Beyond retail: 4 ways to unlock direct-to-consumer relationships
Cheetah Digital’s 2022 Consumer Trends Index, consumers across the U.K. interact with a brand on multiple channels, oftentimes unpredictably. So what does this mean for DTC brands operating beyond the retail landscape?
- CPG and FMCG brands — that is, Consumer Packed Goods and Fast Moving Consumer Goods, respectively — are fortunate to have huge amounts of data at their disposal. However, sorting through what’s relevant and compliant and then unifying it into a single source of truth can be a mammoth task.
Yet, it’s crucial for brands to succeed in a competitive environment where, according to Cheetah Digital’s 2022 Consumer Trends Index, consumers across the U.K. interact with a brand on multiple channels, oftentimes unpredictably.
Access Cheetah Digital’s UK data on consumer trends here: https://chdig.co/3unNQFo
In today’s digital-first landscape, consumers spend time on numerous channels, expect tightened privacy whilst also demanding better personalisation. It’s a lot for any brand to juggle. Yet, to be competitive, it’s essential they strike the right balance. And that balance begins with relationship marketing, which puts the customer at the heart of the strategy. That means truly delivering on their demand for authenticity, convenience and personalised experiences from the CPG/FMCG brands they do business with.
Create a single source of truth of the customer
Without a single customer view and real-time insights, organisations struggle to deliver the quality experiences that customers are looking for today. In fact, more than half (58%) of enterprise CX leaders agree that lacking a single view of the customer and customer journey is the number one challenge for effectively measuring customer experience. At the same time, 40% of data records contain inaccurate data — an unfortunate reality that many CPG/FMCG brands struggle with. Add to that, legacy systems, data residing in disparate silos, huge martech stacks, as well as numerous sub-brands and territories with unique KPIs and it’s clear, these brands are up against a litany of problems.
That’s why gaining a single view of the customer is so crucial. A single customer view enables CPG/FMCG brands to understand and better engage with customers by knowing who they are and what they are looking for. It acts as the single source of truth about customers and provides the ability to analyse past behaviour in order to better target and personalise future customer interactions. It’s quite simply an aggregated, consistent and holistic representation of all the data known by an organisation about its customers.
When executed correctly, this looks like:
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- Unifying customer data across all internal systems, brands and territories
- Capturing each customer’s activities across all channels and devices
- Using this information to seamlessly engage with each customer across any digital channel
Turning ‘unknown customers’ into ‘knowns’
Open a kitchen or bathroom cupboard in any household, and familiar tins, packets, jars and cartons of food, drink, detergents and products from well-known and trusted CPG/FMCG brands are sure to be there. But the consumers visit supermarkets or go online to buy these items, almost never buying directly from the brand itself. And therein lies the problem: CPG/FMCG brands don’t know who their customers are. Or rather, they know who they are, but they just don’t know anything about them.
Well-crafted personas, mapping to all different consumer profiles are a starting point. But since they aren’t rooted in data, they still rely on guesswork. That means, they fall short of things like what compels the customer to buy — what are their wants, desires, preferences and the deals and discounts that have driven them to purchase? CPG/FMCG marketers can no longer look to cookie tracking, Apple’s IDFA or aggregated third-party lists. Furthermore, squandering budgets on the broadcast approach of pushing digital ads wider and further has not delivered a tangible ROI since the first ads were launched a quarter of a century ago.
As consumers are more cognisant than ever about the value of their personal and preference data, and the majority of them purchasing CPG/FMCG products from third-parties; turning them into ‘knowns’ in the database might seem like a ‘pie-in-the-sky’ utopia. However, it is entirely possible for CPG/FMCG marketers to collect marketing opt-ins, purchase intentions and preference insights that are proactively shared directly with them by the consumer. It just takes the right value exchange.
Nail the value exchange
To collect the opt-ins and preference data required to turn ‘unknown customers’ into ‘knowns’ in the database and to begin truly forging D2C (direct to consumer) relationships rather than relying on guesswork, CPG/FMCG brands need only ask. If they offer a tantalising value exchange, consumers will happily share their preference data — data points like purchase intentions and motivators, accompanying their PII data, to improve personalisation and help build a 360-degree view of who they are. In fact, according to Cheetah Digital’s 2022 Consumer Trends Index, 59% of U.K. consumers are comfortable sharing data about themselves like clothing size, age, and family make-up for better service.
CPG/FMCG brands can deliver this through interactive experiences that conduct market research, accrue opt-ins and deliver an altogether better experience with a tangible value exchange for the consumer. This can look like added value in the form of coupons, competitions, social kudos or content to name a few. Delivering experiences over interruptions is the key to collecting the permissions and preferences required to start building more meaningful relationships with consumers.
Unfortunately, however, it’s not merely a case of ‘build it and they will come’. Digitally-savvy consumers expect to be entertained, engaged and receive something in return for their attention and personal data. This class of data is called zero-party data, and it empowers CPG/FMCG brands to build direct relationships with consumers by helping them better personalise marketing efforts, services, offers and product recommendations.
Switching to a fully-fledged, zero-party data strategy means audience building never stops — it simply evolves. Of course, customer preferences and needs will change over time as they move, get married, start a family, etc. The point is CPG/FMCG brands need to constantly enrich and replace data points with both quality and quantity, Delivering this requires engaging with customers on a regular basis.
Meet and exceed customers’ new expectations
As digital consumers have evolved, the marketing they receive has not always levelled-up with them. While digital advertising budgets continue to increase year-on-year, exceeding 23.47 billion British pounds in 2021; more sophisticated targeting has not led to better experiences for consumers.
There are a myriad of reasons why digital advertising just isn’t clicking anymore, but fundamentally, the medium requires a broadcast approach and modern customers demand better. While some brands continue with the status quo of blindly squandering resources on an approach that yields a conversion rate lower than 0.1 per cent; FMCG brands like P&G are slashing ad spend altogether and turning to data-driven solutions.
Customers expect communications that show brands know more than just their name. Behaviours, attitudes and motivations have changed and will continue to do so. Any CPG/FMCG brands looking to create a truly engaging experience need to meet consumers in the right way at the right time in the right place. In the burgeoning age of D2C in CPG/FMCG, brands need to make the customer experience as seamless as possible because consumers are in charge and if they encounter friction, they will shop elsewhere.
Consumers want more – more access, more personalised content, more connected products and more customer service. A wealth of CPG/FMCG brand’s products live under the same umbrella and complement each other (eg. toothpaste, mouthwash, floss, toothbrushes), however, they’re not always fully united by the brand – and if the brand doesn’t connect them, the consumer won’t either.
A company’s job is to deliver on these consumer expectations. The only way to do that is to maintain control of the customer experience from beginning to end of the sales cycle. By forging D2C relationships, CPG/FMCG brands can meet customer demands and build personal relationships with customers – the basis of relationship marketing – that help ensure future stability and longevity in a crowded industry.
Why CPG Hill’s Pet is ‘best in show’ when it comes to relationship marketing
The CPG/FMCG industry is in a unique position right now. Since consumers use these brands daily, it’s one of the few industries that continues to see an increase in sales during the pandemic. Many of these brands have put themselves in a better position by undertaking large-scale digital transformation projects aimed at better understanding who is buying their products and more fully utilising all the data they have at their disposal.
Hill’s Pet, for example, is a CPG brand that puts the consumer at the centre of all strategy and activity, meeting their increased demand for authenticity and personalisation. The famous pet food company sells products in more than 40 countries and generates roughly £1.91 billion in revenue annually. Successfully focusing on its two primary audiences — pet parents and pet professionals — has helped Hill’s tailor its messaging and engagement strategies to build meaningful customer relationships.
“We’re obsessed with this idea of the gravity of a notion where we’re pulling customers closer to us. And in doing so, we understand the messages that really resonate with them and the mechanics and the life journeys that they’re going through. So, we’re really super obsessed with the data, but also our intellectual or emotional intelligence on what message will work the best, and what are people really wanting out of a brand? I think those are the distinct areas that we’re looking at on a day-to-day basis that make up the overall strategy,” says Keith Lehman, Global Digital Strategy Lead, Hill’s Pet (Colgate-Palmolive).
By Jamshed Mughal, Sr director Enterprise Strategy and Architect, Cheetah Digital
Download Cheetah Digital’s guide to unlocking direct-to-consumer relationships in FMCG here: https://chdig.co/3eKZ5Ul
About CM Group
CM Group offers a suite of world-class martech solutions that help marketers create and foster relationships with consumers across the entire customer lifecycle. CM Group now includes Campaign Monitor, Emma, Vuture, Liveclicker, Sailthru, Selligent and Cheetah Digital. By joining together these leading solutions, CM Group offers a variety of relationship marketing use cases that can be used by marketers at any level. Headquartered in Nashville, TN, CM Group has offices globally across the United States, Europe, Australia, New Zealand, South America and Central America, as well as in Japan.
