumer intelligence in the course of providing service 35 Targeting the right consumers in order to achieve sales volume and revenue objectives 27 Cross-selling or upselling consumers 27 Ensuring that service issues with retailers and distributors are resolved quickly 27 Creating effective consumer marketing campaigns 23 Maximising repeat purchases and building consumer loyalty 23 Measuring the satisfaction of retailers and distributors 23 Segmenting and profiling customers (retailers and distributors) 15 Segmenting and profiling consumers Other Don’t know Helping each function within your organisation find and act on ways to support the others 46 Measuring the probability that planned promotions will result in achieving sales and volume targets 42 Making each part of your organisation aware of how the others have interacted with a given retailer or distributor 35 Integrating tracking of retailer relationships from annual planning through promotions to claims management 31 Prioritising resources directed towards retailers and distributors by total value over the life of the relationship 27 Establishing common definitions, assumptions and data 23 Presenting retailers and distributors with a consistent picture of the organisation 19 Our company sees no need to integrate our marketing, sales and service activities Other Don’t know/Not applicable 0 19 Economist Intelligence Unit 2009 Appendix Asia-Pacific survey results Beyond transactions Building customer partnerships in consumer goods Which of the following trends have had the greatest impact on your business over the past 12 months? Select up to three In which of the following ways does your organisation empower consumers? Select all that apply (% respondents) (% respondents) Evolving consumer needs 58 Offering additional value along with products (ie, in-store service, merchandising improvements, sustainable packaging, etc) 69 Global economic downturn 46 Improving usability, search and navigation of consumer-facing websites 46 Building or supporting online communities of consumers 38 Changing requirements among retailers and distributors 31 Emergence of new competitors 35 Accessing key components or resources through our supply chain Creating educational forums for consumers (eg, online content, in-store content, communities of interest, direct-to-consumer outreach, etc) 27 23 Significant demand shifts for our products/services 23 Focusing on sustainability efforts Other Don't know/Not applicable 19 Emergence of new markets for our products and services 12 Finding access to credit/capital Disruptive technology developments Other What avenues of retailer and consumer feedback is your organisation best and worst at collecting and using to improve the experience of both types of customers? Select up to three from each column (% respondents) We are best at collecting and using We are worst at collecting and using Don’t know Point of sale feedback 27 35 In which of the following ways does your organisation empower retailers and distributors? Select all that apply (% respondents) Feedback from in-store sales staff 35 23 Our own e-commerce site(s) 12 Making prices and sales terms more transparent for easy comparability 62 Improving online or self-service product support tools 42 Third-party e-commerce sites 35 Investing in self-service tools across multiple channels (web, mobile devices, e-mail, point of sale) 31 Improving usability, search and navigation of retailerand distributor-facing websites 23 Other 54 Phone order interaction 31 12 Direct response feedback 38 Call center customer service interactions 31 Don’t know/Not applicable Targeted focus groups 27 Online social media efforts 23 Other 0 Don’t know 8 20 Economist Intelligence Unit 2009 Appendix Asia-Pacific survey results Beyond transactions Building customer partnerships in consumer goods How well is customer and consumer information from all sources used to accomplish the following goals? (% respondents) Consistently and systematically Not at all Don’t know Empower salespeople 27 38 35 Empower customer service staff 12 54 15 15 Create effective marketing campaigns 19 42 27 12 Refine product development process 19 27 46 4 Forecast demand 38 35 12 Improve customer service 19 42 19 15 Improve retail offerings and selections 23 27 27 8 Adjust pricing 50 My organisation’s greatest challenges in using information from retailers and consumers to improve the customer experience are: Select up to three 23 8 In which region are you personally based? (% respondents) Asia-Pacific (% respondents) 100 Latin America Synthesising information from retail outlets into coherent recommendations 58 Persuading consumers to share experiences, both positive and negative North America 35 Eastern Europe Demonstrating to retailers and consumers that their comments are being addressed Western Europe 35 Putting recommendations into action 0 Middle East and Africa 31 Monitoring the results of actions in terms of consumer behavior and marketing metrics 31 Persuading our employees to share feedback from retailers, both positive and negative Who are your organisation’s primary customers? (% respondents) 23 Synthesising information from online channels into coherent recommendations 23 Distinguishing relevant from irrelevant retailer and consumer information 15 Dealing systematically with extremely high volumes of retailer information 12 Synthesising information from customer service into coherent recommendations Individuals (eg, retail) 54 Businesses or other organisations (eg, business-to-business) 35 An equal mix of both 12 12 Other Don't know 21 Economist Intelligence Unit 2009 Appendix Asia-Pacific survey results Beyond transactions Building customer partnerships in consumer goods What are your main functional roles? Please choose no more than three functions Which of the following best describes your title? (% respondents) (% respondents) Board member General management CEO/President/Managing director 42 Finance 19 CFO/Treasurer/Comptroller 31 Strategy and business development CIO/Technology director 15 Sales Other C-level executive 15 Customer service SVP/VP/Director 15 Procurement 15 Head of Business Unit 15 12 IT 12 Operations and production Head of Department 12 Manager 12 27 Marketing Other 12 Supply-chain management Risk What are your organisation’s global annual revenues in US dollars? Information and research (% respondents) R&D 4 Legal $500m or less 46 $500m to $1bn 12 22 $1bn to $5bn 12 $5bn to $10bn 12 $10bn or more 19 Human resources Other Economist Intelligence Unit 2009 Appendix EMEA survey results Beyond transactions Building customer partnerships in consumer goods Appendix 4: Europe Middle East and Africa survey results In your view, which of the following best represents the core strength of your overall business? Select only one (% respondents) Customer service and relationships: Building and managing relationships with key customers (retailers and distributors) to grow shelf presence and expand share of category 47 Differentiated marketing: Building brand equity by reaching consumers with compelling, relevant marketing 33 Operational excellence: Creating highly efficient processes 10 Product innovation: Being first to market with groundbreaking new products or services Other Each of the organisation’s customer-facing departments influences the customer via different channels For each of the processes below, how closely your marketing, sales and customer service units work together? Please rate on a scale of to (% respondents) No coordination; units are completely separate Ad hoc coordination; not systematic or consistent Some procedures established, but not consistently followed Procedures established, regular interaction Broad, systematic and consistent integration of information and strategies Don’t know Planning and executing promotional activity 17 10 47 27 47 27 Developing and launching new products 10 13 Planning and executing marketing campaigns 20 20 40 20 Analysing and segmenting customers 17 37 27 13 7 Analysing and segmenting consumers 13 10 37 33 Gauging customer satisfaction 27 37 30 Measuring effectiveness of processes 17 43 30 Responding to customer demands or complaints 17 47 23 10 Incorporating customer feedback into products/services 24 31 31 Other 100 23 Economist Intelligence Unit 2009 Appendix EMEA survey results Beyond transactions Building customer partnerships in consumer goods Do you agree or disagree with the following statements? (% respondents) Agree Disagree Don’t know In choosing to business with my organisation, prices are the single most important factor most customers consider 23 77 If price is not driving factor, my organisation can win shelf space and expand its presence in the category based on service, convenience, brand reputation or other intangibles 80 10 10 My organisation has stronger relationships with retailers and distributors than our competitors 60 27 13 My organisation has an accurate way to estimate the lifetime value of retailers or distributors 23 60 17 40 17 My organisation prioritises sales and marketing resources based on the lifetime value of each retailer or distributor 43 We are currently developing a social media strategy 40 50 10 50 10 My organisation has more flexibility that its competitors in pricing its products 40 Despite the recession, my organisation has greatly strengthened customer relationships over the past 12 months 70 23 We are more engaged in developing products or services collaboratively with retailers and distributors we were 12 months ago 40 57 My organisation has integrated its activities to provide high-quality service to retailers and distributors at all touch points 67 27 53 Consumers view my organisation’s products and services more as commodities now than five years ago 40 Our margins are higher than the margins of most of our competitors 30 57 In your view, which of your organisation’s activities are most in need of improvement? Select up to four (% respondents) 13 Which of the following would provide the biggest benefits in integrating your organisation’s marketing, sales and service activities? Select up to three (% respondents) Measuring/optimising effectiveness of marketing and promotional campaigns 53 Maximising repeat purchases and building consumer loyalty Helping each function within your organisation find and act on ways to support the others 37 47 Reducing the cost of sales 43 33 Creating effective consumer marketing campaigns 37 Involving customers in product/service development (co-creation) 30 Gathering consumer intelligence in the course of providing service 27 Ensuring that service issues with retailers and distributors are resolved quickly 23 Targeting the right consumers in order to achieve sales volume and revenue objectives 20 Cross-selling or upselling consumers 20 Measuring the satisfaction of retailers and distributors 20 Segmenting and profiling consumers 10 Segmenting and profiling customers (retailers and distributors) 10 Building long-term relationships with customers (retailers and distributors) 10 Other Don’t know Presenting retailers and distributors with a consistent picture of the organisation Integrating tracking of retailer relationships from annual planning through promotions to claims management 33 Establishing common definitions, assumptions and data 30 Developing and sharing a detailed picture of consumer behaviors and preferences 30 Making each part of your organisation aware of how the others have interacted with a given retailer or distributor 30 Measuring the probability that planned promotions will result in achieving sales and volume targets 27 Prioritising resources directed towards retailers and distributors by total value over the life of the relationship 23 Our company sees no need to integrate our marketing, sales and service activities Other Don’t know/Not applicable 24 Economist Intelligence Unit 2009 Appendix EMEA survey results Beyond transactions Building customer partnerships in consumer goods Which of the following trends have had the greatest impact on your business over the past 12 months? Select up to three In which of the following ways does your organisation empower consumers? Select all that apply (% respondents) (% respondents) Global economic downturn 80 Offering additional value along with products (ie, in-store service, merchandising improvements, sustainable packaging, etc) 67 Emergence of new competitors Creating educational forums for consumers (eg, online content, in-store content, communities of interest, direct-to-consumer outreach, etc) 40 Changing requirements among retailers and distributors 33 30 Improving usability, search and navigation of consumer-facing websites Evolving consumer needs 30 30 Building or supporting online communities of consumers Significant demand shifts for our products/services 27 23 Other Finding access to credit/capital 13 Don’t know/Not applicable Disruptive technology developments 10 10 Focusing on sustainability efforts 10 Emergence of new markets for our products and services What avenues of retailer and consumer feedback is your organisation best and worst at collecting and using to improve the experience of both types of customers? Select up to three from each column Accessing key components or resources through our supply chain Other (% respondents) 10 We are best at collecting and using We are worst at collecting and using Don’t know Point of sale feedback 47 27 Feedback from in-store sales staff In which of the following ways does your organisation empower retailers and distributors? Select all that apply 37 27 (% respondents) Our own e-commerce site(s) 17 Making prices and sales terms more transparent for easy comparability 27 53 Investing in self-service tools across multiple channels (web, mobile devices, e-mail, point of sale) Third-party e-commerce sites 37 43 Phone order interaction Improving online or self-service product support tools 23 Improving usability, search and navigation of retailer- and distributor-facing websites 13 Other 20 10 Direct response feedback 30 13 Call center customer service interactions 13 10 Don’t know/Not applicable Targeted focus groups 40 13 Online social media efforts 23 Other 0 Don’t know 13 25 Economist Intelligence Unit 2009 Appendix EMEA survey results Beyond transactions Building customer partnerships in consumer goods How well is customer and consumer information from all sources used to accomplish the following goals? (% respondents) Consistently and systematically Not at all Don’t know Empower salespeople 14 31 31 14 Empower customer service staff 10 27 43 17 23 20 Create effective marketing campaigns 23 33 17 Refine product development process 13 33 30 Forecast demand 27 27 30 17 Improve customer service 24 34 38 10 3 Improve retail offerings and selections 60 23 47 23 Adjust pricing 17 My organisation’s greatest challenges in using information from retailers and consumers to improve the customer experience are: Select up to three In which region are you personally based? (% respondents) Western Europe (% respondents) 57 Eastern Europe Monitoring the results of actions in terms of consumer behavior and marketing metrics 23 Middle East and Africa 43 Synthesising information from retail outlets into coherent recommendations 33 Persuading consumers to share experiences, both positive and negative 30 Persuading our employees to share feedback from retailers, both positive and negative 27 20 Asia-Pacific Latin America North America Putting recommendations into action 27 Distinguishing relevant from irrelevant retailer and consumer information 23 Who are your organisation’s primary customers? (% respondents) Synthesising information from customer service into coherent recommendations 23 Dealing systematically with extremely high volumes of retailer information 20 Synthesising information from online channels into coherent recommendations 17 Demonstrating to retailers and consumers that their comments are being addressed Individuals (eg, retail) 50 Businesses or other organisations (eg, business-to-business) 40 An equal mix of both 10 13 Other Don’t know 26 Economist Intelligence Unit 2009 Appendix EMEA survey results Beyond transactions Building customer partnerships in consumer goods What are your main functional roles? Please choose no more than three functions Which of the following best describes your title? (% respondents) (% respondents) Board member General management CEO/President/Managing director 50 20 Strategy and business development CFO/Treasurer/Comptroller 33 Marketing 10 CIO/Technology director 30 Finance Other C-level executive 20 Operations and production SVP/VP/Director 17 Sales 13 Head of Business Unit 17 IT Head of Department 13 20 Procurement Manager 10 Supply-chain management 13 Other Risk Customer service What are your organisation’s global annual revenues in US dollars? Legal (% respondents) Human resources 3 Information and research $500m or less 27 40 R&D $500m to $1bn $1bn to $5bn Other $5bn to $10bn 10 $10bn or more 47 Economist Intelligence Unit 2009 28 Cover image: Shutterstock Whilst every effort has been taken to verify the accuracy of this information, neither The Economist Intelligence Unit Ltd nor the sponsors of this report can accept any responsibility or liability for reliance by any person on this white paper or any of the information, opinions or conclusions set out in the white paper LONDON 26 Red Lion Square London WC1R 4HQ United Kingdom Tel: (44.20) 7576 8000 Fax: (44.20) 7576 8476 E-mail: london@eiu.com NEW YORK 111 West 57th Street New York NY 10019 United States Tel: (1.212) 554 0600 Fax: (1.212) 586 1181/2 E-mail: newyork@eiu.com HONG KONG 6001, Central Plaza 18 Harbour Road Wanchai Hong Kong Tel: (852) 2585 3888 Fax: (852) 2802 7638 E-mail: hongkong@eiu.com [...]... 8 0 Planning and executing marketing campaigns 8 4 23 38 Analysing and segmenting customers 12 12 19 42 Analysing and segmenting consumers 15 8 19 38 Gauging customer satisfaction 15 19 19 Measuring effectiveness of processes 15 27 27 Responding to customer demands or complaints 8 12 19 23 35 4 Incorporating customer feedback into products/services 4 31 4 42 19 Other 17 18 17 67 Economist Intelligence... Gathering consumer intelligence in the course of providing service 35 Targeting the right consumers in order to achieve sales volume and revenue objectives 27 Cross-selling or upselling consumers 27 Ensuring that service issues with retailers and distributors are resolved quickly 27 Creating effective consumer marketing campaigns 23 Maximising repeat purchases and building consumer loyalty 23 Measuring... 18 4 Measuring effectiveness of processes 15 4 37 15 19 11 Responding to customer demands or complaints 7 4 21 46 18 4 14 4 Incorporating customer feedback into products/services 11 14 21 36 Other 7 13 7 14 7 64 Economist Intelligence Unit 2009 0 Appendix 2 Americas survey results Beyond transactions Building customer partnerships in consumer goods Do you agree or disagree with the following statements?... Targeting the right consumers in order to achieve sales volume and revenue objectives 32 29 Maximising repeat purchases and building consumer loyalty Establishing common definitions, assumptions and data 29 29 Cross-selling or upselling consumers 29 Measuring the probability that planned promotions will result in achieving sales and volume targets 29 Segmenting and profiling consumers 25 Measuring/optimising... Planning and executing promotional activity 17 10 47 27 47 27 Developing and launching new products 3 10 13 0 Planning and executing marketing campaigns 20 20 40 20 Analysing and segmenting customers 7 17 37 27 13 0 7 0 3 0 7 0 Analysing and segmenting consumers 13 10 37 33 Gauging customer satisfaction 3 27 37 30 Measuring effectiveness of processes 3 17 43 30 Responding to customer demands or complaints... 17 47 23 3 10 3 Incorporating customer feedback into products/services 24 31 31 Other 100 23 Economist Intelligence Unit 2009 Appendix 4 EMEA survey results Beyond transactions Building customer partnerships in consumer goods Do you agree or disagree with the following statements? (% respondents) Agree Disagree Don’t know In choosing to do business with my organisation, prices are the single most important... 33 Creating effective consumer marketing campaigns 37 Involving customers in product/service development (co-creation) 30 Gathering consumer intelligence in the course of providing service 27 Ensuring that service issues with retailers and distributors are resolved quickly 23 Targeting the right consumers in order to achieve sales volume and revenue objectives 20 Cross-selling or upselling consumers... Economist Intelligence Unit 2009 Appendix 4 EMEA survey results Beyond transactions Building customer partnerships in consumer goods Appendix 4: Europe Middle East and Africa survey results In your view, which of the following best represents the core strength of your overall business? Select only one (% respondents) Customer service and relationships: Building and managing relationships with key customers... results Beyond transactions Building customer partnerships in consumer goods Do you agree or disagree with the following statements? (% respondents) Agree Disagree Don’t know In choosing to do business with my organisation, prices are the single most important factor most customers consider 23 73 4 If price is not driving factor, my organisation can win shelf space and expand its presence in the category... established, regular interaction 5 Broad, systematic and consistent integration of information and strategies Don’t know Planning and executing promotional activity 4 11 21 43 14 7 Developing and launching new products 4 14 21 39 18 4 Planning and executing marketing campaigns 7 11 39 29 14 Analysing and segmenting customers 7 14 29 29 14 7 18 7 Analysing and segmenting consumers 7 11 39 18 Gauging customer satisfaction .. .Beyond transactions Building customer partnerships in consumer goods Preface Beyond transactions: Building customer partnerships in consumer goods is an Economist Intelligence Unit... Economist Intelligence Unit Limited 2009 Beyond transactions Building customer partnerships in consumer goods Introduction The global recession and falling demand have hit the consumer goods sector... Economist Intelligence Unit Limited 2009 Beyond transactions Building customer partnerships in consumer goods Conclusion Consumer goods manufacturers are faced with the need to retain market share in