The continuing shift of the cost burden from the retailer to the supplier, combined with the growing power of the retailer, the store and the shopper, requires a disciplined approach to the management of customer relationships. In this environment there must be a customer alignment strategy that aligns with the corporate strategic plan; there must be alignment of brand strategies and tactics with those of the customer; there must be a value proposition that creates competitive advantage; and resource allocation guidelines must be aligned with the size of the opportunity and anticipated return on investment.
When we ask the question “Do you have a formal customer relationship strategy and plan? The typical reaction is silence, with managers looking at each other waiting for the other to answer, and then… “Well no, not a formal plan”.
CPG manufacturers who do not address this issue will experience an increasing gap between customer relationship desired outcomes and actual results. Going forward, the development of a formal customer relationship strategy and plan should be a priority.
Strategic Customer Alignment ModelSM
WWA’s Strategic Customer Alignment ModelSM is a comprehensive approach to how an organization defines, aligns and manages their customer relationships to drive profitable growth.
We determine marketplace value by assessing the contribution a company’s brands bring to market, the competitive landscape and the category importance to the consumer and the customer. We examine, in detail, the six key elements of strategic leverage…brand leverage, value added services, organizational design, resource availability and allocation, skills and support technology. This enables us to identify key points of leverage with the customer, the value proposition and competitive differentiation. We then assess customer alignment processes in areas such as customer marketing, category development, integrated sales and marketing planning, account planning and global practices. In the next step we segment customers based on the opportunity they provide,
both today and tomorrow. Finally, we assess profit pool effectiveness drivers with a focus on how to improve value capture for our client.
The Customer Alignment Strategy and Plan provides the framework from which a CPG manufacturer’s relationships with customers is defined and supported. In a broad sense the content of the Customer Alignment Strategy and Plan is outlined below:
The development of core strategies and required actions typically focuses on those areas that are critical to a CPG manufacturer’s ability to strengthen its customer management/category management capabilities.
The resulting Customer Alignment Strategy and Plan enables a CPG manufacturer to better align brand strategies and tactics with those of the customer; it provides a value proposition that creates competitive advantage; it aligns planning across functions and from top down to the customer; and it guides the efficient allocation of resources across customers and channels, Importantly, it positions a company to achieve its desired sales and profit objectives on a customer by customer basis, and in total.
Guiding Principles for Approaching Customer Alignment
The following outlines our guiding principles for approaching customer alignment:
- Build and Maintain Brand Loyalty with Consumers:
Strong consumer loyalty to a brand provides a framework for effective customer and category management go-to-market initiatives. We believe that a fine balance must be maintained between investment toward the customer and investment toward the consumer.
- Treat Top Customers as a Business Unit:
The same disciplines applied to managing a brand franchise should be applied to managing the top tier of customers. The Customer Management Strategy and Plan provides a foundation for developing these disciplines and allocating resources for the greatest return on investment.
- Implement Solutions with Customer Perspective:
Our approach is to enhance a CPG manufacturer’s capabilities in alignment with the needs of the customer. This approach also enables our clients to profitably grow category/brand sales.
- Utilize an Integrated Organizational Philosophy:
The organization must be aligned to meet the specific needs and requirements of its major customers. Cross-functional processes must be aligned to support cross-functional interdependence.
-
Manage Based on Value-Focused Practicality:
Value-based management focuses on the efficient use of resources for the mutual benefit of the supplier and retailer; identification of the best opportunities provide for the best potential return on investment.
Our Experience and Expertise
We have developed Customer Alignment Strategies and Plans for dozens of CPG manufacturer clients ranging from $300 million to over $6 billion in sales. Our extensive operating and consulting experience with both manufacturers and retailers ensures solution’s that will drive maximum leverage and return on investment for resources deployed across channels and customers. The strategic clarity resulting from the work has driven enhanced performance for our clients in the short run as well as the long term.
|
