Creating Brand Awareness

Consumer goods CRM tests campaign effectiveness.

Consumer goods manufacturers face unique challenges when rolling out CRM applications, compared with other industries such as insurance or finance. For one thing, they don't typically focus on supporting call centers or remote sales force automation processes, but rather on building better marketing and sales campaigns. And they generally don't have direct contact with the end consumer, but rather deal exclusively with a middleman retailer or product distributor.

This complex sales process means consumer goods manufacturers tend to focus on product branding rather than on direct sales. As a result, one of the industry's biggest problems is getting advanced analytical CRM tools that can decipher just how well each branding campaign is working at each outlet.

CRM products for trade promotion and rudimentary customer analysis have been around for years, says Doug Turk, an analyst at Inforte Corp., a high-tech consultancy in Chicago. But now, he says, the major CRM vendors, such as SAP AG and San Mateo, Calif.-based Siebel Systems Inc., are starting to sell specific CRM add-ons for consumer goods manufacturers to help set prices for marketing campaigns and brand management, for example.

Who's Buying What

H.J. Heinz Co. wants to analyze its product promotions in greater detail using a more systematic approach, says George Chappelle, CIO at the Pittsburgh-based food products maker. The company's sales, finance and marketing specialists already use Siebel 7.5 to run trade promotion campaigns. The analytical module in the suite takes feeds from ERP and supply chain applications, allowing users to slice and dice the returns and expenses.

Soon, Heinz would like to break down each marketing campaign to determine profitability by each retail customer. Toward that end, Heinz last year launched a project to help it more precisely allocate, measure and account for all money spent during a campaign.

Chappelle says the upgrade will create tighter integration between the supply chain management system and Siebel applications that will enable the exchange of relevant forecasting information and deliver improved service and inventory management.

The upgraded system will also integrate various pieces of customer-related data to determine profitability, factoring in variables such as discounts, says Chappelle.

Besides the lack of advanced analytical capabilities, there are cultural problems that can prevent a smooth flow of CRM information back and forth through the supply chain. Manufacturers have to rely on the retailers to collect, record and send them the sales data, something the latter aren't always willing to do, according to Jim Prevo, CIO at Waterbury, Vt.-based Green Mountain Coffee Roasters Inc.

If retailers and suppliers shared more data, they could better determine the right mix of products in the sales channel. However, supermarket chains often either don't bother to gather pertinent sales data or are reluctant to share such information with manufacturers, preferring to sell it to independent research firms.

Green Mountain Coffee Roasters runs PeopleSoft CRM software to handle its monthly e-mail campaigns. The system sends the company's retail customers messages that have been tailored to their specific profiles based on records of previous buying habits, says Prevo. All customer data, including ordering history and other supply chain information, is consolidated in a central database to create an individual profile and then used to power the marketing application.

Access to Common Questions

The situation is different at camera and digital equipment maker Nikon Inc. in Melville, N.Y., which uses a hosted service center application from RightNow Technologies Inc., a CRM vendor in Bozeman, Mont. The application, called E-Service Center, lets both end customers and dealers access the most commonly asked technical questions, according to David Dentry, general manager of technical support at Nikon.

The software tracks inbound service calls and e-mail and offers customers a searchable database to help locate relevant information. Nikon personnel can see which customers are accessing the site, as well as the sorts of information they are viewing, and they can run reports to determine if a given technical article needs to be supplemented or replaced.

Nikon is rolling out the system globally, which will allow, for example, a European technical manager to take content from the U.S. site and immediately duplicate it on his own local site. It has become fairly common for high-tech electronics manufacturers to use CRM software to handle customer support, notes Dentry.

CRM is a key tool.

"I think the foundation of competition is understanding your customers and making purposeful contact with them," says Prevo. "Any tools that help companies accomplish those two objectives are going improve competitiveness."

Special Report

CRM Goes Vertical

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Copyright © 2004 IDG Communications, Inc.

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