Chapter 11

In-house activity in support of implementation

If the premise of this book is accepted – that the customer is the start point on which everything depends to operate a successful business – then there is in-house activity that should be considered by the board of directors or the owner that will impinge on the running of marketing, including sales, and marketing communications – and, in particular promotions, and promotional offers.

First, the structure and organisation of the business needs to truly serve and match the customer need (this may need to be geographically based with delegation of responsibility) and have a customer focus (not just lip service) in all operations; the resources (funding and providing staff – carefully selected and trained) must be in place to fully understand the customer (obtain Insight) and the support service be just that, supporting. There needs to be in place a process for planning and implementation and measuring the success or otherwise of such plans with a corporate memory facility. Finally, an analysis of potential risks and opportunities should produce contingencies and crisis plans (for promotions) that are ready to run.

Organising and structuring the business

Separate functions, such as finance, production, sales and marketing, continue to exist in firms and they can be managed well or badly. Whether people buy a product or work for a firm, they are all engaged in relationships that satisfy their needs to a greater or lesser extent. This dependency on relationships is across all the internal and external boundaries of a firm. What characterises these relationships? Money plays a large part – whether in salaries for staff, dividends to shareholders or invoices to customers. However, there is much more to it than that – like loyalty, expectation and human feeling. The task of business is to maximise the value of those relationships.

The work of a business is a process that takes place every time someone buys or uses the company’s products or services. Relationships are created and strengthened in a process by which the customer’s and other stakeholders’ needs are satisfied to contribute to the success of the business. The successful firm is one which creates a distinctive character in these relationships and which operates in an environment that maximises the value of that distinctiveness. A good marketing department does not create a competitive advantage on its own any longer. It is the fact that production made it, finance sorted out the payment, dispatch delivered it to the customer who was happy and said so, communicating through feedback – social media or in direct response to the business. The customer, if well satisfied and with ongoing relationship communication reminders, will return, probably bringing others and will purchase more. The engram research supports all this. A customer now uses his or her subconscious ‘mind file’ and the messages it receives as part of the decision process as to whether to buy or not.

This means a business needs to examine its internal and external relationships and develop a structure – an organisation – that makes relationship building easy. IBM advocates unifying all customer-facing functions under one person. Sales, marketing, stocking and delivery immediately fit with this; however, if you have a number of outlets geographically separate, what then? Each core store or outlet then needs to be a unified team of them all, with a team manager who has delegated the power to carry out marketing to obtain Insight with access to data on their local customers as a segment and then, through delegated ability, communicate locally, sell, stock and deliver your business products and services. The centre of the business then takes on a supporting role to staff, trains them and of course provides the budget to obtain the Insight, based on which the team communicates with the local customer. The power delegated to the team has to include the building of relationships between each outlet and their suppliers and sharing Insight so that stock and maintaining stock levels and working together on promotions is part of local – not central – operation. The capability to be agile then can become reality. The team using real-time Insight can notice a product disappearing off the shelf and can contact the supplier and re-order – fast. For example: to stock the clothes or the dress a celebrity (or prince or princess) was wearing, a menu item or utensil or tool used by a TV chef or counter a newspaper report of a shortage. How often are we told an item is not available? The facts indicate up to 13 per cent of the time.

Core stores are surrounded by more people, likely to buy, than non-core stores. For some companies, the difference might be slight. For others, the difference can be vast. Pick your core stores. Research and profile the customers that use that store (from Insight – see below). You need then to stock the brands, products and services those profiled customers prefer. In other words, by segmenting people and the stores they use: limiting your communications to the local area, with some direct and general promotion and in-store preparedness; and communicating the product promotion in store and on pack, you become a focussed Shopper Marketing Organisation. To find your core stores, access that from data you already hold.

Delivering Insight

Facts

• Three quarters of enterprises now say they use big data for strategic decision making, with 65 per cent of finance heads confirming this to be the case.

• However, the Stibo Systems survey revealed that, despite being used across different business units, 61 per cent of senior managers said their company’s data were held by the IT department, with only 7 per cent saying it was the property of marketing, 21 per cent saying finance and 9 per cent admitting to not knowing who owned their business’s data.

It is often surprising that one part of an organisation can have information that would help another to succeed. An example of that is in the UK, where under half of all FMCG marketing managers make use of the store-by-store, epos data that are freely available to their companies to measure marketing impact. This information, however, shows how poor actual distribution can be in core retailers, as well as how poor availability is. So what does a core team need to consider to develop relationships?

1 Building trust and data capture on the shopper are this stage’s objectives

2 Local outdoor signage or advertising gently reminds the shopper approaching an outlet of what is potentially available in store, building their engram recollection. Local advertising needs to be in place for events, road shows, demonstrations or promotions. The retailer needs to increase the store presence locally to excess share of voice level.

3 In store, the retailer with the supplier can have a field day with on-pack, on-shelf and surrounding POP displays and retailer- or supplier-initiated promotions. Remember that recorded research shows 70 per cent of the purchase decisions are made ‘in store’, taking account of the influence of the subconscious engram, but that the barriers to purchase – for example a failure to stock and place on shelf – offer the shopper a chance to pick alternative ‘on promotion’ products or the services of competitors

4 Add a local promotion.

Gaining Insight

The subject of research that provides Insight is complex and marketers, as they delve into what they should do about it, tend to shy away from undertaking any, or rely on agencies (how often are they fully briefed by the marketer?), or just repeat the formula used for previous years (‘but we always have a sale then’, ‘we always advertise there’). Marketers need to ‘bite the bullet’ and think about what they need to know. Research providing Insight is further complicated by the fact that the consumer, as a shopper, can be influenced by the retailer, so pure research into the customer can be invalidated because the shopper/customer changes his or her mind in store or online at the point of sale as the result of some retailer activity. Research is, or should be, designed to bring communicable Insight. Insight gives you a new view of your problem which allows you to move forward. Insight is a function of the interpreter and the user, and not inherent in the research. Judgement brings you Insight, research delivers facts. Insight is not the same thing as research. The subject is worthy of a book, and in the preface to this book it was stated that we could not delve too far into the topic. But, as a taster, this is what can be achieved:

There are basically three types of research that companies could involve themselves in: consumer/customer research per se (who is your customer?), in the shop – shopper research (the consumer/customer in the shopping/purchasing environment – both in store and online) and retailer research (information gleaned by the retailer from their own data about shopper preferences and purchases).

Insight! The first research type is to do with the individual shopper/buyer, and revolves around their view of the product, the usage experience, the advertising messages they have seen and their future intentions. This is something only a business can investigate from its knowledge of who its customers are (that can be researched too!), and such – usually commissioned – research will provide valuable Insight into how to communicate with their customers, what their customers want by way of products and services and the delivery and how to best to establish a relationship with their customers (the Offer – Chapter 2). Researching the shopper as customer/buyer, to gain Insight, needs to cover ‘before entering the store’ or going online and the way the shopper goes about their search; their experience of the purchase, in-store or online; and then their experience of the service or product itself post purchase (social media/feedback). It is all part of the view as seen by the customer (see below for more).

Customer behaviour in store. The second area to look at is the in-store behaviour or the way the shopper reacts to their shopping environment in store/on the web site through observing how they react to the layout, the positioning of product etc. The retailer can influence this. The research here looks at shopper behaviour in the store and at the facing where the product is placed, which can be very powerful and can deliver important uplifts from change. Mostly these are camera based, either fixed in the store or eye tracking (could the shopper see and purchase the promoted items?).

Own data. A third area is to look at the retail side: the store epos data. This information is generated as a result of the sale and is not, per se, research into the shopper. On top of this you have information from shopper actions, such as social media reporting, or on-pack promotion take-up with data on stocking and availability issues.

So how can the marketer obtain Insight on their shopper customer?

It is now possible to track people by their attitudes and actions as well as just their simple demographics. Such targeting can have real impact on both the marketing budget AND the sales targets. One of the downfalls of conventional research is that the questions are provided by the researcher. Often the shopper has problems that may not be properly understood simply because the right question is not being asked. The current plethora of opinions on the web on Twitter, Facebook, et al. are, of course, well known, but how can they be used to produce a reliable and consistent picture of what real consumers and shoppers actually feel? What is needed is to turn the mass opinions you can find into something more tangible and measured that you can really work with. There are a number of search engines and companies offering feedback on these opinions. Twitter data are captured by web crawlers. These develop real-time feedback on a brand and a related emotion. Emotions can be identified in Twitter data using a computerised content-analysis tool called the Regressive-Imagery Dictionary (RID). The RID tool was developed and verified by academics several decades ago (note: other companies use eight categories rather than the seven shown in Table 11.1).

Table 11.1 Seven emotional categories related

Source: Martindale 1975.

Furthermore, as each Twitter comment is date-stamped, it is feasible to match aggregated Twitter data with aggregate behavioural measures at specific points in time. Plotting these measures over time allows us to draw conclusions about the impact of consumer feelings and perceptions on brand performance. All the tweets on a particular theme, such as excitement, bad service, high prices or executive pay, are then divided into time periods, such as weeks or days (or even hours of the day). Increasing or decreasing volumes of tweets can help spot critical trends such as the failure of a newly created marketing campaign or a potential PR crisis boiling up. This qualimetric data, quantifying volumes of tweets on important qualitative themes, can then be matched statistically with measures of brand performance such as brand consideration and sales to see how much these trends matter.

Cranfield took as their basis Aakers (1997) five dimensions of branding (Table 11.2).

Table 11.2 Five dimensions of branding

Source: Aakers 1975.

Communicate and promote

Follow the seven simple rules for marketing. Byron Sharp (How Brands Grow: Oxford University Press) established seven rules for successful marketers (republished here with permission):

• Reach all shoppers/consumers of the brands service or product category, both with physical distribution and marketing communication. All these people are potential buyers of the brand.

• Be easy to buy. Brands need to be where people would expect to see them – getting them onto the right shelves and keeping them there is an ongoing responsibility.

• Get the message across. In an age of multimedia, getting the message out has never been easier, but getting it across, never harder. Shoppers regularly avoid advertising et al. media. So embed an engram.

• Refresh and build appropriate memory structures. Re-invigorate and remember to enhance the engram.

• Create and use distinctive brand assets. Shoppers navigate by what they instinctively recognise – the brand images they are familiar with (the engram).

• Be consistent, yet fresh. Brands outlive people, and companies. They do this by delivering a consistent message across generations. However, this consistent message needs to be constantly re-imagined to cut through to new generations of potential users/consumers.

• Stay competitive – don’t give a reason not to buy. Brands need to focus on getting the best value for money from their discount events, while making sure that their core users – the loyalists who would buy at full price – are not disappointed in discount availability.

Install planning and implementation processes

There needs to be in place a process for planning and implementation. This is described in Chapter 3. Business objectives need to be considered and a business plan produced. From this will follow marketing objectives and a marketing plan. Promotions arise from the marketing plan. The elements of all plans need to translated into responsibilities for staff with the appropriate delegation of the powers to implement them. Job descriptions, the setting of work objectives and appraisals set down what is required and performance can then be measured. Teams can then set about the implementation of the plans and running the day-to-day operation. Customers will influence the operation making adjustments to accommodate the feedback gleaned from Insight (big data and analysis of social media, etc.).

Measure success or otherwise

This is covered in Chapter 15. Key performance indicators should be set for all operations, including promotions.

Build a corporate memory

Recording the measuring of success or otherwise of any marketing activity, including promotions, should be stored in a corporate memory facility. Part of the process of implementing a promotion should be the examination of previous promotions – to see what worked and what did not.

Assess risks and opportunities to produce contingency plans

Analysis of potential risks and opportunities should produce contingencies and crisis plans that are ready to run. This should include promotions with promotional offers that can be implemented at short notice.

Summary

Some would say that the contents of this chapter are simply the application of common sense. The business experience of the author reflects that this is not what happens in reality. Too many silos exist; business politics gets in the way; greed, fear and poor leadership harm the building of relationships that make for business success with hundreds or thousands of happy customers as a consequence.

Self-study questions

1 Assess your firm. Is it a customer-facing business? What needs to be done to address that?

2 Are the means to obtain real customer Insight in place? How could that be improved?