IT Driven Strategies for Customer Engagement

CPG companies can benefit from linking internal processes with external partners for added visibility and agility


Takeaways:

  • Customer engagement is an imperative for CPG manufacturers
  • Make sure customer engagement is part of your IT strategy
  • An IT-enabled connection in real-time can be a significant competitive advantage

Achieving visibility across the value chain, particularly information from partners such as distributors and retailers, remains elusive for most CPG companies today.

CPG companies are realizing that to achieve better process efficiencies in the area of sales operations, they need to collaborate more closely with their supply chain partners. Collaboration across the supply chain can be enabled using IT driven strategies. Emerging technologies such as cloud computing, next generation networks (NGN), mobile devices and business intelligence tools can help CPG companies in driving up the collaboration and customer engagement quotients across the value chain to achieve lasting competitive advantages.

Customer engagement

Customer engagement is an imperative for CPG manufacturers. It involves best practices for distributors and retailers—customer service, right stock at the right time, promotions management, price/margin negotiations, new initiatives and creating consumer pull at the outlets. While the company may have very strong IT-enabled internal processes, information to and from external partners is missing without an IT link between them.

The chasm between external and internal worlds can be bridged if IT strategies are put in place. Linking the two can provide visibility into areas previously disconnected. An IT-enabled connection in real-time can be a significant competitive advantage for any CPG manufacturer.

Key high impact areas

Customer engagement touches two important external contacts—distributors and retailers. Distributor management involves route to market, outlet servicing, order generation, and stock management while retail involves merchandising, in-store execution and audits.

For distributor management, most CPG companies have systems in place or distributors themselves have ERP systems. The challenge lies in that the CPG company neither has links to the distributor ERP nor has complete visibility into the distributors’ systems and operations. Ideally, real-time data is required to manage the relationship with distributors more efficiently. In retail execution, the situation is slightly different as many processes are manual and error prone.

Automating external partner processes not only contributes to improving partner IT infrastructure, but brings about control and visibility.

IT strategies

New technologies that lend themselves to this collaborative model include:

  • Internet-based cloud computing capabilities, which can be scaled at low cost, hold great potential for customers of CPG companies. If distributors are linked to the Internet and can access the cloud, they can receive and provide real-time information with little or no investment.
  • NGNs allow users to access competing service providers and networks. This helps the CPG company by enabling customers or shoppers across many geographies to access the network and support a large number of subscribers per year. By adopting NGN, companies can see significant cost savings in their customer collaboration efforts.
  • Using the Internet on mobile devices provides a real-time link between the external and internal world of CPG companies. Leveraging technologies such as cloud computing, SaaS and NGN, the mobile device can transform into the all-in-one device for CPG field teams. Mobile devices can be used to display product information, capture orders, update the shelf availability and even conduct audits and surveys. Information can then be transmitted to company servers.
  • Most CPG organizations have Business Intelligence (BI) tools, but it is questionable whether these tools extract maximum value from enterprise data. Companies struggle to meaningfully use all the data, including data that is generated from channel partners. Without a proper BI strategy, only a small proportion of customer and shopper data is analyzed to make informed business decisions. A BI strategy can help merge internal and external data to create actionable reports and insights.
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